OCTOBER 2016

Last Mile Connectivity In Emerging Markets

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Last Mile Connectivity in Emerging Markets

3 Foreword: Last Mile Connectivity in Emerging Markets James Barton - Editor, Developing Telecoms

5 Sponsors: Operator Partner: MTN Nigeria Silver Sponsor: Koonsys Article Sponsor: Omoco

6 Interview: Emerging Markets Will Take a Fresh Approach to Last Mile Connectivity Ian Keene - Vice President, Research, Networking & Communications Equipment, Gartner Research

11 Intelligent Planning for Optimisation of Last Mile Connectivity Krisztian Novak - Co-founder & Strategic Business Development Director, Koonsys Radiocommunications

15 Interview: Tackling Last Mile Connectivity from an African Perspective Thecla Mbongue - Senior Telecoms Analyst, Middle East & Africa, Ovum

17 Last Mile Rural Connectivity - Moving Beyond Traditional Network Infrastructure Tim Guest - Communications & Business Writer

21 Fibre - the Ultimate Last Mile, Now Showing Explosive Growth Stefan Stanislawski - Co-Founder, Ventura Team

25 Interview: Connecting Africa: Last Mile from an Operator’s Perspective Tolulope Williams - Senior Manager, Access, Transmission, Planning & Optimisation, MTN Nigeria

www.developingtelecoms.com | October 2016

02 Foreword

James Barton, Editor, Developing Telecoms

The term ‘last mile’ has long been used to describe the #nal hurdle of delivering telecommunications services to end users, and the challenges of delivering connectivity from core network to #nal destination are so well-known that the term has come to refer to an entire raft of solutions aimed at doing exactly that.

Practically speaking, network structures make it virtually impossible to deliver the bandwidth available at a landing site intact to a consumer’s home, often due to obsolete technologies or an unworkable number of links. Last Mile seeks to overcome this bottleneck, delivering connectivity without compromise to areas that su!er from a dearth of bandwidth.

These solutions are increasingly having a huge impact in James Barton - Developing Telecoms emerging markets, where they can be used to connect remote rural communities with a business case that makes sense for the operator. In addition, as tra"c – and particularly data usage – soars in densely populated cities, solutions for increasing bandwidth availability are in high demand. A further appeal for last mile connectivity in emerging markets is the fact that developing countries are typically unencumbered by outdated legacy architecture – although this of course brings its own challenges in terms of building out infrastructure in a cost e!ective way.

www.developingtelecoms.com | October 2016

03 This report focuses on the di"culties faced by operators In addition, I was privileged enough to interview Tolulope in emerging markets looking to deliver data bandwidth Williams of pan-African operator group MTN to discuss cost e!ectively to challenging locations, including remote the #rm’s approach to connectivity challenges across the communities and busy cities. While the challenges are continent; I would like to extend my thanks to him along myriad, improvements in technology are increasingly with all of the contributors to this Special Report. making the business case viable and allowing operators to At Developing Telecoms, we aim to provide the greatest extend their reach to areas that just a few years ago would degree of insight into the technologies that have the have been logistically and #nancially unfeasible to connect. greatest impact in emerging markets, and our series of We have enlisted the help of several experts in this #eld to Special Reports are a key pillar of this mission. They are discuss the most appropriate and e"cient technologies made possible by our sponsors, and I would like to extend for the various use cases of last mile connectivity, and it is my personal thanks to the sponsors of this report, Koonsys my pleasure to be able to o!er our readers the insight of and Omoco, both of which have contributed insightful major analyst #rms Gartner, Ovum and Ventura Next AB. articles to the report.

www.developingtelecoms.com | October 2016

04 Sponsors

We are grateful to the following sponsors for supporting this Special Report.

Koonsys Koonsys is a premium supplier of Radio and Transmission network optimisation and planning services. Koonsys currently supplies Mobile Network Operators across Europe and is expanding globally.

For more information, visit www.koonsys.hu

Omoco Headquartered in India, Omoco, a global mobile network provider, draws a rich pool of world-class engineering talent and best brains in the world. The team, by the sheer advantage of its lineage powered by Vihaan Networks Ltd. (VNL), has a successful track record in creating innovative wireless solutions. Omoco also translates its expertise to provide agile & stand-alone private mobile networks in rural communities, remote islands, enterprises and the latest IoT (M2M applications) to enable our users become a part of the wireless communication revolution.

For more information, visit www.omoco.in

www.developingtelecoms.com | October 2016

05 Emerging Markets will take a fresh approach to Last Mile

Ian Keene, Vice President of Research, Gartner

DT Editor James Barton spoke to Gartner’s Ian Keene to assess the use cases for Last Mile in emerging markets as compared to developed markets, and how cost implications could stymie development.

The need for last mile connectivity applies to various use cases. What are the predominant ones?

There are three main use cases for last mile connectivity. The most obvious is connecting rural and remote regions, but easing the load on densely populated urban areas is an increasing concern. Finally there are the shoulder areas that fall between these two extremes.

In each of these use cases, di!erent technologies may be more appropriate.

Ian Keene - Gartner Rural & Remote Regions

Which technologies dominate in these areas?

In markets that are very underdeveloped such as in Africa, the standard method for last mile connectivity is wireless – 2G or 3G technology – because it gets the coverage, and in these regions coverage is more important than capacity. However, that means that applications have to be very low- bandwidth – this is a limit, but not always a problem.

In India for example, we’ve seen that people are adept at getting the most out of very low bandwidth. Plus we’re starting to see things improve – faster technologies from 2G to 3G to 4G, which will begin to provide more capacity as well as just coverage. Obviously coverage is an issue; in rural environments, service rural communities will be the focus rather than covering the entire area, otherwise things will prove too expensive.

