Eco-Sustainable Innovation
Drives Profitable Business Growth

By O. Baujard

Environmental concerns are not a new focus for Alcatel-Lucent. Our heritage in ecological innovation can be traced back to the invention of photovoltaic technology developed by Bell Labs more than 50 years ago. This allowed the industry to convert light into electricity and enhanced energy management for communications networks. This early example of our work on eco-sustainable innovation illustrates a mindset and corporate culture that continues to drive our thinking and technology development initiatives to this day.

Eco-sustainability is gaining an increasing amount of attention, and as we contemplate many of the choices once accepted as self-evident truths, we realize they perhaps need to be reconsidered.

• You can't offer high levels of service if you want to hold down costs.
• You can't operate an open network if you want to protect data integrity and privacy.
• You can't run an ecologically sustainable business without sacrificing profits.

All of these statements are now considered myths by a growing number of innovative and financially successful organizations.

Operators Are Well-positioned to Enable Eco-sustainable Profits

Environmental consciousness is, in fact, one of the new rules that a growing segment of consumers and businesses are asking the industry to play by.

As we see it, true eco-sustainability has nothing to do with adopting superficial changes to look good while continuing to do business as usual. Nor does it mean making changes that undercut business viability.

We believe that eco-sustainability can be achieved cost-effectively, and it can also drive growth and profitability. As a growing number of enterprises build eco-sustainability into their purchasing criteria, service providers offering eco-sustainable products and services can differentiate themselves from the competition, leading to increased market share and revenue growth. They can increasingly make the case, for instance, that reducing carbon emissions is directly associated with improving energy efficiency, which ultimately helps the environment while lowering operating costs - and contributes to the bottom line.

There is also growing evidence that an eco-sustainability strategy can offer top line benefits. One of the most dramatic examples of an organization that is achieving substantial revenue gains as a result of a well-developed eco-sustainability strategy is United States-based General Electric Corporation. The company stated in its 2007 Annual Report that it now expects to achieve $25 billion USD (€16 billion) in eco-related sales by 2010 (a $5 billion USD [€3.2 billion] increase from their previous target). This is a result of its well-recognized "ecomagination" program.

At Alcatel-Lucent, we believe that operators are well-positioned to be seen in similar eco-sustainable terms by both consumers and businesses. There are growing opportunities for service providers to maximize revenue opportunities by positioning new communications services - such as unified communications and virtual collaboration - as a way to help end users reduce their environmental impact.

In fact, in our industry, and in particular through Alcatel-Lucent innovation, we have already made significant strides in this area. One of the most impactful is the migration from classical circuit-switched networks to IP networks and the inherent energy efficiency improvements (exceeding 90% energy reduction in power per unit of bandwidth).

Intertwining Challenges

A new study from the American Council for an Energy-Efficient Economy (ACEEE) found that implementation of a whole array of new technologies leads to a dramatic increase in energy efficiency and is actually a net saver of energy by a 10:1 ratio across the economy. Researchers found a direct correlation between gains in energy productivity and investments in information and communications technology (ICT).

The ACEEE found that, today, it takes less than half the energy to produce a dollar of economic output than it did in 1970, and that energy-efficiency gains have increased significantly since 1996.

One prime example of the alignment of eco-sustainability with business objectives can be found in how data centers today are being managed to reduce costs and improve carbon emission efficiencies. There is a general consensus that technology-related power consumption improvements can reduce CO2 emissions significantly. A growing body of evidence suggests that spending on data center power to cool hardware accounts for a large and growing portion of IT infrastructure investments.

At Alcatel-Lucent, we are tackling this challenge and have recently unveiled our world-class data center in Marcoussis, France. The facility is equipped with our latest generation equipment (such as OmniSwitch) and features an innovative cooling system that can deliver 30% reductions in equipment power consumption and produces 20% savings in air conditioning.

Similar concerns need to be addressed in locating, planning, building and maintaining mobile base stations and other telecommunications facilities.

Broadband and Eco-sustainability

While the demands from technology-based operations can be great, there is another side to this story. According to recent work performed jointly by the World Wildlife Fund (WWF) and the European Telecommunications Network Operators Association (ETNO), CO₂ reductions can be garnered by using current and emerging telecom services (Figure 1). For example, increased adoption of audio conferences as a travel replacement can save 2,646,000 tonnes of CO₂. Furthermore, existing flexi-work initiatives - programs that allow employees to work from home or avoid peak rush hour commuting - has been calculated to save more than 57 million tonnes of CO₂ with 50 million flexi-workers.

These outcomes also contribute to improved productivity and operational efficiency, especially as a growing percentage of the workforce becomes more mobile and new ways of working, such as flexi-work, are increasing.



Alcatel-Lucent is continuously developing the key technologies to enable this new way to communicate. For example, as a result of Alcatel-Lucent's leadership in developing broadband access technologies (ADSL, VDSL, 3G/EVD0) as well as virtual contact center solutions for fixed and mobile communications, we are enabling flexi-working and rich multimedia communications (such as video conferencing) as an efficient and effective alternative to "being there."

Alcatel-Lucent Recommends a Proactive Approach

Regardless of the many elements that enter into the picture, one thing is clear. It is best to incorporate eco-sustainability considerations - such as power consumption, the use of alternative forms of energy and other environmental concerns - as an integral part of the overall planning and design process, rather than retrofit "eco initiatives" after the fact. Changes made later in the process, though certainly still worthwhile and important, have less impact.

The business of eco-sustainability requires more than good ideas and new projects. It demands a new mind-set, a new discipline and a different way of planning. Eco-sustainability should inform key decisions in the initial design of business processes, products and services, covering the entire range of business functions and customer solutions.

