Kunle Oloruntimehin
15 December 2008
opinion
IT is estimated that developing regions of the world so far, account for only 17% of users of mobile broadband. However, given the underdevelopment of the fixed-line infrastructure in these regions, mobile broadband services are expected to continue to record impressive growth and the developing world is indeed, projected to account for up to 57 percent of global mobile broadband users by the end of 2015.
The skylines across many cities in Nigeria today, are dotted by towers erected by telecommunication companies. This is one fall-out of the vibrancy of the telecommunications sector in Nigeria, an aftermath of a revolution in telecommunications that was sparked off in 2001 with the auction for GSM licenses and subsequent award of two licenses to MTN and the then Econet Wireless respectively. Today, that revolution is impacting on practically every other sector of the economy, providing jobs directly and indirectly to hundreds of thousands of Nigerians, driving efficiency and productivity and bringing families and friends closer together.
Where poor infrastructure among other factors, constituted a massive roadblock for the growth and spread of fixed lines in Nigeria, mobile telephony, epitomized by GSM, has proven to be a veritable alternative whose impact in less than a decade continues to astound many analysts. Today, according to statistics that are reeled out regularly by the Nigerian Communications Commission, Nigeria boasts of well over 53 million connected telephone lines, a far cry from the estimated 400,000 lines which the country struggled with in the days prior to the debut of GSM.
The GSM companies have performed creditably in Nigeria. The financial results of the publicly quoted ones have generally shown commendable profitability amidst a regime of massive investment in Nigeria. Average revenues per user, ARPU, have in recent years, however, been on a steep decline. This is due largely to the fact that having largely exhausted the upper ends of the social pyramid, the telecom companies now appear to be scrambling for the lower ends of the social pyramid, which is made up of people with much lower disposable incomes.
This massive decline in ARPU is expected to continue as competition heightens among Nigeria's telecom operators for the lower ends of the social pyramid. To preserve profitability therefore, it is imperative that GSM operators especially begin to relook more critically areas where they can optimize capital expenditure (CAPEX) as well as operational expenditure (OPEX).
One key area where this can be done is the Radio Access Network. The Radio Access Network is one of the major components of a mobile network and by some estimates, accounts for between 60 and 70 percent of the capital expenditure of a typical mobile network. The evolution of Nigeria's mobile companies towards third generation telephony or 3G with the accompanying deployment of 3G technology is yet another trend that threatens to increase capital expenditure.
3G technology deployment would typically imply the acquisition and deployment of additional hardware and software to the Radio Access Network. 3G of course, is one of the greatest enablers of mobile broadband. It allows for faster data access to the Internet even while the user is mobile. So a businessman at a remote location could enjoy the mobility advantage by simply installing his 3G datacard in his laptop and in a matter of seconds have access to the Internet enabling him collaborate with partners and attend to clients and customers. A farmer could do the same, in his farm and in the process, possibly evaluate the prices at which produce is being sold in different markets. A force of 30 sales people located in different parts of the country could stay in touch and share important sales and training materials by virtue of the mobile broadband that is made available by 3G. The possibilities are indeed limitless.
Indeed, the ITU lists the growth of mobile broadband in developing countries like Nigeria as one of the important ways by which the developing world is likely to bridge the digital divide. It is also seen as a viable catalyst for the achievement of the Millennium Development Goals.
But upgrading the existing second generation GSM networks to 3G has wider implications. These upgrades apart from the hardware and software aspects also entail the transmission aspect of the radio access network, RAN. The transmission aspect of the RAN, is also referred to as the RAN Backhaul. This RAN Backhaul needs to expanded to accommodate the increased bandwidth requirements for mobile broadband.
There is also the issue of scarcity of radio frequency, which tends to add to the direct and indirect costs of upgrading a typical RAN to accommodate 3G.
However, companies like Cisco the global Internet Protocol technology leaders have since provided a veritable option to mobile operators transiting to the more technologically advanced 3G telephony. This alternative is called the Mobile Wireless Router (MWR). Mobile wireless routers, ensure that mobile operators can quickly deploy 3G using existing RAN backhaul, while helping these operators to maintain CAPEX and OPEX at strict levels and without frequency re-use limitations. This is typically achieved through the optimization of GSM traffic through the use of Internet Protocol and in so doing, leading to direct cost savings.
Another important use of this Cisco technology is the IP enablement of the Radio Access Network such that typical base station locations can be used to provide such services as WIFI, camera surveillance services, traffic monitoring among others.
Cisco also provides the ability to extend 3G services to all categories of end-users, from individual customers to small and medium enterprises all the way to large corporate organizations. For instance, 3G modules can be installed into existing Cisco Integrated Routers (ISR) or directly bundled into smaller router devices which are also manufactured by Cisco. The result has often been that consumers have tended to use transmission options in a variety of creative ways such as at Petrol Stations, ATM Machines, small offices, temporary project sites, among many others.
What about the end-user experience? This is typically determined by how well the everyday applications which run over these networks, are being catered for. Cisco, through a unique technology called the Wide Area Application Services, WAAS, provides for application optimization to ensure that bandwidth use over the 3G network is optimized in a way that user experience remains excellent in a consistent fashion. This technology is available to Enterprise or Corporate customers as well as to individual customers. Mobility is also catered for through the provision of direct application optimization to end user devices like laptops.
There is a great deal of evidence linking country GDP growth to increasing internet penetration. Nigeria's march towards enhancing Internet penetration via mobile broadband as provided by 3G telephony is commendable and represents a huge leap forward for Nigeria's economic growth and developmental aspirations. It is imperative, however, that telecom networks in Nigeria, manage this transition carefully. Amidst the falling ARPU figures and against the backdrop of the losses that have been reportedly incurred by telecom networks elsewhere in the world upon acquisition of 3G licenses, it is critical that telecom networks spare no effort towards ensuring that their 3G operations are optimized for efficiency and cost savings. This is one way by which they can continue to remain reasonably profitable enough to continue to provide services to Nigerians even while continuing the quest for investment in cutting edge technology.
•Oloruntimehin is a Lagos-based Systems Engineer
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