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06 How will development progress in comparison to reducing OPEX, and the connection becomes more reliable. developed markets? The shorter the length of copper/COAX at the end there, the higher the bandwidth that can be provided. Of course, in a Developing countries will begin to go the way of developed lot of developing countries people steal copper cable, which countries, where now operators are looking to extend is a problem, so getting rid of as much copper as possible is coverage to small communities and villages rather than positive. It’s a long time before #bre is going to reach into the for example extending 4G coverage over the entire rural communities in many countries, but it’s getting there. country, which is incredibly expensive and o!ers no real business case. In the developing world, the business case is Then of course there’s satellite, which is increasing in paramount – it’s pointless to have a vast amount of capi al bandwidth and – sort of – coming down in price. I was expenditure is there’s going to be no return on investment – recently with NBN, the National Broadband Network in so I think it will happen the same way. Australia, which is one of the few neutral networks in the world. The government has essentially ordered them to While wireless will be signi#cant, we’ve also seen cases supply broadband to all households, which is no mean feat where Wi-Fi has become important; if there’s a #xed given the large number of extremely remote communities in line coming into the community then people can share Australia. The only answer there is satellite, as anything else connectivity through Wi-Fi. The bene#t of this technology is ridiculously costly – in practical terms, it’s the only way of is that it’s in practically all devices that people use, allowing connecting these communities. it to remain low-cost in comparison to cellular, where the price rises incrementally between 2G, 3G and 4G. Wi-Fi can Satellite will therefore always play a part; it’s more expensive also be used on old devices such as older PCs, which is a and doesn’t always provide the performance of a #xed line, signi#cant factor in emerging markets. but it’s often the only way of providing communications to remote environments. Lower income people such as farmers The ubiquity of Wi-Fi makes it a good way of connecting in emerging markets aren’t going to be able to a!ord a communities in tandem with #xed-line backhaul. On that satellite connection; the best they’d likely be able to a!ord side, we’re seeing a similar situation in developing markets is a 2G phone. Putting cellular out in such a remote area isn’t to the one that unfolded in more developed markets, which going to make business sense though, so it has to be funded is that the distance between #bre optic cable and end user is some other way. getting shorter. Fibre is going out to more of the network – it’s not reaching the end user of their remote community by In conclusion, very low cost cellphones and Wi-Fi devices any means, but it is getting closer. In terms of maintenance are going to be crucial for connecting people; satellite costs, if one can run a #bre cable – assuming the right arrays plays a part at connecting communities but in developing for the copper infrastructure are present – a lot of the more countries personal satellite devices will be too una!ordable localised central o"ce-type locations can be disposed of, for working classes.

www.developingtelecoms.com | October 2016

07 High-population Urban Areas The technology’s there – it’s the organisation that’s needed. Looking at a country like China for example; despite its Which technologies are being used to ease the network load caused by urban densification? big cities, it has a lot of people in rural communities. As the government essentially dictates how roll-outs should It depends how much government support there is – it’s happen, costs can be kept down. In other markets, where hard to have a #ve year ROI in upgrading all this, so if a operators are opposing each other, it can be chaos and government steps in with an incentive then that de#nitely nothing happens – organisation has a lot to do with it, it’s helps. Getting the cost of putting a new network into place not necessarily the economic strength of the country or its is crucial – organising rights of way, deploying cables in the location. If projects can be organised and everyone believes ground; these are a huge percentage of the CAPEX cost. broadband access will be great for the community then it’ll Where these costs are low is where we see communications work; if everyone wants to #ght their corner and make as growing in terms of bandwidth and availability of service. much money as they can then it’s always a failure. For example, putting #bre past a premise in an urban In China, all the major operators are state-owned; what about environment – the Chinese Ministry of Communications in a more competitive market such as India? can get the cost of this down to well below US$200 per premise, which is pretty incredible, particular compared to India has ridiculous competition; there’s so much an FttH project in Australia which budgeted AUS$3000 per competition nothing happens, it’s anti-competition in a way! premise. In Russia, people just put wires up wherever they It’s had the opposite of the intended e!ect, as no-one does like and don’t have to worry too much about permissions – anything. They can address this issue with consolidation; the those are about $230 or so. In the US, they’re trying to get regulators have shot themselves in the foot by limiting the the cost down to $1500, and that’s in a scenario where the amount of spectrum they were willing to license for mobile city is allowing them to use their power, not implementing use. They cut it into such little slices for everyone that – planning restrictions etc, so there’s a huge variety of costs while it was OK for voice networks – it’s absolutely useless in getting #bre closer to the premises. For example, putting for data. Operators are therefore unwilling to invest – how #bre in a block of apartments and then using the internal are they supposed to get new services to people when they cabling would provide much higher bandwidth services, but haven’t got the raw ingredients to work with because it’s too it means everyone has to play ball. In some environments it widely divided among a lot of competitors? In that sense, works but in some people just oppose each other, nothing India’s a great example of what not to do, while China’s a happens, money disappears and the project fails. great example of what to do.

