Electricity price for 4G and 5G base station. This Europe is on fire!


The energy crisis is sweeping the planet, the cost of electricity is growing before our eyes. For operators

around the world, this means a sharp increase in coststo maintain base stations, their business becomes problematic. Usually, this aspect of the work of mobile operators is not discussed in detail; at best, high-level figures occasionally flash. For example, China has 2.5 million base stations of all generations, of which, as of July 2022, 1.85 million base stations were operating in 5G. China leads the world in 5G penetration. The largest Chinese operator, China Mobile, saved 4.3 TW of energy in 2021, but prudently does not indicate the total consumption in the report. In 2020, a report by China Mobile indicated that the company had 188,000 5G base stations, and the cost of electricity was about 4 billion yuan (nearly $600 million!). Imagine the order of the numbers?

Let's take a look at the economics of a base station withtechnology point of view, how much electricity it consumes. For example, we can find the power consumption in the Huawei report, the picture clearly shows the difference between communication generations.


In the literature, I come across the statement that5G base station consumes 2 to 4 times more electricity than 4G. For us, this is not so important, unless we remember that we need at least three times as many 5G base stations per unit area, the cost of one station is 2 to 4 times higher than that for 4G. These figures illustrate well why 5G remains unprofitable for most operators: the costs are too high and the payback horizon of the technology is extended for decades. And here we are not talking about frequency auctions, and in some countries they cost operators billions.

Our task is to calculate the cost of electricity forone base station, numbers from Huawei can help us, but the manufacturer acts as an interested person and may underestimate them. Promoting 5G, Huawei overestimates the numbers for 4G stations, and for 5G, on the contrary, they underestimate the gap, it turns out not such a big gap. In fact, it is, of course, multiple. It should also be taken into account that the base station is not only infrastructure, but also lighting, alarms, air conditioners. All this also consumes electricity, although the main costs are for the radio part.

Find studies done for advancedcountries, I did not succeed, but there is an interesting work about the power consumption of base stations in Cameroon. A significant part of the costs falls on the cooling of equipment (work of 2012, rather old). On average, the base station spent 14,500 kWh per month.



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The figure looks very large, as Russianoperators have a completely different energy cost profile and are very close to the figures in Europe. I interviewed Russian companies, they indicated that 4G base stations (in fact, there are all options for frequencies and generations of communication) consume an average of 2000-3000 kWh per month. This figure can be taken as a starting point to assess the crisis that awaits telecoms in Europe and other countries where the cost of electricity has skyrocketed. For ease of calculation, we will assume that the 5G base station consumes 9000 kW per month, that is, three times more.


У каждого оператора свои договоренности с поставщиками электричества, но мы просто посмотрим на спотовые цены на электроэнергию в Германии. Они позволяют оценить тенденцию. Так, первого августа 2020 года цена МВт-час для Германии составляла 28.19 евро, через год она была 72.24 евро и в 2022 году на второе августа составила 356.94 евро. Рост стоимости за последний год — 383%. Но пиковые значения превышают 600 евро за МВт-час. Вспомним, что в одном МВт-часе содержится 1000 кВт-час, и можем считать.

4G (3000 kWh per month) 5G (9000 kWh per month)
2020 84 252
2021 year 216 648
2022 year 1068 3204
2022 winter (€600 per MWh) 1800 5400

In Russia, the cost of a kWh is 5 rubles, which givesus about 15,000 rubles of expenses for one base station per month (2021 price level for Europe). The low cost of electricity is good for Russia, but for Europe and other countries the situation looks catastrophic without any exaggeration.

How important is the cost of electricity tooperators in Europe? It becomes one of the main items of expenditure, and the larger the operator, the greater the impact. For example, Vodafone in the UK reported in July for the second quarter, the company predicts that electricity costs will increase from 200 million pounds to 300 million pounds in 2022, if there are no sharp changes in electricity prices (that is, we have an optimistic scenario for the development of the situation) . Let me remind you that Vodafone has already raised prices by an average of 9%, and this is not the last price change for 2022, it can be repeated (at the rate of inflation). The main thing is that operators are experiencing a high debt burden and will be forced to look for ways to save money.

Of course, the rapid development of 5G here turned out to becurse operators. So, in Germany, each of the major operators has about 60 thousand 5G base stations, now they are turning into a trap. And it is quite possible that if the cost of electricity goes beyond 500-600 euros per MWh, then we will see 5G shutdowns at night, the rejection of such base stations, including those already installed. So it was in China a couple of years ago in some provinces.

Plans for the development of networks in doubt, ordersoperators for infrastructure and 5G have declined sharply, manufacturers of such equipment will face a full-blown crisis in 2023. I am sure that they will exude confidence and say that the development cycle of the largest operators has simply ended, which is why the demand for 5G is declining. But in reality, everything will depend on the economy, it will go down the drain. At the current cost of electricity in Europe, no operator can maintain 5G networks in the same volume and continue to develop them. The price is too high, and a 10-15% increase in service prices does not correct the imbalance.

None of the operators could take this option into accountcrisis a year ago. Contracts for the supply of infrastructure are long, but they allow reducing the volume of purchases within a year. Therefore, we will not see changes until the summer of 2023, but by this time the development of networks in Europe will slow down as much as possible. The fact that Huawei is preparing for a severe crisis is no secret, the reason is not the sanctions, but the calculations above. The cost of communication for operators is becoming cosmic, they cannot afford to maintain such large networks. The change in the price of supporting a 4G station from 84 euros to 1068 euros in one year and further growth clearly demonstrate the prospects that await European operators. Add here the cost of equipment, its growth, as well as inflation, and the need to pay people more. The picture is bleak, the time for cheap electricity is over, and now we need to come up with new economic models for business.

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