Wireless 2008: Hip to be green

Femtocells. LTE. WiMAX. There’s no shortage of hot wireless topics to keep people talking this year. Decoupled from technologies and standards, however, is another trend that started brewing last year and has quickly captured its own share of attention: environmentally friendly network solutions and practices.

What it means to be “green” is as varied as the shades of the color itself: lime green, pea-green, chartreuse, celeste (a personal favorite). From recycling soda cans in the lunchroom to comprehensive green policies and business practices, most companies likely can attach themselves to the green movement in some way. To this end, when talking about telecom companies “being green,” it’s useful to frame the discussion along two lines: corporate practices and product offerings.

Any company — vendors and operators — can apply green corporate practices to varying degrees, including:

• Investment in energy-efficient equipment such as servers and computers.
• Conservation by reducing paper usage and outfitting buildings to be energy-efficient.
• Recycling ink cartridges, paper, plastic and more.
• Responsible disposal of computers, IT equipment, cell phones, etc.
• Increased use of telecommuting and teleconferencing to reduce travel.
• Purchasing renewable energy credits (vouchers used to purchase energy produced via renewable sources).

Do these practices affect competitiveness? Not much. Most are just another form of social responsibility, such as community involvement and philanthropy, which all companies are expected to practice on some level.

While obviously promoting environmental sustainability, it is unlikely that implementing green corporate practices will result in an ongoing competitive advantage for any company, beyond some accretion of goodwill.

Green corporate practices might be undertaken for altruistic purposes. Making product offerings more environmentally conscious, however, can have a meaningful impact on a company’s competitive position. To date, most of the green product initiatives heralded by telecom equipment vendors and service providers fall into three broad categories:

• Reducing power consumption, heat generation and/or equipment footprint, which can lower energy costs in network kit and user devices.
• Using renewable materials to manufacture products and recycled materials for packaging.
• Conforming to government regulations and recommendations by renewable energy advocacy groups.

To be fair, equipment vendors and wireless operators have been concerned with power consumption, heat generation and equipment footprint for years — not because of the environment, but because of the impact on total cost of ownership. Likewise, conformance to environmental regulations is basically a prerequisite to market participation. It did not take Al Gore winning the Nobel Peace Prize to raise awareness about the value of standards compliance. But if many of these activities have been ongoing for some time, why are they suddenly being touted as green initiatives?

The short answer: Being green now holds strategic value to competitors. Case in point, if the optimization of operating expenditures through reduced power consumption and a smaller equipment footprint has always helped vendors sell more gear, then enabling the same benefits while offering customers the opportunity to demonstrate their commitment to the environment should be even more valuable in today’s marketplace. Likewise, if compliance with emerging standards gives vendors an advantage in demonstrating product development prowess, marketing the concept as green becomes a relatively logical exercise that will appeal to environmentally conscious customers. Being green is a way to add new starch to a familiar shirt.

The green movement is enjoying unprecedented momentum. No companies can afford to ignore it in how they operate and in the products they make.

Peter Jarich is principal analyst for wireless infrastructure for Current Analysis. Jason Marchek is principal analyst for optical infrastructure for Current Analysis.