www.developingtelecoms.com | October 2016

08 Not every market in the world can bring their operators under in order to deliver these services, rather than building out government control – how can China’s example be emulated in new infrastructure at massive expense. So they utilised a free market? the current infrastructure and improved the bandwidth Where it also works is when the city or regional government that people receive, regardless of whether they’re in an gets together with the interested parties – i.e. service extremely remote rural area or right in the middle of a city centre. Being pragmatic about technology and leveraging providers and stakeholders – and builds public-private what’s there generally makes sense, although of course partnerships. This is more common in developed countries, there are some environments where it really doesn’t, and such as Tier-2 or Tier-3 cities in the US – it’s organised on a has to be replaced. local basis, resulting in a win-win situation. It doesn’t have to be on a national basis. Government regulators need to In conclusion, we need to see operators being pragmatic set rules in place that enable the growth of communications and making use of the assets, while regulators need to avoid without being too authoritarian about it; competition isn’t being too dominant. necessarily the best way of moving forward, a monopoly situation can be better if everyone sees the bene#ts. If ‘Shoulder’ Areas it’s a state-run monopoly, then those bene#ts are better How can we de!ne ‘shoulder’ areas and what are the best communications and therefore a better economy in the approaches for connecting them? area that the communications are provided. Having the People usually look at this in terms of population density; you interested parties work together is key, but so is having have dense cities, sparsely populated rural areas, and then projects that themselves work. suburban ‘in-between’ areas. However, this can be the wrong It’s also important to be technology-agnostic; we’ve seen approach – it can be better to look at ‘pay-packet density’. some chronic failures where the government has decided Where do people have money to pay for these services – or on what the tech will be, and one technology does not #t all alternatively, where are businesses located? These areas can situations – it’s a path for disaster. China has decreed that all become a focus after cities – the number one priority – have been developed. A lot of countries are now cottoning on to new constructions must use #bre, which is #ne as they have a demand-based model, which prioritises vocal communities a lot of new construction going on, but they don’t stipulate calling for improved services over quieter areas that aren’t this for older premises. If they said that every premise had requesting them. This harks back to the idea of domineering to have #bre, this would multiply broadband projects by regulators – government departments often won’t take this around a factor of #ve over time; however it would be hard idea into account at all, they’ll have their own programme to see the successes of this as it would be spread out in time. whereby certain areas get services #rst purely because it’s In Australia, the government pledged #bre to the premises part of the plan. They have to look at how local economies for around 90% of the population and promptly took could bene#t and take demand into account, rather than a step back when people pointed out that there were having bureaucrats planning the project without going out perfectly good networks in place that could be enhanced and talking to the communities.

www.developingtelecoms.com | October 2016

09 BIO A lot more money is being ploughed into broadband access Ian Keene, Vice President of Research, Gartner year-on-year as people see that there’s a need for higher bandwidth connectivity. There’s a strong commercial Ian Keene is a Vice President of research at Gartner. He element to this, as businesses will be attracted to locate in analyses and advises on the broadband access market areas with good connectivity. The digital divide between globally. high density urban areas and rural areas is getting bigger in developing countries – it’s certainly an issue in developed countries. Costs are a bigger issue in developing markets so this is likely to continue – the ROI in urban areas is always better, so citizens in rural areas could be left further behind. Rural communities might have download speeds of 2Mbps, while it can be 1Gb-2Gb connectivity for city centres, so the gap between users across these areas is becoming much wide – some applications can’t even be used in rural areas as the connectivity isn’t good enough. Bringing the economic bene#ts of good communications to rural areas is an issue faced by many emerging markets right now. Left to a commercial environment, people in the cities will be the ones who receive service while rural areas will develop at a much slower pace.

How can operators be incentivised to connect rural areas?

It’s a tough one; the accountants would just say the ROI isn’t good enough. This is where regulators need to step in and tell operators that they’re required to serve rural communities; they can change rules slightly or o!er incentives e.g. public- private ownership schemes. Left to purely commercial ways, rural is increasingly going to be left behind.

www.developingtelecoms.com | October 2016

10 Intelligent Planning for Optimisation of Last Mile Connectivity

Krisztian Novak, Co-Founder & Stretegic Business Development Director, Koonsys

In this article the writer examines how the backhaul sector used for last mile connectivity has grown piecemeal, often without proper strategic planning, as radio access networks have expanded. As 5G and IoT drive data demand to new heights it will become essential for MNOs in emerging markets to look for new ways to optimise these parts of their networks to maintain quality of service and control costs.

For the overwhelming majority of end users in emerging markets last mile connectivity is delivered over the backhaul element of a radio access network (RAN). The integrity of this connection has a major bearing on quality of service, but despite this many backhaul networks are operating Krisztian Novak - Koonsys sub-optimally for long periods, often resulting in signi#cant increased costs as well as underperformance for Mobile Network Operators (MNOs).

There are a number of reasons why this situation has arisen. Over the last 20 years there has been a constant $ow of RAN technology changes. This has led to the need to upgrade and expand the Transmission Network (TRM), sometimes without a clear business case. With the mass adoption of data services - primarily via the rise of smart phones - the demand on the TRM has increased exponentially. This has made the TRM the key enabler of quality service – and therefore pro#ts for MNOs.

Moreover, far from remaining level, the pressure on TRMs is only set to increase even more rapidly as 5G and the concept of the Internet of Things are becoming a reality. This will lead to ever more complex multi-technology networks, with an ever greater amount of bandwidth required. This is a major challenge to existing TRMs which will need to expand to support all RAN technologies from 2G to 5G and beyond.

www.developingtelecoms.com | October 2016

11 Development of new technologies for wired and wireless Traditional network planning tools, in line with current transmission is a must, and all major manufacturers are engineering practices, focus on technical solutions and lack investing in R&D to meet this challenge. However, the any #nancial aspect. This leads to a limited solution, which majority of the R&D e!ort is aimed towards hardware needs to change. A shift is required to an “optimization solutions which could add further complexity to the focused” design methodology, integrating a full scale network. Transmission network planners need to develop analytical approach in the network design phase. strategic plans to meet the current demand and the future The iNOP solution developed by Koonsys provides a solution challenges that 5G and IoT will bring. to these challenges for both Green#eld network projects Backhaul network improvements providing last mile and large scale network expansions. iNOP, standing for connectivity were tailored to RAN needs, typically as a next Intelligent Network Optimization, provides answers for the step to roll-out. As backhaul was not the blocking point for most demanding dilemmas of network build, operation and end user quality in 2G networks, MNOs initially put more expansion including: emphasis on RAN optimization with little or no consideration r How to plan and build a future-proof transmission network of the TRM. This has led to TRM networks being far from with the lowest TCO but maximized capacity; optimal, with room for major quality improvements and, more exciting, signi#cant cost savings. r How to minimize TCO of RAN and transmission networks;

r How to make savings on OPEX while improving the Balancing the Technical and Financial Needs of MNOs capacity of TRMs; The challenges facing operators in last mile network r How to support marketing planning under time constraints; planning are both technical and #nancial, but ultimately the challenges come down to how to balance the ever r What-if analysis to support technical strategy planning increasing demand for data and subsequent pressure on the r Scenario analysis for budget planning to #nd the optimal transmission network with the ever-reducing ARPUs. solution

