Telecommunications company Ericsson and the development fund of the GSM Association, which represents the interests of GSM operators, have started a pilot project to develop biofuels to power rural India's wireless networks.

A similar pilot to the one in India is currently being run by Ericsson and GSMA in Lagos, Nigeria, with the MTN Group, a service provider with operations in Africa and the Middle East. In India, Ericsson and GSMA are partnering with a large local operator, Idea Cellular.

India has large rural areas that lack electricity connections or have an inadequate power supply, which is likely to be a bottleneck for mobile operators planning to expand their coverage to the countryside, P. Balaji, head of marketing and strategy at Ericsson India, said on Thursday.

Instead, users in rural areas in India and elsewhere in the world have to choose between using biofuel or fossil fuels to power their generators. Using biofuels is environmentally friendly as it reduces carbon-dioxide emissions by between 70% to 80%, Balaji said. Biomass for biofuel can be locally produced, providing employment in rural areas, he added.

Ericsson and GSMA are aiming to create an ecosystem consisting of mobile services operators, local farmers who will grow the crops for biofuel and local entrepreneurs who will generate the biofuel for the wireless base stations, using converter technology developed by Ericsson and the GSMA. Biofuel will currently provide only marginal savings to an operator, but the benefit is likely to increase as biofuel is more widely adopted, while the cost of fossil fuels rises, Balaji said. Using biofuel will also translate into savings on logistics and transportation of diesel, he added.

India has been adding over 6 million mobile subscribers each month, and many operators are targeting the country’s underserved rural markets as the next big revenue opportunity.

In India, Ericsson and the GSMA have identified nonedible plant-based fuels such as cotton seeds and jatropha, a plant grown in the region. In the second phase of the pilot in Pune in Maharashtra state, the two organizations and Idea Cellular are setting up a supply chain using locally grown crops to produce biofuel to power five to 10 base stations in the region. The goal is to have these base stations powered by cotton or jatropha by midyear 2007.

The IDG News Service is a Network World affiliate.