Beyond the Bottom Line - Growth Consulting - Frost & Sullivan

eal impact on the environment. Recent work by Stanford University, the Uptime Institute, and AMD suggests that
data centers contribute CO2 emissions in the same range as the airline industry, steel manufacturing, and ship building.
This work also suggests that the cumulative impact of data centers contributes more CO2 to the atmosphere than
does the country of Argentina or the Netherlands. Similarly, operating its network is the single largest source of
power consumption for a typical telecom service provider. Therefore, eco-sustainability absolutely has a place in the
telecommunications industry.
Frost & Sullivan has been covering eco-sustainability in the telecommunications industry since 2006. In that time, our
work has uncovered a strong, but largely hidden trend of telecommunications service providers creating and following
eco-sustainability strategies. Telecom companies tend to pursue eco-sustainability in three ways.
Compliance to regulations or other mandated criteria.
Eco-sustainability is pursued through adherence to defined limits and processes, which attempt to control
consumption of non-renewable resources and curb the amount of pollution that needs to be absorbed by the
ecosystem. This is the most basic level of eco-sustainability strategy. Examples of regulations that directly impact
telecom service providers include California’s 2006 Greenhouse Gas Bill and the mandate in China’s National Eleventh
Five-Year Plan to lower power consumption by 20 percent per GDP unit. Telecom service providers can also set their
own limits, such as BT’s goal to reduce CO2 emissions 80 percent from 1996 levels by 2016. Thus a compliance
strategy engenders eco-sustainability by discouraging or slowing the impacts of unsustainable business practices.
Commitment to sustainability through eco-efficiency.
Here, eco-sustainability is pursued by using more resource efficient technologies to lower environmental impacts. This
approach is often built on compliance actions, but adds a layer of pro-activity directed at lowering costs (saving on
OPEX). Eco-sustainability is achieved through eco-efficiency, and collateral benefits are accrued, such as lower CO2
emissions and recycling end-of-life network equipment. Higher CAPEX costs for renewable energy powered
infrastructure are more than offset by the bottom line savings through the use of “free” energy. Under a commitment
eco-sustainability strategy, Verizon has shown a savings in CO2 emissions with a trend of lower annual Carbon
Intensity readings, defined as a ratio of metric tons of CO2 emitted per $1 million in revenue. As well, TELUS has
demonstrated that from 2004 through 2007, its eco-efficiency -- the ratio of energy consumed to top-line revenues --
has steadily improved. This is an important check on telecommunications eco-sustainability strategies because it
shows that following such a strategy does not negatively impact overall revenue generation. Thus, a commitment
strategy brings about sustainability discouraging unsustainable business practices and translates sustainable ones into
bottom line savings.
Command of eco-sustainability to drive top-line revenues.
A command strategy goes one step further than commitment because it uses eco-sustainability to drive new business
and revenue streams. Building on compliance and commitment actions, telecom operators create new services that
meet their own customers’ needs for sustainability solutions. Telecom Italia, in partnership with the Roman city
government, has developed a service using cell phones that enables drivers to find the most direct route to available
parking. This reduces gasoline costs for drivers, CO2 emissions in Rome, and can be a revenue generating service for