The best solution would be to build an unlimited capacity r Regular analysis of savings potential in the network #bre optic transmission network. However, the reality is that this is a dream for the vast majority of network operators r How to manage TCO through operation to reach the in emerging markets so more sensible solutions utilizing highest levels of e"ciency existing infrastructure investments need to be adopted. iNOP utilizes mathematical algorithms, to e"ciently manage A cost e!ective approach is a hybrid deployment of #bre complex networks and analyze a huge number of network optic and wireless backhaul technology, leveraging existing variants. This enables MNOs to e!ectively manage and investments where possible. However, existing engineering operate their networks. iNOP acts as the central brain of practices have failed to come up with suitable solutions once network development during the networks lifecycle. With the level of network complexity is reached. In general they iNOP, MNOs are able to maintain their network at an optimal address isolated problems, with technical solutions. This level at all times, the network is always up-to-date, network creates a paradox, engineers are working to #nd the best operation costs remain low, and there’s no need for ad-hoc technical solutions, while management are looking for the network optimization which demands unpredictable and best value with a quick ROI. irrational investments.

www.developingtelecoms.com | October 2016

12 Understand Your Real TCO - and Prepare to be Shocked With savings of this level there are multiple factors involved which can typically include any or all of the following: The Total Cost of Ownership (TCO) of a TRM network is made up of multiple CAPEX and OPEX components. Some of these r Unnecessary microwave links - these average between 15- components are directly linked to the number of network 20 % in any network; elements, others indirectly, and some are quasi-taxes (e.g. r Optimized topology frequency licence fees). MNOs are able to in$uence some of these components, but not all, and the TCO structure r Dramatically reduced frequency usage fees changes throughout the lifespan of the TRM. r Reduced 1st and 2nd line maintenance fees Furthermore, the TCO can sometimes be in$uenced more r Reduced network level electricity and power generation by the Engineering department while at other times by fees Operations. This can lead to con$ict within the organization with potentially damaging consequences on the TCO of the r Reduced vendor related equipment support fees Network. r Reduced end of life replacement fees iNOP enables full scale TCO control during the design, implementation and operational phases, ensuring a Our experience shows that part of these cost savings come technically superior network running at low costs - from “low hanging fruits” that can be harvested quickly fundamental for all CTOs and CFOs. Koonsys have run to provide a rapid return on investment. For example, in a tests for several networks with iNOP, and the #ndings recently completed pilot project we found a 36% frequency are shocking - but let me emphasize, not because the fee reduction opportunity for a CEE wireless service MNO’s engineering sta! do a lousy job; in fact, it’s exactly provider. The normal payback period for savings such as this the opposite. There are some excellent engineers out is less than one year but it can take up to 1.5 years to realise there; however, we are seeing rapid and major changes in the full level of savings. technology, shareholder requirements, etc. CAPEX and OPEX savings of this level provide a big incentive for MNOs to integrate iNOP into their networks. In case of Existing Organically Growing Networks Green#eld or upcoming network expansion iNOP makes Organically growing networks always have some room for sure that the use of CAPEX is optimal and you do not create improvement. We have seen room for 20% and even 50% cost a monster that eats up your OPEX over time. With iNOP cuts although as a rule of thumb we estimate that over 15% running in the background you can spend your time on OPEX reduction can be achieved in any network with iNOP. other important tasks to win the race.

www.developingtelecoms.com | October 2016

13 BIO About Koonsys Krisztian Novak, Co-Founder & stretegic business Development Director, Koonsys Founded in 2004 Koonsys is a premium supplier of Radio and Transmission network optimisation and planning services. Koonsys works with major brands including T-Mobile, Mr. Krisztian Novak is co-founder and Strategic Business Telenor, Aircom International and Nokia. As the largest Development Director of Koonsys Radiocommunications independent wireless engineering company in Hungary Koonsys serves MNOs and wireless network operators across Ltd. He has expertise in planning tools, OSS software, GIS Europe and to an expanding global base of customers. and custom software development such as interfacing OSS products to GSM/UMTS and transport networks. Prior to establishing Koonsys Mr Novak held senior engineering positions at Orange Switzerland, Telenor and Vodafone.

www.developingtelecoms.com | October 2016

14 Tackling Last Mile from an African perspective – which solutions will work?

Thecla Mbongue, Senior Analyst, Middle East & Africa, Ovum

Currently wireless is typically the technology used for last mile connectivity in Africa, although this only o!ers low bandwidth. While this may not currently be an issue, it will be eventually. How can operators improve bandwidth and what technologies are best suited to this?

LTE (4G) is meant to handle download speed rates of between 5mbps and 12mbps, which is comparable to speeds obtained from #xed broadband networks. There is increased investment in LTE in Africa, and the technology is used as a substitution to #xed broadband. However LTE deployments and coverage are still limited across Africa due to spectrum allocation and cost issues.

https://www.ovum.com/regulatory-stance-holds-up-lte- rollout-in-francophone-west-africa/

Thecla Mbongue - Ovum https://www.ovum.com/lte-is-displacing-wimax-in-africa/

Satellite is increasingly frequently touted as a way of bringing connectivity to the remotest communities. Will the business case for extended satellite based cellular services to Africa’s remotest communities ever stack up given the reliability and capacity limitations as compared to wireless?

