Bringing Communications to the Rural Edge
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This document summarizes a presentation on bringing low-cost telecommunications solutions to remote communities. It discusses the challenges of connecting the billions of rural inhabitants in developing countries, including lack of power infrastructure and high costs of satellite backhaul and site construction. It then presents a new solution using low-capital and low-operating cost base stations powered by solar energy, with optimized local traffic to reduce satellite backhaul costs by 50%. Key features that lower costs include on-demand power control, power monitoring and adaptation, and traffic-dependent power control. The solution aims to connect the most remote populations in a self-sustaining way.
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Bringing Communications to the Rural Edge
- 1. GBI Tech Series Bringing Telecommunications to the Rural Edge November 17, 2011
- 2. www.GBIportal.net 2
- 3. Low-energy, Low-cost Wireless Communications for Remote Communities November 2011
- 4. Identification of the Remote Communities Market and its Size • It is estimated that there are over 5 Billion mobile subscribers in the world today. • Further more it is estimated that there are more subscribers in the developing world than there are in the developed world. • It is estimated that the number of subscribers will exceed 6 Billion by 2014. For this to happen operators will have to deploy services in more remote and sparsely populated areas and face the following challenges • Lack of grid based power • Lack of Copper, Microwave or Fiber backhaul • Current business cases do not apply.
- 5. Identification of the Remote Communities Market and its Size • The GSM Association estimates that 75,000 new off grid mobile communications sites will be built per year in developing countries to address this growth. • The World Bank estimates that 3 out of every four people in the developing world live in rural areas. That’s 2.1 Billion people. • Therefore operators are going to have to find innovative and cost effective ways to connect these billions of rural inhabitants. “Extending those networks to poor rural areas proves to be difficult for operators in terms of business rationale and cost justification” Al Hammond and Loretta Michael HMS Wireless, Innovations, published by MIT Press.
- 6. Remote Communities The Key Challenges • A combination of competition between the equipment vendors, government subsidies and initiatives such as the GSMA’s ultra low cost handsets have combined to drive down the network and handset cost for service providers but site, backhaul and power costs remain high. • Non of the above initiatives address the operational costs that operators face when deploying sites in remote communities. “Leading vendors have struggled to provide operators with a solution, which addresses the required ROI. As a result, it is estimated that almost 1,000,000 remote communities remain outside the world's telecommunications network” Ericsson
- 7. Remote Communities Satellite Backhaul • While the price of network equipment and terminals has fallen steadily since the introduction of GSM networks 1991, the transmission costs have not tracked these same deflationary trends. • It is now estimated that anything from 15% to 80% of the total cost of ownership of a BTS relates to transmission costs. • It is also estimated that a large proportion of this transmission cost is as a result of traffic that is local. i.e. traffic that is between subscribers on the same BTS or adjacent BTS’. • Industry estimates for this local traffic is as high as 70% to 80%.
- 8. Remote Communities Satellite Backhaul $16,000 Ku-band $14,000 C-band DVB-RCS $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 Source: www.comsys.co.uk $0 90 91 92 93 94 95 96 97 98 99 00 01 02 VSAT Terminal Pricing Trends
- 9. Remote Communities Power • The other major OPEX challenge for remote sites is power. • Almost all remote sites are off grid and therefore connections if available are prohibitively expensive ($100K). • Alternative power solutions are the only option. These fall into the following categories: • Diesel Generators • Solar Power • Wind Turbines • Hybrid Solutions • A regular GSM base station requires anywhere between 600 and 1800 Watts of power.
- 10. Remote Communities Power • Generators are not a viable option due to: • The logistics and cost of refueling the generators • Potential theft of the generator • Theft of the Diesel fuel • Solar Power is the best solution but can prove expensive due to the cost of the batteries if the Base Station power requirements are not optimized. • The cost of Solar panels is continuing to fall. • However the largest cost of a solar installation is the battery backup required for night time or days where there is no or little sun.
- 11. Remote Communities The Site • The CAPEX cost for the site is also a key consideration • Standard Base Stations towers can be cost prohibitive in remote communities due to the construction costs. • All of the tower materials have to be transported to the remote site. • Tall towers require large amounts of concrete for the foundations. • In many remote areas concrete becomes solid during transportation due to the humidity. • Out door base stations are a necessity as shelters are not required. • The site must be secure to stop the theft of any equipment. But this is less likely with solar power and outdoor base stations.
