India's telecom networks are now facing a diesel crisis
What's the story
The Indian telecom industry is facing major disruptions due to unreliable grid power, diesel shortages, and rising fuel costs. The issues have been flagged by telecom operators and tower firms in a recent meeting with the Department of Telecommunications (DoT). Persistent load shedding and weak grid reliability are forcing telecom infrastructure providers to rely heavily on diesel-powered backup systems.
Supply chain issues
Restrictions on diesel supplies in several states
Restrictions on diesel supplies in states like Uttar Pradesh, Odisha, Bihar, Andhra Pradesh, and Telangana are affecting fuel availability for mobile towers and data centers. The issues primarily relate to restrictions on the overall quantity of diesel being supplied and denial of diesel supply in open/drum form, which is impacting telecom operations," industry representatives said during the discussion.
Cost implications
Energy costs account for nearly 10-12% of mobile revenue
The rising diesel prices amid disruptions due to the West Asia conflict are further straining the telecom sector. According to IIFL Capital, energy costs account for nearly 10-12% of mobile revenue for telecom operators. Digital Infrastructure Providers Association (DIPA) estimates that the telecom tower industry consumes about 100 crore liters of diesel annually as backup power. The recent hike in diesel prices is expected to add ₹750 crore annually to operational costs for infrastructure providers alone.
Energy impact
Supply chain disruptions for telecom equipment
Manoj Kumar Singh, the Director General of DIPA, emphasized the massive energy burden on the telecom sector. He said tower sites consume around 5,000 crore units of electricity annually, translating to an operational expenditure of about ₹40,000 crore per year. This figure could go up if diesel continues to be used as a substitute for grid power. The industry also flagged supply-chain disruptions for telecom equipment and components such as semiconductors and fiber optics.
Government action
Urgent intervention needed on fuel supply and power issues
The peak summer power demand has increased the risk of outages, worsening concerns for telecom infrastructure providers. The industry has urged the government to ensure 24x7 grid power availability to reduce reliance on diesel generators. Tower companies are expected to send another communication to the DoT, seeking urgent intervention on both fuel supply and power issues.