Satellite’s key asset is its full territory coverage. However, so far, the technology has been used to provide broadband to a niche corporate market due to high prices. Competition from the mobile networks has pushed satellite broadband providers to explore and roll out more a!ordable solutions, mostly markets to the SME segments. Rural and underserved populations are usually on lower income and a!ordability (price of terminal) remains a challenge for them to make use individually of satellite connections. There is however a business case for shared service centres (kiosks, cabins, internet cafes) providing access to a community.

www.developingtelecoms.com | October 2016

15 BIO Wi-Fi is increasingly being used for last-mile connectivity – Thecla Mbongue what are the advantages of this tech solution in Africa? Is it Senior Analyst, Middle East & Africa, Ovum used more for connecting rural areas or easing loads in high density urban areas? Thecla Mbongue is a senior research analyst in Ovum’s Wi-Fi is for the moment mostly used to enhance access in Middle East and Africa team and has a key focus on high density urban areas. It can be sponsored by institutions telecoms, media, and technology (TMT) in sub-Saharan (Government, universities, municipalities) to provide free access, provided by businesses (restaurants, shopping Africa. Her research interests cover operators’ strategies malls) to add value to their services or run directly mobile as well as network and regulatory development, networks in various locations. On an operator point of including mobile broadband technologies deployments, view, it helps reaching customers who do not necessarily smartphones and data tra"c uptake, and mobile subscribe to their network, either local customers or international travellers. !nancial services usage.

Some analysts suggest that the regulatory environment Thecla is a regular speaker and chair at industry conferences needs to be fairly relaxed and that too much competition in the region and regularly comments on industry can stymie progression, as building out a network cheaply requires a lot of coordination. What’s your take on this? developments for regional and international media.

I have mixed feelings. Building a network takes time and Thecla joined Informa in 2003 (research unit rebranded resources, but sharing infrastructure could be a way to into Ovum in 2014). In her previous roles, she worked in reduce costs, especially when rolling out in underserved areas. As for competition, MVNOs could be a way to increase England as a marketing assistant with global telecoms competition, meaning that the MVNOs would concentrate carrier Vectone. on marketing and consumer acquisition as long as they already have an existing base and distribution channel.

www.developingtelecoms.com | October 2016

16 Last Mile Rural Connectivity - Moving Beyond Traditional Network Infrastructure

Tim Guest, Freelance Communications and Business Writer

In a world where mobile connectivity is taken largely for granted, it is hard to imagine that around 50% of the global population remains unconnected. Costs associated with deploying traditional mobile networks in isolated regions have long been amongst the key barriers to providing remote connectivity services, but luckily, the technology now exists to provide viable wireless voice and broadband to even the most inaccessible locations on earth, as Tim Guest reports.

It’s an unfair world when it comes to the ‘haves’ and ‘have- nots’ of mobile communications. There are rural and remote Tim Guest communities, which continue to face hardships every day, with their businesses unable to $ourish due to a restricted or non-existent ability to communicate with the wider world. Families also su!er when loved ones leave home to #nd work abroad, perhaps even going to sea for prolonged periods, but are unable to stay in touch. The knowledge that mobile services have been available for more than 20 years in many urban and semi-urban areas only adds to the frustrations these isolated and underserved communities experience.

A large part of the responsibility for the digital divide lies with the mobile network operators (MNOs), though understandably so, as it has largely been a result of the high capital outlay typically associated with macro base station sites and tower infrastructure, including the laying of #bre. Add to that the ongoing operational costs from transmission and power supply, including fuel and logistics for the widespread use of diesel generators and these have all been major barriers for any MNO considering rolling out mobile services to remote communities, anywhere. These costs have simply made the proposition unviable.

www.developingtelecoms.com | October 2016

17 While remote populations - together with remote enterprise The masts used to support the solutions do not require operations, such as mining and oil & gas exploration - complex logistics to transport and erect and are only 15 to often remain underserved and unconnected by e!ective 30 metres tall, depending on the topography and coverage communications, they are no longer seen as service-delivery required. In some cases, when tall structures or elevations challenges for MNOs and regional governments. They are naturally available, towers may not even be needed to now constitute serious revenue-generating opportunities support the remote network equipment. for many stakeholders. The good news is that pioneering Talking to Developing Telecoms, Ms Bhawana Daga, Head technologies are now available and operationally proven to of Marketing and Communications for Omoco, told DT that deliver advanced voice and broadband services needed to Omoco is essentially one product with di!erent variants generate viable pro#t margins for the service providers and and many applications. “Our target customers,” she said, MNOs in almost any isolated region. “are the people who would install our system, such as VSAT, VOIP operators, ISPs, as well as aspiring entrepreneurs who One solution among a growing !eld wish to set up a community network and earn subscriber One such solution is provided by Omoco, which primarily revenue. The end user, on the other hand, is anyone who will caters to the civil rural & remote space and whose parent bene#t from using the network solution, such as villagers in company, Vihaan Networks Limited (VNL) has been pioneering rural and remote communities, or, in the case of our remote remote wireless communications solutions for many years. enterprise solution, users such as oil exploration and mining Omoco’s family of network-in-a-box solutions are already company personnel.” proven in remote civil deployments in a number of regions, Ms Daga added that the company’s customisable and and o!er remote communities and enterprises scalable, scalable systems are also suited for customers such as deploy-it-yourself systems that enable users to get connected hospital owners, hotels, o"ce complexes and building with minimum e!ort, wherever they are. owners, with end users being the people working inside The company says its small cell solutions, which cost a these establishments. “Di!erent variants of our system can fraction of a macro cell deployment, are ideal for situations o!er enhanced coverage and capacity,” she said. In a typical where subscriber base is typically very low, and that they rural deployment scenario, one variant o!ers a stand- can support populations of as few as 300 people or upwards alone network-in-a-box for communication only within the of thousands, with each deployment presenting a viable remote area providing coverage to ranges of about 5km proposition for the operator or customer/owner. Because radius – typically one village or a group of villages. Such a remote areas are often o!-grid with little or no electricity deployment can be scaled up to provide connectivity with supply, Omoco solutions, with battery back-up, have the the wider mobile core network through a regional MNO. option of running on solar power and can generate and store the low amounts of power required to run the system which supports both voice and data communications

