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OCTOBER 2016

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Last MileConnectivity

In Emerging Markets

Contents

Last Mile Connectivity in Emerging Markets

Foreword: Last Mile Connectivity in Emerging MarketsJames Barton - Editor, Developing Telecoms

Sponsors:Operator Partner: MTN NigeriaSilver Sponsor: KoonsysArticle Sponsor: Omoco

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

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

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

Last Mile Rural Connectivity - Moving Beyond Traditional Network InfrastructureTim Guest - Communications & Business Writer

Fibre - the Ultimate Last Mile, Now Showing Explosive GrowthStefan Stanislawski - Co-Founder, Ventura Team

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

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w w w.developingtelecoms.com | October 2016

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 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for last mile connectivity in emerging markets is the fact that developing countries are typically unencumbered by outdated legacy architecture – although this of course brings its own challenges in terms of building out infrastructure in a cost e!ective way.

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.

Foreword

James Barton, Editor, Developing Telecoms

James Barton - Developing Telecoms

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This report focuses on the di"culties faced by operators in emerging markets looking to deliver data bandwidth cost e!ectively to challenging locations, including remote communities and busy cities. While the challenges are myriad, improvements in technology are increasingly making the business case viable and allowing operators to extend their reach to areas that just a few years ago would have been logistically and #nancially unfeasible to connect.

We have enlisted the help of several experts in this #eld to discuss the most appropriate and e"cient technologies for the various use cases of last mile connectivity, and it is my pleasure to be able to o!er our readers the insight of major analyst #rms Gartner, Ovum and Ventura Next AB.

In addition, I was privileged enough to interview Tolulope Williams of pan-African operator group MTN to discuss the #rm’s approach to connectivity challenges across the continent; I would like to extend my thanks to him along with all of the contributors to this Special Report.

At Developing Telecoms, we aim to provide the greatest degree of insight into the technologies that have the greatest impact in emerging markets, and our series of Special Reports are a key pillar of this mission. They are made possible by our sponsors, and I would like to extend my personal thanks to the sponsors of this report, Koonsys and Omoco, both of which have contributed insightful articles to the report.

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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

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

Sponsors

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Ian Keene - 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.

Ian Keene, Vice President of Research, Gartner

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.

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.

Emerging Markets will take a fresh approach to Last Mile

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How will development progress in comparison to developed markets?

Developing countries will begin to go the way of developed

countries, where now operators are looking to extend

coverage to small communities and villages rather than

for example extending 4G coverage over the entire

country, which is incredibly expensive and o!ers no real

business case. In the developing world, the business case is

paramount – it’s pointless to have a vast amount of capi al

expenditure is there’s going to be no return on investment –

so I think it will happen the same way.

While wireless will be signi#cant, we’ve also seen cases

where Wi-Fi has become important; if there’s a #xed

line coming into the community then people can share

connectivity through Wi-Fi. The bene#t of this technology

is that it’s in practically all devices that people use, allowing

it to remain low-cost in comparison to cellular, where the

price rises incrementally between 2G, 3G and 4G. Wi-Fi can

also be used on old devices such as older PCs, which is a

signi#cant factor in emerging markets.

The ubiquity of Wi-Fi makes it a good way of connecting

communities in tandem with #xed-line backhaul. On that

side, we’re seeing a similar situation in developing markets

to the one that unfolded in more developed markets, which

is that the distance between #bre optic cable and end user is

getting shorter. Fibre is going out to more of the network –

it’s not reaching the end user of their remote community by

any means, but it is getting closer. In terms of maintenance

costs, if one can run a #bre cable – assuming the right arrays

for the copper infrastructure are present – a lot of the more

localised central o"ce-type locations can be disposed of,

reducing OPEX, and the connection becomes more reliable.

The shorter the length of copper/COAX at the end there, the

higher the bandwidth that can be provided. Of course, in a

lot of developing countries people steal copper cable, which

is a problem, so getting rid of as much copper as possible is

positive. It’s a long time before #bre is going to reach into the

rural communities in many countries, but it’s getting there.

