In a shift towards treating telecom infrastructure under industrial electricity tariffs instead of commercial rates, state authorities have directed officials to examine extending lower power tariffs to the sector, according to discussions held at a recent State Broadband Committee (SBC) meeting.
The direction emerged from a meeting convened in Uttar Pradesh earlier this month, chaired by Chief Secretary S.P. Goyal, where issues related to telecom costs and infrastructure deployment were reviewed, as per official documents seen by Fe.
The move comes against the backdrop of rising energy costs for deploying telecom infrastructure, with industry estimates suggesting that electricity accounts for nearly 30–35% of operating expenses for assets such as towers. A typical mobile tower consumes between 8 kW and 15 kW of power, making tariffs a key determinant of network expansion economics.
Rationalising Energy Costs
At present, telecom infrastructure is largely billed under commercial electricity categories. For instance, in Uttar Pradesh, commercial tariffs for non-domestic consumers range from ₹7.50 per unit up to 1,000 kWh and ₹8.75 beyond that, along with fixed charges of ₹450 per kW per month. In contrast, industrial tariffs for small and medium power consumers are lower at around ₹7.30 per unit with fixed charges of ₹290 per kW per month, creating a cost differential that industry has long flagged.
While the discussions took place for Uttar Pradesh, the issue of power tariff rationalisation for telecom infrastructure has been under consideration across multiple states, with the Department of Telecommunications (DoT) officials trying to create a model for duplication. Officials told that the proposal remains under examination for other states where they shall weigh revenue implications alongside the need to support digital expansion.
In parallel, the government has pushed for composite billing systems for telecom infrastructure across all DISCOMs which seeks to simplify payments across electricity distribution companies. This move is also gaining traction beyond a single state, with several regions exploring similar frameworks to improve ease of doing business.
Despite the state government’s coordination with DoT, structural bottlenecks remain in the sector including delays in optical fibre approvals, high charges imposed by local authorities, and procedural hurdles in securing permissions.
Separately, industry bodies such as the Digital Infrastructure Providers Association (DIPA) have been engaging with both state and central governments on these issues and are understood to be preparing broader representations at the national level, including to the Prime Minister’s Office, seeking uniform policy treatment for telecom infrastructure to enable faster and more cost-effective network deployment.
Digital Fast-Track
The committee also set a a timeline for 3 months for the rollout of smart meters for all mobile towers and instead of conventional meters.
Meanwhile, states have been asked to ramp up the transition to the Centre’s National Right of Way (RoW) portal, replacing the state-level system to standardise approvals and reduce processing timelines. Additional application and licence fees for tower installations are also set to be removed, while an acknowledgement-based mechanism for installations on private property is being enabled to speed up deployments.