www.developingtelecoms.com | October 2016

18 Omoco has a variant that is ideally suited for deployment are only being used when communications are taking place. in disaster relief scenarios to provide rapid local area This restricts the use of high-cost satellite bandwidth and coverage for NGOs, emergency #rst responders, and search also keeps power usage to a minimum, particularly during & rescue teams who deploy to areas following the likes of an o!-peak hours. Some use alternative energy sources such earthquake, when regional telecommunications are down as solar and wind power doing away with the challenges of and an easily deployable mobile network is required. using and maintaining diesel generators.

These new technologies have enabled operators to Overcoming CAPEX and OPEX challenges overcome the capex and opex challenges indicated; their architecture has removed the need to outlay on capital There are a range of players, including satellite and large and physical transportation costs for standard tower mobile infrastructure companies, optimising and deploying infrastructure, as well as costs associated with diesel to new remote wireless solutions around the world. Some power o!-grid, fuel-hungry base stations. The high cost use architecture that switches all local calls locally at the of satellite backhaul transmission has also been removed community base transceiver station (BTS), reducing costs in the case of some of these new remote community associated with switching back through the core network. communications technologies. This also has the e!ect of minimising the delay experienced on non-local switching thereby improving the QoS. So, when an isolated community has been unconnected for its whole existence, or an enterprise operating in a remote Some of these remote community systems rely on VSAT location simply needs to begin by communicating within its satellite backhaul to the core network and have adopted an own immediate area, a simple, easy-to-install system that intelligent use of power and transmission so that resources can be easily scaled up later on to provide total connectivity is an ideal start-point.

www.developingtelecoms.com | October 2016

19 A !nal word BIO

When the deployment of a traditional BTS can cost as much Tim Guest, Freelance Writer as US$250k, deploying such a solution in remote regions makes no sense. With the emergence of solutions such as the Omoco network-in-a-box family, however, low capex Tim Guest is a freelance communications and business and opex deployments mean that more stakeholders than writer and journalist specialising in communications and ever before can get involved. From system integrators and VOIP operators, VSAT operators and ISPs – and not simply electronics. the MNOs – these new players can all move up the value chain by deploying such scalable and versatile solutions in areas where a traditional network site simply does not make sense in terms of ROI.

Ms Bhawana Daga concluded, “With the average cost of an Omoco deployment coming to around US$10,000 versus the cost of a traditional network deployment, our solutions o!er real opportunities to bridge the connectivity divide for the billions of unconnected people.”

www.developingtelecoms.com | October 2016

20 Fibre – the ultimate last mile – now showing explosive growth

Stefan Stanislawski, Co-Founder, Ventura Next

While much of Africa is celebrating the recent upgrade on Internet performance going from 2G mobile to 3G, a new trend has started. In winter 2014 the #rst customer went live on Vumatel’s FTTH network in the Johannesburg suburb of Parkhurst. This event started a revolution in two ways:

r It #red the starting gun in a race to build Gigabit networks for the home and small business;

r It showed that the dynamic Swedish style open access was not only possible in Africa but is hugely popular with residents.

The #rst factor is technical and the second commercial - together they have stimulated a wave of entrepreneurial activity and investment with several new competitors trying Stefan Stanislawski - Ventura Next AB to copy the success and operational excellence of Vumatel.

This trend has spread rapidly with FTTP investment now underway, even if on small scale, in many African countries.

Waves of investment in African telecom past, present and future

Previous waves of investment created the conditions for the growth of #bre. Very fast internet connections clearly need both high capacity backhaul and global connectivity. Through a combination of private sector and numerous World Bank projects, many backbone #bre networks now exist and need to be #lled with tra"c.

www.developingtelecoms.com | October 2016

21 The current extent of African backbone !bre is shown by the excellent and open source AfTerFibre map.

www.developingtelecoms.com | October 2016

22 Dynamic Open Access Fibre Networks On the other hand for #bre networks covering less than – the Swedish Model 100,000 households, the active sharing model is the more economic one. Active sharing also lowers the barriers to Open access #bre networks #rst evolved in Sweden entry for the smaller service providers, who do not need to immediately following the burst of the “telecom bubble” invest in their own equipment but can market and sell their in 2000. Over 15 years several models have emerged, services to a reasonably large universe. In fact, the dynamic tried and abandoned as unworkable either technically or open access model is designed to be particularly suitable for economically. The one that has survived has been re#ned the smaller service providers. This is important as the larger and currently about 25% of all Swedish households are brands, who by tradition are used to vertically integrated or connected to dynamic open access #bre networks where closed networks are initially often sceptical to open access model meaning the #rst movers in this sector are often the they can freely choose between all the major, and many smaller service providers. However, as the larger brands get smaller, brands and a plethora of services. With one comfortable with the dynamic open access model they are exception, these networks are all active sharing and use the often quick to join. powerful and future-proof active Ethernet con#guration. For independent #bre owners, such as local Governments, The exception is the publicly owned city of Stockholm energy companies, real-estate owners, developers or private network (Stokab) that deploy a passive sharing model, investors, the dynamic open access model is the model that i.e. allows service providers to connect directly to its dark has shown to achieve the highest penetration (consumers and business actually taking service over the #bre in relation #bre. This model is made possible as the city will not let to those who are passed by #bre infrastructure) and achieve anyone, except the incumbent, deploy #bre in the city and this quickly. Experience from Sweden and elsewhere show that the Stockholm market is exceptional in terms of the penetration levels in the mid to high 70-ies per cent after 18- concentration of Government entities and large businesses 24 months, depending on competition from modern coax where the passive sharing model can be economical. systems enables with Docsys3.