Then of course there’s satellite, which is increasing in

bandwidth and – sort of – coming down in price. I was

recently with NBN, the National Broadband Network in

Australia, which is one of the few neutral networks in the

world. The government has essentially ordered them to

supply broadband to all households, which is no mean feat

given the large number of extremely remote communities in

Australia. The only answer there is satellite, as anything else

is ridiculously costly – in practical terms, it’s the only way of

connecting these communities.

Satellite will therefore always play a part; it’s more expensive

and doesn’t always provide the performance of a #xed line,

but it’s often the only way of providing communications to

remote environments. Lower income people such as farmers

in emerging markets aren’t going to be able to a!ord a

satellite connection; the best they’d likely be able to a!ord

is a 2G phone. Putting cellular out in such a remote area isn’t

going to make business sense though, so it has to be funded

some other way.

In conclusion, very low cost cellphones and Wi-Fi devices

are going to be crucial for connecting people; satellite

plays a part at connecting communities but in developing

countries personal satellite devices will be too una!ordable

for working classes.

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High-population Urban Areas

Which technologies are being used to ease the network load caused by urban densification?

It depends how much government support there is – it’s

hard to have a #ve year ROI in upgrading all this, so if a

government steps in with an incentive then that de#nitely

helps. Getting the cost of putting a new network into place

is crucial – organising rights of way, deploying cables in the

ground; these are a huge percentage of the CAPEX cost.

Where these costs are low is where we see communications

growing in terms of bandwidth and availability of service.

For example, putting #bre past a premise in an urban

environment – the Chinese Ministry of Communications

can get the cost of this down to well below US$200 per

premise, which is pretty incredible, particular compared to

an FttH project in Australia which budgeted AUS$3000 per

premise. In Russia, people just put wires up wherever they

like and don’t have to worry too much about permissions –

those are about $230 or so. In the US, they’re trying to get

the cost down to $1500, and that’s in a scenario where the

city is allowing them to use their power, not implementing

planning restrictions etc, so there’s a huge variety of costs

in getting #bre closer to the premises. For example, putting

#bre in a block of apartments and then using the internal

cabling would provide much higher bandwidth services, but

it means everyone has to play ball. In some environments it

works but in some people just oppose each other, nothing

happens, money disappears and the project fails.

The technology’s there – it’s the organisation that’s needed.

Looking at a country like China for example; despite its

big cities, it has a lot of people in rural communities. As

the government essentially dictates how roll-outs should

happen, costs can be kept down. In other markets, where

operators are opposing each other, it can be chaos and

nothing happens – organisation has a lot to do with it, it’s

not necessarily the economic strength of the country or its

location. If projects can be organised and everyone believes

broadband access will be great for the community then it’ll

work; if everyone wants to #ght their corner and make as

much money as they can then it’s always a failure.

In China, all the major operators are state-owned; what about in a more competitive market such as India?

India has ridiculous competition; there’s so much

competition nothing happens, it’s anti-competition in a way!

It’s had the opposite of the intended e!ect, as no-one does

anything. They can address this issue with consolidation; the

regulators have shot themselves in the foot by limiting the

amount of spectrum they were willing to license for mobile

use. They cut it into such little slices for everyone that –

while it was OK for voice networks – it’s absolutely useless

for data. Operators are therefore unwilling to invest – how

are they supposed to get new services to people when they

haven’t got the raw ingredients to work with because it’s too

widely divided among a lot of competitors? In that sense,

India’s a great example of what not to do, while China’s a

great example of what to do.

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Not every market in the world can bring their operators under government control – how can China’s example be emulated in a free market?

Where it also works is when the city or regional government

gets together with the interested parties – i.e. service

providers and stakeholders – and builds public-private

partnerships. This is more common in developed countries,

such as Tier-2 or Tier-3 cities in the US – it’s organised on a

local basis, resulting in a win-win situation. It doesn’t have

to be on a national basis. Government regulators need to

set rules in place that enable the growth of communications

without being too authoritarian about it; competition isn’t

necessarily the best way of moving forward, a monopoly

situation can be better if everyone sees the bene#ts. If

it’s a state-run monopoly, then those bene#ts are better

communications and therefore a better economy in the

area that the communications are provided. Having the

interested parties work together is key, but so is having

projects that themselves work.