- 12. OPEX barriers for operators in remote communities
- 13. Remote Communities Solution Low capital cost & low operating cost solution 80% less 70% local calls = lower cost satellite backhaul & superior voice quality Wireless + Internet Reliable off-grid solar power Up to 50% lower operating cost
- 14. Remote Communities Solution Traditional model New solution large tower structure, air-con, Small, rapidly deployable, passively cooled, expensive, diesel powered low-cost, solar powered
- 15. Key Features of a remote communities solution Operating Expense Capital Cost • On-demand Power Control • Local Connectivity • Leverage “sleep mode” for VSAT • Keep payload local to site and/or • Lower power requirements clusters of sites • Average backhaul bandwidth reduced • Power Monitoring & Adaptation 50%, with improved call quality • Unique monitoring of power supply • Allows optimal dimensioning of solar • Backhaul Optimisation systems • Low rate Codec, Optimised IP • 50% savings over SCPC • Traffic Dependent Power Control • Intelligent power amplifier • Data Optimization management • Condensed Core Network Elements at • Lower power consumption the Edge, e.g. SGSN/GGSN • Enables implementation of standard • Smaller lower-cost VSAT and innovative IP Optimisation • Required for lower bandwidth
- 16. Tier 1 MNO Monthly Remote Community Revenue Summary* $12,000 Monthly Voice Revenue Monthly SMS Revenue $10,000 $8,000 Average Monthly Voice Revenue per Site: USD$ 2,642 Average Monthly SMS Revenue per Site: USD$ 812 $6,000 $4,000 $2,000 $- * Actual monthly revenue data from Tier 1 MNO Remote Community deployments
- 17. Thank you For further information please contact: Ian Walter e: iwalter@altobridge.com t: +1 408 904 0327 www.altobridge.com
- 18. The broad applicability of LCLP Telecoms Solutions Eric White INTEGRA LLC 17 November 2011
- 19. The Three Tools of Telecoms Access TA For different locations – ranked from most to least accessible 1. Legal/Regulatory/Competitiveness Consulting i. Lowers operational and capital costs to competitive firms while ensuring competition benefits consumer prices. 2. Universal Service Funds (USFs) i. Smart Subsidies of Capital Costs (CAPEX) for projects/infrastructure that will be self-sustaining (Revenues>OPEX) 3. Low-Cost/Low-Power Base Station Technology i. To reach the poorest and most remote populations (where OPEX would be > Revenues with standard infrastructure) ii. Can be deployed in conjunction with USFs. LCLP solutions connect the most remote locations!! 19
- 20. The Benefits of Connectivity Economic Development Growth Connectivity Better Social Service Betterment Delivery
- 21. The Economic Benefits of Connectivity Controlling for all else, access to voice and broadband is associated with big increase in GDP (10% to 1%)
- 22. How ICT causes economic growth in rural areas Income = f(productivity, human capital, investment) • Lowers search costs and transaction costs, making labor more productive. • Increases the rate of social learning (better workers = increased human capital) • Reduces risk (increasing investment)
- 23. How ICT increases rural productivity Lowers Lowers Search Costs Transaction Costs 1. Voice, the killer app 1. Secure monetary 2. Market information transactions systems
- 24. How ICT improves rural human capital Increases Social Learning Farm Extension Services • Disease Identification (Grameen AppLab “Community Knowledge Worker” Program) • Google SMS: Farmer’s Friend
- 25. How telecoms access increases investment in rural areas Reduces Risk • Forward Contracts • Input Verification • Warehouse receipts • M-Insurance These are just a few of the HUNDREDS of mobile products that improve economic growth in rural areas
- 26. Telecoms Solutions for Health • Health Systems Strengthening • Outbreak reporting • Behavior Change Communication • Telemedicine
- 27. Telecoms Solutions for Education • LCLP Base Stations can connect schools • Teacher attendance monitoring • Teacher payments • Educational games • Literacy improvement Photo credit: Project ABC
- 28. USAID contracting vehicles ready for this work Global Broadband and Innovations (GBI) • Has a mandate to work with telecoms operators and LCLP vendors to facilitate deployment of these technologies. • Offers a valuable online resource, www.GBIportal.net that features articles about mobile interventions in health, education, and 6 other sectors that can be useful guides in crafting your programs. • Can offer tailored consulting to Missions and Bureaus on mobile for development programs.
- 29. Points of Contact Joe Duncan GBI Program Manager, USAID jduncan@usaid.gov Eric White Managing Associate, INTEGRA LLC ewhite@integrallc.com
Editor's Notes
- In the last two presentations you’ve been introduced to a class of technologies that we refer to as “Low Cost/Low Power” (or “LCLP”) base station technologies and shown how they are currently being used in a USAID governance project in the Congo. I want to take just a few moments of your time to talk about the broader applicability of these types of technologies, and give some examples of the kinds of things they can help you do in your projects.
- LCLP solutions are really all about connectivity, and they are the most effective tool in our arsenal for reaching the furthest, most difficult to reach locations. We at GBI also do regulatory consulting, which can included work with universal service funds. Regulatory consulting lowers the costs of doing business and makes it profitable for private sector operators to move into areas they otherwise wouldn’t. Beyond these areas, there are places where the local population could pay enough for service to cover operating costs, but the capital requirements prevent private operators from investing. This is where Universal service funds are used – they are state-managed “smart subsidies” that help worthwhile projects get off the ground and become sustainable. Beyond those areas, there are places where the populations are too sparse, or simply cannot afford to pay enough for telecoms service for it to be profitable, on the margin, for companies to go there. These are places where the revenues earned wouldn't’t even cover the operating cost of putting in a base station. Here, in these most rural areas, LCLP solutions make telecoms access possible. They lower the total amount of revenue a company must earn to pay for their operations, getting it down to about $3 per person per month. This is within the price range of the poor, the $1/day poor.
