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"Providing Cost Efficient Coverage To

Previously Unprofitable Areas”

12th November 2013

bad news, worse news, drivers, challenges, issues, opportunities, not so bad news…

The challenge of rural coverage

• No money - $2 ARPU

• No power – dead devices

• No access – bad or no roads

• No interest – from MNOs

• High cost – Capex & Opex

• Low literacy – voice only

• Vast areas – remote communities

• Long distances - distributed communities

• Tech divide – urban priority & data

• High risk – licence obligation vs loss making sites

GSM industry in a state of change

• Licence renewal (10-15 year anniversary) looms (unprecedented threat of losing a licence - imagine

losing it because of a lack of rural coverage)

• As voice revenue declines, data revenue

demands significant investment

• Operator generation shift – Technology centric to

marketing centric

• Leading to a focus on greater efficiency and

leveraging capex to maximise returns

• While regulators and users grow more

demanding

OPERATOR CHALLENGES

• Licence renewal

• Flattening revenues

• Increased costs

• New technology capex (LTE – 5G)

• Legacy maintenance & upgrades

• Increasing opex

• Regulatory pressure

• Competition – other operators and government

Traditional Solution Challenges

• MNOs have difficulty in accepting technologies

outside their major vendors – so limited rural

solutions

• Towerco model presently limited to passive

infrastructure – so its not the answer

• USF models are slow and politically motivated -

so not necessarily sustainable on its own

• Major backbone upgrades to fibre for data

means low priority rural rollout for operators –

but NOT regulators

Demand for Rural GSM

• The next 1billion subscribers • 87% will come from emerging economies

• Large areas in developing countries without

coverage • 70% live in rural communities

• Telecoms - the key to economic development • Economic growth increases by 1.2% for every 10% rise in mobile

users - GSMA

• Political and regulatory pressure • Licence renewals and a drive towards rural empowerment are

resulting a scramble to address the lack of rural service delivery

The challenge of rural coverage

• No money - $2 ARPU

• No power – dead devices

• No access – bad or no roads

• No interest – from MNOs

• High cost – Capex & Opex

• Low literacy – voice only

• Vast areas – remote communities

• Long distances - distributed communities

• Tech divide – urban priority & data

• High risk – licence obligation vs loss making sites

No money? - There is money

No power? - Solar innovation

No access? - Lightweight solutions

No Interest? Regulation & politics

High cost? - New business models

• Outright purchase of equipment

• Supply, installation, commissioning, support.

• Vendor MNO

• Leasing

• Installation, commissioning, support

• Vendor Finance House MNO

• Managed services

• Provision of capacity against set of KPI’s

• Vendor Entrepreneur MNO

• Revenue share

• On sliding scale

• Vendor Entrepreneur MNO

Low literacy? - Smart people

Vast areas? – VSAT solutions

Long distances? - Added value solutions

Tech divide? – Rural tech solutions

High risk? – Zero risk solutions

The answer to rural coverage

• No money

• No power

• No access

• No interest

• High cost

• Low literacy

• Vast areas

• Long distances

• Tech divide

• High risk

• There is money

• Innovative solar

• Lightweight solutions

• Regulation & politics

• New business models

• Smart people

• VSAT solutions

• Added value solutions

• Rural tech solutions

• Zero risk solutions

Thank you

CONTACT:

Dion Jerling

Special Projects Director

CONNECT AFRICA

Cell: +260 965 860 113 (Zambia)

Cell: +27 82 487 8354 (South Africa)

Email: dion@connectafrica.net

www.connectafrica.net