15 April 2008
Nairobi — It is music to the ears of poor populations in developing countries, as mobile phone companies make them their hottest market.
There is a big shift in the way providers are enrolling new mobile phone users. And with the numbers diminishing from developing countries where almost 100 per cent of the population own mobile phones, developing countries hold a good stake in potential markets.
Almost three billion people live in the world's rural areas, but have little or no access to information and communication technologies that are critical to their economic progress.
Affordability, however, remains the key challenge for this market as companies seek ways to break the barrier. Nokia Siemens Networks, a leading global enabler of communications services, is pushing for poor populations to own technology.
The company last year launched the Village Connection Internet Kiosk designed for the needs of new growth markets by providing voice, SMS and more recently Internet services to rural folks at an affordable price from the privacy of their homes. The company says it is selling the idea to operators in emerging markets.
"We are working with many operators, on trials in many countries but we carried out our first public operation in Tanzania," says Mr Rauno Granath, the head of New Growth Markets Nokia Siemens Networks.
"We are selling this to operators and are in discussion with several of them in several countries including Kenya," he adds.
The technology comprises GSM access points that provide wide area coverage, located in the villages and run by a local entrepreneur, in his homestead, with an antenna at the roof of his building. Regional access centres then route calls between villages, and provide connection to other networks.
The main solution component is, however, software, allowing the kiosks to carry multiple functions such as radio access, switching, and holding updated subscriber bases. Each access point handles call control and completion for up to approximately 250 subscribers within a village. This means that typical consumers with low income in rural areas can spend little on mobile and Internet services.
Traffic leaving the village towards the access centre (kiosk) takes up only little bandwidth and uses an efficient native IP link. An Internet kiosk can also be set up, allowing villagers access to business applications, information and services such as healthcare and education.
"We are suggesting a new business model and we expect the mobile phone operators to develop it further," said Mr Granath.
An operator's technology requirement will be determined by factors like terrain, demographics, financing and what they already have in their networks. Adding more subscribers to an operator's network will cost them less, he says.
Granath says operators would own the equipment and agree on profits and costs sharing with the entrepreneurs running the kiosks. Costs include bandwidth and electricity expenses. Most villages are not connected to electricity, and in such cases, alternatives like solar and generators come to play.
"We started to see commercial implementations towards the end of last year, and expect operators will begin to put these kiosks into the picture," he said. Mobile phone penetration is growing fast with 35 million new subscribers added across the continent last year.
The Government is implementing a model almost similar to this, dubbed Digital Villages, promoting Internet connection to rural areas as part of its development agenda.
Village connection has been tried successfully in select emerging markets, including India and Tanzania. The solution was recently shortlisted for the 13th Annual Global Mobile Awards by the GSM Association (GSMA), in the category of Best Use of Mobile for Social and Economic Development.
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