- So asking how LCLP deployments can help your project is really like asking how connectivity can help your project. Connectivity does two things, both of which result in “Development,” however you want to define it.
- A 2009 World Bank report found that, when we hold all other things constant, a 10% increase is ICT penetration is associated with on average a 1% increase in GDP growth.
- So – how does ICT improve incomes on the micro level?We generally agree that income is a some function of (i.e. results from) productivity, human capital, and investment. The presence of ICT infrastructure improves all three. Since we are talking about the most rural users of ICT, and since the economies they face are 95-99% based in agriculture, I’ll use agriculture as an example of how these processes work.
- Search costs are simply the costs assocaited with finding information needed to effectively run your business. This can include anything from price information, to locating buyers, to intelligence on competitors. You can do all of this over the phone, reducing the need to travel to obtain information.There are also apps and software services tailored specifically for this. Esoko is a market information system that originated in Ghana and has spread to other parts of Africa. It offers three types of services. At the most basic level, it offers crop price alerts via SMS. Farmers use it to negotiate better crop prices and to sell in different markets. E-Choupl is a service of ITC in India. It started in 2000 and provides transparant price information to farmers, as well as education. It works on a kiosk system. ITC installs an internet terminal in villages and trains an operator/manager there. ITC offers to buy farmers commodities if the villager cannot sell it at an appropriate price to the local marketplace (for which it offers a price quote). They also offer the ability to grade a document the quality of produce at the kiosk location.Telecoms access also allows rural people to use mobile money products. This can ensure that they are paid for their goods on time, in a safe way, and without traveling. Conducting the transaction of selling their goods becomes less expensive.
- Mobile Extension Services are filling in a market gap that was left when a lot of marketing boards, etc were privatized. In many countries the government is either out of the extension business, or no longer has the resources to do it widely enough. And without the ability to privately appropriate gains the private secotor has not filled in the gap. ICT holds the potential to change this.Again, voice alone can be a good thing too. But on top of voice…Grameen’s App Lab program employees “CKWs” in rural Uganda and equips them with a smartphone. The CKW will visit villages and answer questions that local farmers may have. Though this can be about weather, price information, etc. the questions they receive are mostly about crop diseases and how to cure them. The CKW provides this extremely valuable information to farmers, and in return the farmers fill out a survey. The survey is simple, name, age, schooling, location (GPS), crops grown, land size, etc. Grameen aggregates this information into regional HH surveys and sells it, using the profits to pay the CKWs, who earn about $2 a day.Google SMS farmers friend is a different model. It doesn’t require a smartphone or an intermediary. It’s completely text based but provides the same information.
- KilimoSalama is an insurance system in Kenya that allows farmers to insure their inputs against drought or excessive rain (which may wash it away). The Africa Commodity exchange allows small farmers to engage in forward contracts and issues receipts to them, over mobile phone??, that can be sold.There are emerging schemes that do input verification – i.e. you can be sure that the product your agrodealer sells you is top quality and not an inferior substitute by texting a serial number from the back to a given number and checking it against a database operated by the company that made it.All of these make farmers more likely to use improved inputs, and to risk more money on improving the productivity of their land.So, connectivity allows farmers, the economic actors of rural areas, to improve their operations in a number of ways, resulting in economic growth and development. Connectivity can also be used to improve the delivery of social services, improving people’s quality of life. There are a number of sectors in which this can be done, but I will touch just briefly on health and education.
- The health space has been buzzing with mobile solutions for years now, and you have probably heard of many. This is because they can do a lot of things. I’ve listed a few here. Mobile medic is an example of a suite of services that tackles most of these using mobile phones. It develops new and extends existing open source platforms for numerous health related needs, such as community health worker coordination and management, community mobilization for vaccination and satellite clinics, logistics and supply chain management, referrals, routine data collection, and mapping of health services.But local solutions are also starting to be developed. MedAfrica is a recently launched, locally developed information platform in Kenya that features doctor and hospital listings, drug authenticators, and symptom checking for self-diagnosis (useful when there are only 14 doctors for every 100,000 people).And USAID is involved heavily in this space. MAMA, the mobile alliance for Maternal Action is a USAID program designed to use cell phones to encourage healthy behaviors among expectant and new mothers, and is part of the health grand challenge for development.
- In education, telecoms connectivity can also provide a slew of benefits.-To hit these points one by one – remote schools can be connected to the internet via a piece of hardware that hangs off a LCLP tower and beams connectivity to a receiver in the school, from which wires can be run and computers can access the internet-There was a very famous study done in India where a school was connected, and a teacher was given a phone with a camera, and required to submit a photo of her with her students every day in order to be paid for that day. Teacher attendance increased dramatically. This is now being done in Ugnada by SNV in a project called CU@School, as well as by -In Rwanda, teachers in rural schools are being paid using mobile transfers. Ensuring they are paid on time increases their attendance and work rates-Games such as a phone version of “Snakes and Ladders,” designed and deployed in India, help with child numeracy ability-Project ABC, in Niger, used text messaging as part of a program of adult literacy training in Niger. It complemented face to face instruction, but those that used text messaging afterwards had much better retention of their new knowledge of reading.