Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this post, Sanjay Bhatia, Vice-President Solutions Marketing at GENBAND, counts the costs of the PSTN in the US and explores the benefits of going all-IP.

Here in the U.S., one of the most under-the-radar stories throughout the communications industry is the unsustainable power costs behind the Public Switched Telephone Network (PSTN), one of our oldest public utilities.

Utilizing older, inefficient networks forces telecom providers into cost- and energy-inefficient scenarios. However new advances in technology now make it possible to deploy efficient technology that pays for itself through energy and other savings.

Counting the costs of PSTN

In the U.S., the large majority of businesses and many residences still rely on the traditional PSTN service, despite the significant associated on power and environmental costs.

The PSTN has outlived its estimated 25-year lifespan and the communications industry’s ongoing use of this antiquated technology is having an outsized effect in terms of energy consumption, as evidenced by the numbers.

The worldwide electricity consumption of information and communications networks has been estimated to exceed 350 billion kWh – the same capacity as 30 power plants – amassing a global annual power bill of $63 billion, equivalent to the GDP of Luxembourg.

Emissions from telecommunications networks also continue to grow, amassing 22 percent of the total ICT footprint back in 2011. Furthermore, the ICT industry’s emissions are expected to grow to 2.3 percent of all global greenhouse gas emissions, equivalent to 1.27 billion metric tons of carbon dioxide, by 2020.

Bundle all this wastage up and telecom facilities require more energy per square foot than all other commercial buildings, producing masses of carbon dioxide and wasting billions of gallons worth of water every year.

Further exacerbating the problem is the explosion in mobile and smartphone adoption, forcing providers to find and equip new datacentre real estate just to keep pace with the demand – in the US alone it will require 90 million square feet of space by 2017. It’s no surprise that datacentre power usage is increasing dramatically, to the extent that for every pound spent powering datacentres another pound is now spent cooling them.

All the signs point clearly in one direction: it’s time to overhaul older networks and move to the next-generation infrastructures that deliver better services and massive cost and energy efficiencies, ultimately paying for themselves.

The Network Transformation Solution

A complete shutdown of the PSTN is not an option as it remains heavily relied upon by businesses, rural communities and emergency responders. The most viable, scalable option available is to migrate the PSTN to a highly consolidated, all-Internet Protocol (IP)-based infrastructure.

The PSTN itself is powered by hundreds of thousands of Central Offices, real estate that would be largely rendered unnecessary with new IP-based technologies – indeed, in the US alone this approach would free more than 300 million square feet.

An all IP-based network significantly reduces the amount of network equipment required, which in turn helps lower the operating expenditure needed to power the network.

However, modernisation on this scale requires significant upfront expenditure, and service providers face a quandary over investing in new advanced services or investing to preserve the services already in place. The tipping point is that the PSTN is outdated and increasingly unsustainable, while the investment in IP pays for itself in benefits and savings.

All-IP Benefits

Migrating Central Offices to an all-IP approach has been proven to eliminate approximately 70 percent of energy costs. In the US alone this would see a reduction of 8.4 billion kWh – equivalent to burning 3.4 million tons of coal – and $1.3 billion in power saving. The benefits on a global scale would be enormous.

In addition to these power savings, an all-IP approach will see real estate reduced by up to 75 percent and reduce the amount of water required for cooling by around 70 percent. It will also reduce CO2 emissions by an estimated 40 percent.

From a user perspective, all-IP based networks provide feature-rich voice and video services, which is great news as consumers increasingly abandon older technologies in favour of high-speed internet services that rely on modern IP-enabled broadband networks. As this consumer demand skyrockets, the need for businesses to upgrade their public switched telephone lines to next-generation networks becomes imperative.

The culmination of all these benefits points to the fact that the move to all-IP actually pays for itself. A 50 percent reduction in communications energy use alone would save the industry more than $31 billion a year, where it currently spends $63 billion in power usage.

There is clearly a huge opportunity for the telecoms industry to make a change and do their part to aid the environment, while ensuring their businesses are more sustainable. After all, every one Watt of telco equipment power saved results in 2.42 Watts of saving in total power consumption.

How the Switch to IP has Worked in Practice

Major service providers that have integrated this IP approach to their networks are already enjoying wholesale energy and financial savings.

For example, VTR Chile, the main player in Chile’s residential telecoms market with 2.8 million customers, moved its legacy infrastructure of 11 switches featuring different technologies, which had been in place since 1997, to one switch. It has seen dramatic improvements on real estate, air conditioning, power and, most importantly, quality of service.

Regulators are already clamouring for this technology to be more widely adopted by businesses. In the US,  the Federal Communications Commission (FCC) has made IP transformation one of its key priorities and its chairman Tom Wheeler is spearheading network trials to expedite the transition of legacy networks to IP.

The FCC, policy influencers, government and environmental agencies around the world are forming a large consortium that is focused on phasing out the PSTN and supporting new approaches to network modernisation, and the communications industry has to catch up.

Time to Make the All-IP Switch

While the PSTN will remain with us for now due to the volume of people depending on it for vital everyday services, there is a huge onus on the communications industry to embrace new technology. The costs building up against this aging infrastructure mean businesses must look to the new internet-based features and functionality that are emerging daily.

Operators and consumers alike now recognise the time for a new network has arrived and it’s time for both businesses and service providers to realise their traditional ways are no longer acceptable. Phase-out trials of PSTN are already ongoing around the world, ushering in a sunset for the traditional communications infrastructure.

The overwhelming benefits of adopting an all-IP approach make it a no-brainer decision. It’s the communications equivalent of trading in your old banger of a car for cash and driving off the lot with a sparkling new Lamborghini. The network upgrade is paid for on the back of reduced energy and other costs, taking the risk and capital requirements out of network transformation while delivering businesses a cleaner, greener, more effective infrastructure.

While each region has a different history and telecommunications infrastructure with different plans to achieve sustainability targets and goals, there’s no doubt that globally all are moving – at their own pace – towards highly consolidated all IP networks. In addition to helping to harmonize service and feature availability for consumers, this will also are a positive environmental effect all of us can benefit from. Let’s not wait too long before moving forward.

Serving as Vice President of Solutions Marketing and Strategy for GENBAND, Sanjay Bhatia oversees the company’s product marketing organization and alignmnent of GENBAND’s go-to-market strategy across different market segments including NFV, Cloud, Enterprise Unified Communications, MSO and Wireless.  Bhatia is an accomplished telecommunications professional with over 28 years of wide-ranging global experience. Bhatia has held a variety of senior leadership roles in Product Marketing, Product Line Management, and Research & Development for leading technology companies. He possesses a strong track record of successfully introducing new technologies via innovative product and solutions launches.  Bhatia is an accomplished speaker who has presented at several global events.