Sustainability enablement: An opportunity for telco operators to differentiate

Amid growing environmental awareness, enterprises and telcos are increasingly prioritising sustainability initiatives, seeking ways to integrate eco-friendly practices into their operations. This article explores the role telco operators can play in supporting enterprises on their sustainability journeys, offering more innovative services as a means of differentiation.

Enterprises are increasingly prioritising sustainability, particularly within technology and IT, and operations. STL recently surveyed 201 large enterprises (500+ employees) across Europe (January 2024). The survey, titled ‘Enterprise attitudes to sustainability,’ revealed that sustainability sits at the top of enterprises’ agenda as a means of achieving competitive differentiation. This move is driven by various factors, including the desire to enhance organisational reputation and brand value, meet ambitious sustainability targets, and drive cost efficiencies through reduced energy consumption.

Source: STL Partners’ “Enterprise attitudes to sustainability” survey (n=201, Jan 2024)

As enterprises intensify their focus on enhancing organisational sustainability, telcos are faced with an opportunity to support customers with emissions reduction, with the positive side effect of new revenue growth This entails expanding the role of telcos and ICT players, expanding their focus from internal sustainability efforts (targeted at scope 1, 2 and 3 emissions) to customer focused net-zero enablement services which are products and services that play a direct role in decreasing enterprise customer greenhouse gas emissions, thereby contributing to the telco’s own scope 4 or ‘avoided’ emissions.

Four key enablement strategies

Some of the more mature telco operators have started to develop sustainability enablement services to support enterprises in reducing their carbon footprints by optimising their resource consumption. These services can be broadly categorised into four types of enablement services.

Source: STL Partners

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Enhancing basic service sustainability is a quick win for telcos

The first category is basic services. These are core telecoms services which are delivered more sustainably. Several European telcos have adopted initiatives such as transitioning from copper lines to fibre optics, which Telefonica believe to be 85% more energy-efficient. Orange’s research findings reveal that turning off the Wi-Fi in French households for 10 hours daily could yield energy savings equivalent to an entire city’s (with 40,000 inhabitants) annual energy consumption. This drive for efficiency led Orange to develop the SD-WAN One Box solution, which is 70% more energy efficient than traditional IT equipment.

Some telco services are incidentally pro-sustainability

The second category is indirect services, which involves offering existing services which have positive sustainability effects as a by-product. Deutsche Telekom’s (DT) Building Management as a Service solution is an example of indirect services. By utilising IoT sensors with intelligence and analytics, DT enables its customers to monitor energy consumption and automate fault detection. These insights contribute to reduced energy consumption, through analytics on CO2 emissions measures, and improved workspace efficiency, promoting resource optimisation and environmental sustainability.

Enterprises value carbon reporting services, yet it is a solution often overlooked by telcos

Reporting tools are critical for enterprises seeking to measure their carbon footprint associated with specific service areas across their operations. While several ICT vendors, including Microsoft, Salesforce and SAP, have entered this space, BT stands out among telecoms operators with its Carbon Network Dashboard. This innovative tool provides real-time visibility on usage heatmaps, and forecasts energy consumption of networking equipment based on telemetry data. Although reporting tools themselves may not directly contribute to emissions reduction, their role in quantifying emissions and resource consumption marks a crucial first step towards fostering sustainability within enterprises. By pinpointing emissions hotspots and optimising resource allocation, these tools empower enterprises to pursure more pro-sustainability activities.

Telcos should look to diversify their product and service portfolio to achieve longer term success

Finally, telcos can offer direct services which are new offerings designed specifically to drive sustainability benefits for customers by supporting them track carbon emissions reduction and other resource usage. While this level of enablement service is nascent and emerging in the telco landscape, Telia’s EcoDriving tool has gained considerable traction with it demonstrating the potential for service differentiation. This tool leverages fleet vehicle data to provide drivers with real-time information, facilitating reductions in fuel consumption and energy usage, thus dampening CO2 emissions and minimising fuel costs.

Telcos must navigate three key stages to realise value from enterprise net-zero ambitions

Telcos must identify existing products and services in their portfolio with significant potential for enablement effects. This strategy allows telcos to capture quick wins, enabling them to offer solutions with genuine sustainability impact without requiring substantial upfront investments. To further differentiate beyond core services, operators should establish a robust framework for measuring the carbon footprint of these offerings. This approach must align with best practices and ensure full transparency regarding their enablement effects. At a more advanced level, operators can achieve more granularity by developing customer-level reporting on products and services.

To learn more about how telcos can develop their enablement products and services, read our Red Hat sponsored report, Beyond Connectivity: Telcos’ evolution into sustainability enablement.

STL’s Telecoms Net Zero Enablement Use Case Directory, updated twice a year, tracks telco enablement offerings.

Harine Tharmarajah

Harine Tharmarajah

Harine Tharmarajah

Strategy Consultant

Harine is a Consultant at STL Partners, who joined after completing her undergraduate studies. She earned a First class honours degree in BSc Economics from University College London. Since joining STL Partners, Harine has worked with telecoms and technology companies on strategic engagements in network transformation, but also works within STL’s Edge practice.

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Sustainability enablement: An opportunity for telco operators to differentiate

This article explores the role telco operators can play in supporting enterprises on their sustainability journeys, offering more innovative services as a means of differentiation.