www.developingtelecoms.com | October 2016

23 BIO Fibre for the Mass Market? Stefan Stanislawski Co-Founder, Ventura Next AB The current investment in #bre is going into upper and middle class homes and businesses areas. This is where With over 25 years helping boards, senior managers the immediate need is greatest and the economics most and regulators to make critical decisions in both !xed favourable. For South Africa the estimates commonly and mobile telecoms, Stefan’s work has encompassed bandied around are for 1.5 to 2 million potential connections. all aspects of telecommunications strategy, business If we think only on terms of mainstream operators with development and litigation as well as participating in some larger scale institutional funding, then this seems reasonable. $100 billion worth of telecom !nancings or acquisitions. However, in many countries in the past, low GDP per capita had not hindered the growth of CATV or FTTH networks. Stefan continues to have an operational role in Particularly in the case of traditional CATV, the technology broadband – he has a part time commercial and was simple enough that local entrepreneurs could build !nancial role with the same team to take the open access ultra-local networks that worked. Across Asia and parts network management elements of the operation global of Europe hundreds if not thousands of local networks – delivering the !rst Gigabit service for subscribers in the emerged often with little legal documentation. Over time these were bought up and professionalised into larger whole of Africa (passive layer owned by Vumatel) as well operators. My belief is that the same could easily happen as projects in Europe and South America. with #bre over the next decade. These are exciting times! In the past he has been on the board of various telecom companies, has run a niche voice service provider and was Head of Spectrum and New Licences at NMT in Scandinavia.

www.developingtelecoms.com | October 2016

24 Connecting Africa: Last Mile from the operator’s perspective

Tolulope Williams, Senior Manager, Access, Transmission, Planning & Optimisation, MTN Nigeria

MTN is one of the most widespread operators in Africa, present eighteen African. While obviously Africa’s comparative dearth of infrastructure sets it apart from most developed markets, the lack of legacy architecture presents many opportunities for creative problem solving. DT Editor James Barton discussed this with Tolulope Williams, the senior manager for access transmission planning and optimization at MTN Nigeria.

Which aspects of Last Mile Connectivity is your team responsible for?

My team is responsible for planning and optimizing the Tolulope Williams - MTN Nigeria access network, which is predominantly microwave, but we are also increasing our #bre penetration. We plan microwave connectivity, mainly for mobile sites for rollout – for 2G, 3G and LTE. We also plan the access #bre as part of the access aggregation network, and we take #bre to microwave hub sites. The way our network is we have hub sites that sites aggregate to, and we try and take #bre through these.

In Africa as opposed to developed markets, what are the last mile connectivity issues that you face as an operator?

Our Last Mile Connectivity is predominantly microwave, so a major challenge is the availability of spectrum. In certain locations, such as cities, the microwave space is really congested – especially the last mile frequencies of 18GHz and 23GHz, and that brings about a lot of challenge. You have multiple operators contending for these frequencies, so apart from trying to avoid interference within your network, there can also be external interference because the licensing of the spectrum is not exclusive – whoever gets there #st can use it #rst.

www.developingtelecoms.com | October 2016

25 Is that an issue that could be addressed by more With cost such a prohibitive factor to widespread specific regulation? fibre deployment, what technical edge does it offer over microwave? Regulation can address that; we’re also looking into alternatives to microwave, such as increasing #bre There’s really a limit to the amount of capacity you get on penetration. We’re trying to increase the ratio of sites of microwave, and now the regulator is trying to open up new #bre on a yearly basis, but deploying it involves other major spectrums like E-band. Nigeria is a high-rain region, and the challenges. For example, getting right of way – with multiple higher the frequency, the greater the rain impact. With new government agencies controlling the same domain, broadband technologies like LTE and LTE-A, the capacity to gaining the right of way to put #bre into the ground is very the cell site is increasing. There is really a limit to what you expensive, with the government collecting a huge amount can do on microwave; after a certain point, you need to be of money. In a developing country like Nigeria, there is a taking #bre to nearly 80% of your sites if you want to o!er lot of road construction going on, and this impacts on the e!ective broadband. The main reason we are pushing #bre deployment of #bre infrastructure – there’s no protection is to be able to provide the capacity. for it. The regulator is trying to make #bre infrastructure important and push this with the government but we’re not Capacity is particularly an issue in densely populated yet there – a lot of road construction companies, especially urban areas. What are you doing to address network the smaller ones, don’t abide by the rules and won’t hesitate congestion in these areas? to just break or destroy #bre infrastructure. There are We are undertaking network modernisation to enable us warnings in place, there are speci#c ways to work around it better use of the frequency by modifying the topology of but combating this attitude is really a major challenge. We the network; by creating more microwave hub sites that we do want to use #bre to reduce the reliance on microwave can take #bre to, the existing hub sites are decongested. but it does have its problems. One of the problems of frequency interference is having too One of the challenges you have is that everyone who wants many leads in a particular tower; this is usually the case in to deploy #bre, in 90% of the country you need to put in hub sites. We are creating a lot of new hub sites as part of your own infrastructure in terms of docks on the road; there our network redesign and modernisation; if we can redirect are only a few places where they build routes but also put the leads to these sites and reduce the average number of in docked infrastructure. A lot of things can help; if road physical microwave leads that go to any individual site, that construction is standardised such that every road comes helps with the frequency management. with docks then it makes it much easier to put in #bre as it We are also introducing Class 4 microwave antennas, eliminates the need to dig into the ground. However, what which have better radiation characteristics for combating happens today is that provision of docks is not prioritised interference. This means that you can re-use frequency by the government, but this would be extremely helpful if a lot more; they’re slightly more expensive than Class 3 this infrastructure was included as part of the road build- microwave antenna systems but they have that advantage. out; telecos would be able to come in and install #bre into the docks. You’d also have more assurance that docks With some of our hub sites we’re going from over 30 links provided by the government wouldn’t be as easily damaged to a maximum of 10 physical links, which means we have compared to an operator’s bespoke infrastructure. hubs going from supporting over 100 sites to supporting a