It’s also important to be technology-agnostic; we’ve seen

some chronic failures where the government has decided

on what the tech will be, and one technology does not #t all

situations – it’s a path for disaster. China has decreed that all

new constructions must use #bre, which is #ne as they have

a lot of new construction going on, but they don’t stipulate

this for older premises. If they said that every premise had

to have #bre, this would multiply broadband projects by

around a factor of #ve over time; however it would be hard

to see the successes of this as it would be spread out in time.

In Australia, the government pledged #bre to the premises

for around 90% of the population and promptly took

a step back when people pointed out that there were

perfectly good networks in place that could be enhanced

in order to deliver these services, rather than building out new infrastructure at massive expense. So they utilised the current infrastructure and improved the bandwidth that people receive, regardless of whether they’re in an extremely remote rural area or right in the middle of a city centre. Being pragmatic about technology and leveraging what’s there generally makes sense, although of course there are some environments where it really doesn’t, and has to be replaced.

In conclusion, we need to see operators being pragmatic and making use of the assets, while regulators need to avoid being too dominant.

‘Shoulder’ Areas

How can we de!ne ‘shoulder’ areas and what are the best approaches for connecting them?

People usually look at this in terms of population density; you have dense cities, sparsely populated rural areas, and then suburban ‘in-between’ areas. However, this can be the wrong approach – it can be better to look at ‘pay-packet density’. Where do people have money to pay for these services – or alternatively, where are businesses located? These areas can become a focus after cities – the number one priority – have been developed. A lot of countries are now cottoning on to a demand-based model, which prioritises vocal communities calling for improved services over quieter areas that aren’t requesting them. This harks back to the idea of domineering regulators – government departments often won’t take this idea into account at all, they’ll have their own programme whereby certain areas get services #rst purely because it’s part of the plan. They have to look at how local economies could bene#t and take demand into account, rather than having bureaucrats planning the project without going out

and talking to the communities.

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A lot more money is being ploughed into broadband access

year-on-year as people see that there’s a need for higher

bandwidth connectivity. There’s a strong commercial

element to this, as businesses will be attracted to locate in

areas with good connectivity. The digital divide between

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.

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BIOIan Keene, Vice President of Research, Gartner

Ian Keene is a Vice President of research at Gartner. He

analyses and advises on the broadband access market

globally.

Krisztian Novak - 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.

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

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 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.

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Intelligent Planning for Optimisation of Last Mile Connectivity


Development of new technologies for wired and wireless transmission is a must, and all major manufacturers are investing in R&D to meet this challenge. However, the majority of the R&D e!ort is aimed towards hardware solutions which could add further complexity to the network. Transmission network planners need to develop strategic plans to meet the current demand and the future challenges that 5G and IoT will bring.

Backhaul network improvements providing last mile connectivity were tailored to RAN needs, typically as a next step to roll-out. As backhaul was not the blocking point for end user quality in 2G networks, MNOs initially put more emphasis on RAN optimization with little or no consideration of the TRM. This has led to TRM networks being far from optimal, with room for major quality improvements and, more exciting, signi#cant cost savings.

Balancing the Technical and Financial Needs of MNOs

The challenges facing operators in last mile network planning are both technical and #nancial, but ultimately the challenges come down to how to balance the ever increasing demand for data and subsequent pressure on the transmission network with the ever-reducing ARPUs.

The best solution would be to build an unlimited capacity #bre optic transmission network. However, the reality is that this is a dream for the vast majority of network operators in emerging markets so more sensible solutions utilizing existing infrastructure investments need to be adopted.

A cost e!ective approach is a hybrid deployment of #bre optic and wireless backhaul technology, leveraging existing investments where possible. However, existing engineering practices have failed to come up with suitable solutions once the level of network complexity is reached. In general they address isolated problems, with technical solutions. This creates a paradox, engineers are working to #nd the best technical solutions, while management are looking for the best value with a quick ROI.

