VNL, March 2009 As the developed mobile markets all over the world approach 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: WHITE PAPER Bringing Telecom to Rural India
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VNL, March 2009
As the developed mobile markets all over the world approach
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 and
the initial focus of the VNL plan. It’s not hard to see why:
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 du-
rables market, for example, growing at 25% per year
(vs 10% nationally).
A parallel economy• – with the same needs as de-
veloped markets but a reduced ability to pay.
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 Mum-
bai. But research and experience shows that they can
and will pay around $2 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 ru-
ral teledensity has yet to break the 5% barrier (despite
television penetration levels of 26% and growing).
The reason is simple: current mobile technology
cannot reach the hundreds of millions of people ready to
embrace it.
“India, not China, will be the greatest contributor to the ‘next billion’ mobile users, adding 294m subscriptions between 2007 and 2010.”
– PYRAMID RESEARCHThe Next Billion: How Emerging Markets are Shaping the Mobile Industry Oct 2007
and suburban locations in developed markets. It’s a
general-purpose network entirely unsuited to the unique
challenges 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 back-
haul 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 conventional
Base Station site alone requires about 5000W
to run – not including any Base Station Con-
troller (BSC) or Mobile Switching Center (MSC).
Due to power availability constraints even in
urban settings, the current GSM networks in
India are estimated to burn about 2 billion litres of diesel each year. Fuel quality, transport challenges
and the demands of generator maintenance make
this power source unsustainable for rural GSM
deployments.
Skills demands• – A typical GSM Base Sta-
tion 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 profes-
sionals 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 work-
force 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
expenditure requires the kinds of population den-
sities 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 traditional
GSM create a circle that is impossible to square.
Asking traditional GSM to serve the population 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 Architecture™,
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 a low-cost and viable entry into previously •uncovered areas.
It enables low-cost expansion as uptake increases.•
All three contribute significantly to the cost, power
savings 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 keenest
to seize first mover advantage in remote communities).
THE BoTTom lInE
Unlike generic GSM, WorldGSM™ has been specifically
designed for one specialist application: connecting
previously 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 deploy. This makes it the ideal solution for seizing the massive opportunity represented by rural India and beyond.