www.developingtelecoms.com | October 2016

26 maximum of 30 sites. By redesigning the network, creating If operators are deterred by the cost of deployment, what’s more hub sites, and reducing the number of links that come the incentive to deploy to these regions? to a particular microwave tower, we make better use of the First and foremost, any operator needs to make money as frequency and reduce interference. However, to do this, a company, but in trying to support the government with we need to be able to get #bre to our sites, and once we’ve some of their broadband initiatives for rural areas, the done this we can start looking at how we can get last mile major solution right now is satellite. There are initiatives on #bre-to-tower. the horizon to encourage rural deployment, and they are expected to involve the government giving out contracts How does the network’s topology affect deployment? to operators to provide coverage, but thus far they are not When we talk about ‘$at’ networks with regard to widespread. microwave; you cluster your network and have various What are the other challenges in connecting remote areas? hub sites, and sites simply go to the closest hub site. In the existing network, you have microwaves links crossing each One of the major challenges is intense competition – telecom other, but in a $at network they’re not $ying over each services have been commoditised, leading to intense price other, they’re just grouped into clusters and they don’t wars in some markets, including Nigeria. There’s a huge shift criss-cross. This is what we mean by a $at network in terms from voice towards data, and although this requires a lot of microwave. of CAPEX investment it doesn’t provide the corresponding revenue. There’s been a lot of price erosion due to the Does this make it more cost-e#ective to provide rural coverage? competition, with operators cutting prices to unsustainable With remote areas, from the business point of view, the lows. Couple this with economic instability – in Nigeria, question is how much revenue you actually make from the exchange rate is going up and this a!ects our ability these locations. Because of the cost of actually building out to import equipment – and it’s clear that operators are microwave to such remote locations, we try to use satellite beginning to feel the heat. The cost of phones is very high, as well. This comes with its own associated costs. but operator revenue is way down so the prices are just not sustainable. If things don’t improve, providers are going to A lot of people come to us with di!erent satellite solutions, need to agree to increase prices, because if things continue ones that allow us to minimise how much space segment at this rate then we’ll see operators folding soon enough. we have to buy from the satellite operator. We do have these kind of networks at MTN but only a very few compared How are operators going to be able to compete in such an to our physical sites, of which we have over 13,000; our environment? rural telephony network is less than 300 sites. In a lot of countries, it’s actually the government that drives the If your revenue is declining, you need to start looking at broadband initiative to rural areas; operators need a lot reducing your operational cost. There are a lot of initiatives of incentives in order to begin o!ering services. If you’re around reducing OPEX – it’s not just about reducing the going into a rural area, you’re not going to make money – number of sites, it’s now about trying to generate revenue however, governments know that broadband is an engine from these sites. Obviously operators have to spend money of economic development, so they need to incentivise rural on their sites, so they’re looking at the impact of this on broadband deployments by helping operators reduce the their revenue and trying to work out how they can get sites cost of doing this. generating income rather than draining it. If it’s not going

www.developingtelecoms.com | October 2016

27 BIO to be a coverage issue, they’re shutting the sites down; Tolulope Williams, Senior Manager Access, Transmission, it’s a matter of business optimisation in the name of cost Planning & Optimisation, MTN Nigeria reduction.

MTN has done a lot of outsourcing in order to optimise Tolulope Williams is a graduate of Electronic and Electrical costs; we’re looking at models of tower-leasing wherein Engineering from the Obafemi Awolowo University another #rm handles the construction of towers. In the area (O.A.U) Ile-Ife, Osun State Nigeria. He also has a M.Sc of #bre deployment, we’re looking at similar possibilities of leasing; this is common in South Africa but not the rest degree in Telecommunications from Birmingham City of the continent. However, in a couple of years it is likely to University United Kingdom. He has attended several be more of a trend, particularly as the Nigerian regulator is Telecoms training both international and local. He has encouraging the model of infrastructure providers. 16 years of experience in the Telecoms industry, 14 of which has been in the mobile sector. He is a transmission expert with several years of experience in operations and maintenance and planning of SDH, DWDM, packet and optical transport networks. He is currently the senior manager, access transmission planning in MTN Nigeria.Tolulope Williams is a graduate of Electronic and Electrical Engineering from the Obafemi Awolowo University (O.A.U) Ile-Ife, Osun State Nigeria. He also has a M.Sc degree in Telecommunications from Birmingham City University United Kingdom. He has attended several Telecoms training both international and local. He has 16 years of experience in the Telecoms industry, 14 of which has been in the mobile sector. He is a transmission expert with several years of experience in operations and maintenance and planning of SDH, DWDM, packet and optical transport networks.

www.developingtelecoms.com | October 2016

28 For more on Last Mile Connectivity in emerging markets, visit w w w . d e v e l o p i n g t e l e c o m s . c o m

O u r n e x t S p e c i a l R e p o r t

Mobile Banking & Finance

This report will examine how the ubiquity of mobile phones in emerging markets has allowed mobile banking services to $ourish, empowering consumers who previously had no access to banking and creating lucrative revenue streams for operators. Publication – January 2017

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