Posted by: Arjan Tupan | 18 November 2010

Improving energy efficiency to reduce costs (and emissions)

A powerful way of showing how CSR can help your business, is to show examples of what other companies are doing. In a new series, we present short case studies of how Baltic companies have improved their operations through CSR. The kick-off is an energy use reduction project done by BITE, the mobile telephony operator active in Lithuania and Latvia.

What did BITE do?
The project was a complete overhaul of the mobile network. Base stations, switches, transmitters, everything was replaced by new technology from Chinese manufacturer (and global market leader for this type of equipment) Huawei. Before taking this decision, scenario’s for network upgrading were calculated. Using the new Huawei technology, which was smaller, did not need air conditioning and had fewer use of cables, was not only the most efficient solution, but also meant improving the network capabilities.

How does that work exactly?
The technology that was in use was designed in a different way. Because of that design, energy was lost through heat generation, much in the same way as the electricity network. Base stations, at the foot of transmission towers, would send a signal to a transmitter in the top of that tower. Much of the energy used in this process was to get the signal from the bottom to the top, losing energy underway. The equipment has the base station next to the transmitter. On top of that, the new equipment is much smaller. Together, this makes for a much more efficient use of energy. The installation of the new technology not only brought BITE a faster mobile network, but it also provided a 33% reduction in energy use for operating the network – based on measurements on typical sites.

Why do it?
The main driver for this project was value creation. Or, simply put, improving network coverage, speed and quality against a lower cost of ownership. To be competitive in both the Lithuanian and the Latvian mobile telephony market, you need to have attractive pricing for the service. You can only achieve that if you can keep your costs as low as possible. By upgrading the network, BITE has reduced the cost base, which leads to lower prices for the customer. On top of that, the quality of calls was improved for the customers as well. This enabled BITE to experience strong growth in the Latvian market. As an example for that: in August more than 70% of people that changed their mobile telephony provider, became client of BITE.

What about the environmental impact?
Obviously, using less energy also means less emissions and a smaller impact on the environment. BITE sees that as an additional benefit. Transparency about motives is very important. The reason to upgrade the network was cost reduction to better serve the customer with attractive pricing. Of course, BITE is happy that this also leads to less impact on the environment.

What did BITE learn from this?
Interestingly, market research showed that in Latvia ‘green’ companies are perceived as having expensive products. That was another reason BITE did not want to stress the environmental benefits of the project and it strengthened the believe that transparency on motives is key. A ‘green’ claim for this project would have impacted the confidence customers have in BITE in a negative way, because in fact it was a cost reduction initiative.
Another lesson learned is that small things can really make a difference. Sure, this project in itself was a huge operation.But at the same time BITE did some other things as well. More meetings with video-conferencing, for example. This greatly reduced travel costs, and again has an additional benefit of having less impact on the environment. Something that also made a difference, was the 2009 company christmas party. In stead of organizing it off-site, the party took place in the office. With a DJ, good music, good food and drinks, but less costs. The saved costs were then distributed to charities, chosen by a selected group of BITE employees. It was a success in every sense: the party was good, employees were happy and BITE managed to help some charities doing good for society. Furthermore, BITE is trying to convince customers to opt for the e-bill, the electronic version of the monthly invoice. Using the e-bill also represents both a cost reduction and an reduction of the environmental impact.
In Lithuania BITE is now also piloting the use of wind turbines to power the communication towers. Although projected benefits look promising, it is not easy to run such projects in Latvia as well. There are a lot of administrative hurdles to take, and the collaboration with local partners is not progressing as quickly as BITE expected. But we’ll probably see more of that in the near future.


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