WTL White Paper Shows How to Profitably Connect Rural Areas

World Telecom Labs, a Belgium-based company which has long been a leader in the provision of VoIP switches, Pre-Paid applications, and signalling gateways for emerging carriers and telecom service operators, in a white paper made available to Nigeria CommunicationsWeek revealed what it called “A simple business case for deploying rural mobile coverage”.

WTL noted that, while mobile penetration continues to grow in Sub-Saharan Africa and other emerging economic regions, the full potential to enable widespread coverage has yet to be realised.

According to leading industry group the GSMA, in 2013, mobile penetration reached a mere 31% of the population of the Sub-Saharan African (SSA) region1. Clearly, there is potential for huge and unprecedented growth.

WTL said that the economic benefits of mobile and internet connectivity are well known.

“Mobile connectivity makes a significant and growing contribution to GDP. Put simply, the more mobile connections there are, the greater the economic and social benefit.

“In the same report, the GSMA forecasts that the contribution of the mobile economy will contribute to around 8 percent of total GDP in SSA by 2020, rising from a figure of 6 percent in 2013. Despite this impact, there are concerns that coverage will fail to reach many populations in rural areas, with the result that they will be unlikely to realise the benefits of even the most basic services.

“Indeed, the GSMA has suggested that co-ordinated government intervention is necessary in order to ensure that its forecasts are met. Although it has predicted that 80 percent of the population of sub-Saharan Africa’s population will have access to a mobile device by 2020, the GSMA says this is unlikely to happen without a shift in government policies”.

According to the white paper, this applies both to device availability and to the allocation of sufficient spectrum to accommodate connectivity. Even if the forecasts are realistic, there will remain a significant proportion of the population that will be beyond the reach of both conventional networks and devices.

However, there are other approaches that can help drive this transformation and extend connectivity, with or without co-ordinated governmental action.

Hence the paper proposes a simple model that provides a clear opportunity for private and entrepreneurial investment that will both yield profitable returns and bring the social and economic benefits of connectivity to those that are currently disconnected.

WTL said that the Rural Opportunity For many good reasons, investments in mobile network coverage are typically made in urban areas

“It’s easier to deliver coverage and population density means more people can be included within range of a typical cellular network deployment. Extending the same solutions to remote rural areas has traditionally been costly and uneconomic.

“The marginal cost of connecting additional users beyond a certain percentage of coverage can rise dramatically. Alan Law, from the Small Cell Forum, uses research data to show that the cost of connecting additional users can rise significantly once 90 percent population coverage is reached.

“The business case for using traditional means to deliver mobile coverage to the most remote areas doesn’t exist. This means that many in rural areas will continue to be beyond the reach of mobile networks - and, despite the anticipated further investment in mobile coverage, many are likely to remain so”.

Yet, such populations represent significant untapped economic potential. The transformative benefits of mobile connectivity have been known for years, but it’s important to recognise that people do not expect these to be available for free.

Even though ARPU may be low, customers expect to pay for mobile services, which, in turn, means they can be willing to become customers - provided a connectivity solution can be delivered.

This creates an opportunity to capitalise on latent demand, if it can be done so at the right price point, profitably and with the right solution.

WTL identified what is needed is a means to deliver localised connectivity in rural areas that can be connected via cost-effective backhaul to core networks.

“Conventional mobile coverage does not cater for these situations and there is often little economic incentive for a licensed operator to extend coverage. However, with the right approach, a robust business case for such a localised solution can be created that will both generate returns for the provider as well as economic development for the users.

Delivering Rural Coverage
There are two key innovations that enable a positive business case and hence profitable business to be realised.

“First, the rise of small cells, originally seen as solutions to enable more efficient urban coverage, has created a cost effective and powerful range of solutions that can equally be applied to rural areas at a lower price point than traditional macro cellular radio access points. Second, the link between the local coverage area and the transit network is known as the backhaul. If this relies on fixed or physical infrastructure, it may be prohibitively expensive.

Alternative solutions, such as Line of Sight (LoS) coverage may not be possible
However, recent developments in satellite connectivity render this both an affordable as well as efficient means of providing long-range backhaul to interconnect with other networks. The unique combination of both small cell micro cellular radio access solutions and a means to cost-effectively implement IP backhaul via satellite links allows providers to reduce costs and create a positive business case for connecting remote rural regions that are beyond the reach of traditional solutions.

Vivada
According to the experts at WTL, the combination of small cells with satellite backhaul enables a localised network to be created that delivers connectivity and coverage within the context of a village.

This micro cellular approach can be connected via IP backhaul to a transit network for access to external networks.

It is a partnership between a rural connectivity provider, that is responsible for the installation and delivery of the network, and a locally-based entrepreneur who retails the available services to users in the locality.

World Telecom Labs (or WTL), a specialist provider of IP signalling and routing solutions has created a complete package that enables the turnkey delivery of voice and data connectivity solutions within the rural environment.

Crucially, it provides a simple template that can easily be replicated, allowing multiple villages to be connected.

Vivada includes the following key components: • Small cell radio access • Satellite modem • Billing and OSS • Optimised satellite routing solutions from WTL • SBC and SS7 over IP platforms from WTL, among other solutions contained in the white paper.