Traditional network planning tools, in line with current engineering practices, focus on technical solutions and lack any #nancial aspect. This leads to a limited solution, which needs to change. A shift is required to an “optimization focused” design methodology, integrating a full scale analytical approach in the network design phase.

The iNOP solution developed by Koonsys provides a solution to these challenges for both Green#eld network projects and large scale network expansions. iNOP, standing for Intelligent Network Optimization, provides answers for the most demanding dilemmas of network build, operation and expansion including:

How to plan and build a future-proof transmission network with the lowest TCO but maximized capacity;

How to minimize TCO of RAN and transmission networks;

How to make savings on OPEX while improving the capacity of TRMs;

How to support marketing planning under time constraints;

What-if analysis to support technical strategy planning

Scenario analysis for budget planning to #nd the optimal solution

Regular analysis of savings potential in the network

How to manage TCO through operation to reach the highest levels of e"ciency

iNOP utilizes mathematical algorithms, to e"ciently manage complex networks and analyze a huge number of network variants. This enables MNOs to e!ectively manage and operate their networks. iNOP acts as the central brain of network development during the networks lifecycle. With iNOP, MNOs are able to maintain their network at an optimal level at all times, the network is always up-to-date, network operation costs remain low, and there’s no need for ad-hoc network optimization which demands unpredictable and irrational investments.

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Understand Your Real TCO - and Prepare to be Shocked

The Total Cost of Ownership (TCO) of a TRM network is made up of multiple CAPEX and OPEX components. Some of these components are directly linked to the number of network elements, others indirectly, and some are quasi-taxes (e.g. frequency licence fees). MNOs are able to in$uence some of these components, but not all, and the TCO structure changes throughout the lifespan of the TRM.

Furthermore, the TCO can sometimes be in$uenced more by the Engineering department while at other times by Operations. This can lead to con$ict within the organization with potentially damaging consequences on the TCO of the Network.

iNOP enables full scale TCO control during the design, implementation and operational phases, ensuring a technically superior network running at low costs - fundamental for all CTOs and CFOs. Koonsys have run tests for several networks with iNOP, and the #ndings are shocking - but let me emphasize, not because the MNO’s engineering sta! do a lousy job; in fact, it’s exactly the opposite. There are some excellent engineers out there; however, we are seeing rapid and major changes in technology, shareholder requirements, etc.

Existing Organically Growing Networks

Organically growing networks always have some room for improvement. We have seen room for 20% and even 50% cost cuts although as a rule of thumb we estimate that over 15% OPEX reduction can be achieved in any network with iNOP.

With savings of this level there are multiple factors involved which can typically include any or all of the following:

Unnecessary microwave links - these average between 15-20 % in any network;

Optimized topology

Dramatically reduced frequency usage fees

Reduced 1st and 2nd line maintenance fees

Reduced network level electricity and power generation fees

Reduced vendor related equipment support fees

Reduced end of life replacement fees

Our experience shows that part of these cost savings come from “low hanging fruits” that can be harvested quickly to provide a rapid return on investment. For example, in a recently completed pilot project we found a 36% frequency fee reduction opportunity for a CEE wireless service provider. The normal payback period for savings such as this is less than one year but it can take up to 1.5 years to realise the full level of savings.

CAPEX and OPEX savings of this level provide a big incentive for MNOs to integrate iNOP into their networks. In case of Green#eld or upcoming network expansion iNOP makes sure that the use of CAPEX is optimal and you do not create a monster that eats up your OPEX over time. With iNOP running in the background you can spend your time on other important tasks to win the race.

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About 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, Telenor, Aircom International and Nokia. As the largest independent wireless engineering company in Hungary Koonsys serves MNOs and wireless network operators across Europe and to an expanding global base of customers.

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BIOKrisztian Novak, Co-Founder & stretegic business Development Director, Koonsys

Mr. Krisztian Novak is co-founder and Strategic Business

Development Director of Koonsys Radiocommunications

Ltd. He has expertise in planning tools, OSS software, GIS

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.


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?

Thecla Mbongue - Ovum

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/

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.