This means that, when developing new devices, networks, applications and services, we need to ask ourselves:

• Are we designing solutions that require less energy to function?
• Can they use or promote the use of renewable or alternative energy?
• Are we using nontoxic materials that have a low impact on the environment?
• Will our solutions last so they can be replaced less frequently, reducing the impact of producing replacements?
• What is the afterlife? Can our products be recycled or reused?
• And, more globally, do we enable and facilitate new ways of life and work, which are less energy-intensive?

The good news is that, if you have made investments in Alcatel-Lucent solutions, you have already taken important steps toward profitable eco-sustainability.



We believe that eco-sustainable gains are inevitable outcomes of innovative initiatives that enhance the quality and performance of key technologies. Alcatel-Lucent is defined by innovation and recently signed the United Nations Global Compact "Caring for Climate" initiative to further strengthen our commitment to increase energy-efficiency and reduce the carbon footprint of our activities. We are also listed in the Dow Jones Sustainability World Index, placing us among the top 10% of the leading sustainable companies out of the largest 2,500 companies in the world. We have further been awarded the prestigious 2008 SAM Silver Sustainability Recognition in acknowledgement of our long-standing commitment regarding sustainable development. As a leader in this important area, we look forward to working with our customers to develop solutions that will help them meet both their business and eco-sustainability objectives.

Here are a few examples of eco-sustainable solutions we have provided for our customers. Alcatel-Lucent is:

• Reducing broadband equipment power consumption - State-of-the-art advancements have yielded significant power consumption reductions (23%¹) in our most recent Very High Speed Digital Subscriber Line (VDSL) products.
• Cutting wireless base station energy consumption - To conserve energy in Global System for Mobile communications (GSM), Worldwide Interoperability for Microwave Access (WiMAX) and Code Division Multiple Access (CDMA) systems, we increased our level of hardware integration to reduce the power consumption of the radio modules for given radio coverage and traffic handling performances. We also introduced both passive-cooling capabilities at low ambient temperatures and fresh air fan cooling without air conditioning in high ambient temperature environments. These cooling technologies enable organizations to avoid traditional air conditioning systems that often consume even more power than the actual telecom equipment uses to provide core services. Finally, we are developing software features that enable service providers to adapt the power consumption to the actual traffic on the network. (These innovations are being used to support our broadband terrestrial infrastructures as well as our wireless networks.)

All of these improvements are particularly compelling when you consider that power consumption can contribute up to 35% of a radio site's total costs when the power supply equipment and the power bill are jointly calculated. T-Mobile, a leading mobile service provider in Germany, completed a total GSM network renovation with Alcatel-Lucent's equipment that yielded energy savings of up to 40% compared to previous equipment. The company used its OPEX savings to help finance its network evolution in a fiercely competitive market.

• Reducing the number of network radio cell sites - Another way to conserve power in wireless networks is to maximize coverage per cell through more efficient network designs. "Beamforming" technology in our WiMAX solution has led to a 40% decrease in the number of base station sites required to cover a given area. As a result, the overall network power consumption is significantly reduced. Alcatel-Lucent's Twin TRX transceivers dramatically expand the network coverage of each GSM site, enabling service providers to reduce the number of network cells and resulting power needs required to offer service by between 30% and 50% depending on the network configuration.

• Offering eco-sustainable energy alternatives - Beginning in 2008, Alcatel-Lucent celebrates the deployment of its 200th solar-powered GSM base station. This milestone is being reached as we expand a network in Senegal, where 40 new solar-powered base station sites are being deployed this year. Self-contained energy solutions such as solar (photovoltaic) panels allow new radio sites to be established affordably in regions that are not connected to public electricity grids.

This is just a sampling of solutions that can help operators - and by extension end users - reduce energy consumption and minimize impact on the environment.

Conclusion

We find ourselves today at an interesting point in history. After a century and one-half in which economic development and technological progress has been seen by many as coming at the expense of environmental protection, Alcatel-Lucent believes that today the opposite is true. The best-run service providers and enterprises of the foreseeable future will not only be more responsive to market forces and operationally efficient, they will be major beneficiaries of eco-sustainable profitability.

That is why it is so important that we, as an industry, work to integrate the role of eco-sustainability into our infrastructure development and go-to-market initiatives.

The challenges we face remain complex when it comes to fulfilling the promise of eco-sustainable profitability. But at Alcatel-Lucent it is clear that there are hard and tangible business benefits to be gained by embracing eco-sustainable imperatives. It will thus continue to be an increasingly important dimension of the business strategy and an integral component of conversations we have with the industry in general and our clients in particular. Eco-sustainability will continue to be a major factor fueling Alcatel-Lucent's innovation engine as we explore new ideas and opportunities to address environmental concerns while solving business problems.

Olivier Baujard
Chief Technology Officer, Alcatel-Lucent

To contact the author or request additional information, please send an e-mail to enrich.editor@alcatel-lucent.com.

Associated Items

Article: Alcatel-Lucent wins green bragging rights in switch test

Article: Anywhere, Anytime, Immersive Communications

Article: Eco-Sustainability Initiatives Yield Business Benefits for Service Providers

Presentation: Alcatel-Lucent Caring for the Environment Media and Analyst Tutorial

Press Release: Alcatel-Lucent has been awarded the SAM Silver Class Sustainability Distinction

Press Release: Alcatel-Lucent installs its 200th solar-powered radio site

Press Release: Alcatel-Lucent issues its 2007 Corporate Social Responsibility Report

Press Release: Alcatel-Lucent signs the United Nations Global Compact "Caring for Climate" initiative

Web Page: Caring about the Environment through Eco-Innovation