White Paper: Bringing Telecom to Rural India VNL, July 2008 As the developed mobile markets all over the world ap- proach saturation, the industry has begun to consider ‘the next billion’ users. These are the rural populations living beyond the reach of traditional communications networks of any kind. Rural India is a prime example of the opportunity:
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White Paper:Bringing Telecom to Rural India
VNL, July 2008
As the developed mobile markets all over the world ap-
proach saturation, the industry has begun to consider
‘the next billion’ users. These are the rural populations
living beyond the reach of traditional communications
networks of any kind.
Rural India is a prime example of the opportunity:
begun to consider ‘the next billion’ users. These are the
rural populations living beyond the reach of traditional
communications networks of any kind.
Rural India is a prime example of the opportunity:
A huge population• – 720 million people in
630,000 villages across 3.2 million square miles.
A massive economy • – over 50% of India’s total
GDP. There are almost same number of middle to
high income households in rural areas (21.16 mn)
as urban India (23.22 mn).
A booming economy• – with the consumer
durables market, for example, growing at 25% per
year (vs 10% nationally).
A parallel economy• – with the same needs as
developed markets but a reduced ability to pay for
them.
The rural consumer in India cannot pay the $50 per
month typical of London, Tokyo and Sydney. Nor can
they pay the $7-10 per month typical of Delhi and
Mumbai. But research and experience shows that they
can and will pay around $3 per month today – even
before the impact of communications increases their
ability to pay.
The challenge is to deliver a mobile service to rural users that can not only be viable, but be profitable at these low levels of Average Revenue Per User (ARPU).
Currently, the mobile phone population in India is
growing by eight million phones per month. But rural
teledensity has yet to break the 5% barrier (despite
television penetration levels of 26% and growing).
The reason is simple: current mobile technology can-
not reach the hundreds of millions of people ready to
embrace it.
THE OPPORTUNITY
“India, not China, will be the greatest contributor to the ‘next billion’ mo-bile users, adding 294m subscriptions between 2007 and 2010.”
– PYRAMID RESEARCHThe Next Billion: How Emerging Markets are Shaping the Mobile Industry Oct 2007
GSM, as we know it today, was designed for urban and
suburban locations in developed markets. It’s a general-
purpose network entirely unsuited to the unique chal-
lenges of serving rural and remote communities.
Mapping the inherent limitations of today’s GSM to the
challenges of rural deployment, we can see the massive
gulf between the opportunity and the tools available to
seize it:
Deployment demands• – The typical GSM Base
Station includes three refrigerator-sized cabinets,
mains power supply, large battery backup, dual
air conditioning units, a tower or roof site and
backhaul capability. All this is housed in some kind
of building – either existing or built for purpose.
Just getting all of this equipment to a rural
community multiplies the cost of deployment –
before provisioning, civil engineering, radio plan-
ning, testing and maintenance is factored in.
Power demands• – Power was clearly not an issue
when GSM was conceived. A typical Base Station
site alone requires about 3000W to run – not in-
cluding any Base Station Controller (BSC) or Mobile
Switching Center (MSC).
Due to power availability constraints even in ur-
ban settings, the current GSM networks in India are
estimated to burn about 1.8 billion litres of diesel each year. Fuel quality, transport challenges and
the demands of generator maintenance make this
power source unsustainable for rural GSM deploy-
ments.
Skills demands• – A typical GSM Base Station
deployment process takes around three months
from planning to commissioning, and involves
dozens of people including radio network planners,
site acquisition teams, site engineers, civil engineers,
equipment vendor installation professionals and
commissioning teams from the operator.
This supply chain can barely meet the demands
of the urban mobile infrastructure. It could never
scale for the rural opportunity even if it could do so
cost-effectively (a clear impossibility). The workforce
in rural India has none of the skills necessary to
deploy and maintain today’s GSM.
Cost demands• – A typical GSM Base Station alone
costs in the region of $100,000, before BSC and MSC
costs are factored in. Funding this capital expendi-
ture requires the kinds of population densities and
ARPU levels found only in urban areas.
Rural communities simply do not justify the cost
of today’s GSM infrastructure – and no government
subsidy can fill the gap.
Taken together, the challenges inherent to the rural op-
portunity and the limitations and demands of tradition-
al GSM create a circle that is impossible to square.
Asking traditional GSM to serve the popula-tion of rural India is like getting an elephant through the eye of a needle. We need to take another approach.
“New cellphone makers and service providers understand that they can make money by bringing cellphone service within reach of people who live on $2 a day.”
WorldGSM™ is based on VNL’s Cascaded Star Architec-
ture™, a unique approach to Radio Network Planning.
Cascaded Star Architecture™ has several important
advantages:
It allows WorldGSM™ to use panel or omni •antennas to provide coverage.
It provides an easy entry into previously •uncovered areas.
It enables low-cost expansion as uptake increases.•
All three contribute significantly to the cost, power sav-
ings and sustainability of the WorldGSM™ system.
extending existing gsm networks
While WorldGSM™ can be a complete standalone
GSM network, it comes into its own as a solution that
extends the reach of existing networks by going where
they cannot go.
In this way, WorldGSM™ creates a win-win-win scenario:
Operators win• because they can now address
massive rural markets cost-effectively and profitably.
Users win• because they get affordable communi-
cations for the first time.
Current equipment vendors win• because their
networks are extended further – and the new users
require expansions of the core network.
WorldGSM™ is specifically designed for licensed opera-
tors with existing networks – the companies with the
most to gain from the rural opportunity (and the keen-
est to seize first mover advantage in remote communities).
the bottom line
Unlike generic GSM, WorldGSM™ has been specifically
designed for one specialist application: connecting pre-
viously unconnected rural communities in a profitable,
sustainable way.
No other GSM solution costs so little, uses so little power and is so small and easy to de-ploy. This makes it the ideal solution for seiz-ing the massive opportunity represented by rural India and beyond.