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




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

Wi-Fi is increasingly being used for last-mile connectivity – what are the advantages of this tech solution in Africa? Is it used more for connecting rural areas or easing loads in high density urban areas?

Wi-Fi is for the moment mostly used to enhance access in high density urban areas. It can be sponsored by institutions (Government, universities, municipalities) to provide free access, provided by businesses (restaurants, shopping malls) to add value to their services or run directly mobile networks in various locations. On an operator point of view, it helps reaching customers who do not necessarily subscribe to their network, either local customers or international travellers.

Some analysts suggest that the regulatory environment needs to be fairly relaxed and that too much competition can stymie progression, as building out a network cheaply requires a lot of coordination. What’s your take on this?

I have mixed feelings. Building a network takes time and resources, but sharing infrastructure could be a way to reduce costs, especially when rolling out in underserved areas. As for competition, MVNOs could be a way to increase competition, meaning that the MVNOs would concentrate on marketing and consumer acquisition as long as they already have an existing base and distribution channel.

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BIOThecla MbongueSenior Analyst, Middle East & Africa, Ovum

Thecla Mbongue is a senior research analyst in Ovum’s

Middle East and Africa team and has a key focus on

telecoms, media, and technology (TMT) in sub-Saharan

Africa. Her research interests cover operators’ strategies

as well as network and regulatory development,

including mobile broadband technologies deployments,

smartphones and data tra"c uptake, and mobile

!nancial services usage.

Thecla is a regular speaker and chair at industry conferences

in the region and regularly comments on industry

developments for regional and international media.

Thecla joined Informa in 2003 (research unit rebranded

into Ovum in 2014). In her previous roles, she worked in

England as a marketing assistant with global telecoms

carrier Vectone.


Tim Guest

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.

Tim Guest, Freelance Communications and Business Writer

It’s an unfair world when it comes to the ‘haves’ and ‘have-nots’ of mobile communications. There are rural and remote 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.

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Last Mile Rural Connectivity - Moving Beyond Traditional Network Infrastructure


While remote populations - together with remote enterprise operations, such as mining and oil & gas exploration - often remain underserved and unconnected by e!ective communications, they are no longer seen as service-delivery challenges for MNOs and regional governments. They now constitute serious revenue-generating opportunities for many stakeholders. The good news is that pioneering technologies are now available and operationally proven to deliver advanced voice and broadband services needed to generate viable pro#t margins for the service providers and MNOs in almost any isolated region.

One solution among a growing !eld

One such solution is provided by Omoco, which primarily caters to the civil rural & remote space and whose parent company, Vihaan Networks Limited (VNL) has been pioneering remote wireless communications solutions for many years. Omoco’s family of network-in-a-box solutions are already proven in remote civil deployments in a number of regions, and o!er remote communities and enterprises scalable, deploy-it-yourself systems that enable users to get connected with minimum e!ort, wherever they are.

The company says its small cell solutions, which cost a fraction of a macro cell deployment, are ideal for situations where subscriber base is typically very low, and that they can support populations of as few as 300 people or upwards of thousands, with each deployment presenting a viable proposition for the operator or customer/owner. Because remote areas are often o!-grid with little or no electricity supply, Omoco solutions, with battery back-up, have the 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

The masts used to support the solutions do not require complex logistics to transport and erect and are only 15 to 30 metres tall, depending on the topography and coverage required. In some cases, when tall structures or elevations are naturally available, towers may not even be needed to support the remote network equipment.

Talking to Developing Telecoms, Ms Bhawana Daga, Head of Marketing and Communications for Omoco, told DT that Omoco is essentially one product with di!erent variants and many applications. “Our target customers,” she said, “are the people who would install our system, such as VSAT, VOIP operators, ISPs, as well as aspiring entrepreneurs who wish to set up a community network and earn subscriber revenue. The end user, on the other hand, is anyone who will bene#t from using the network solution, such as villagers in rural and remote communities, or, in the case of our remote enterprise solution, users such as oil exploration and mining company personnel.”

Ms Daga added that the company’s customisable and scalable systems are also suited for customers such as hospital owners, hotels, o"ce complexes and building owners, with end users being the people working inside these establishments. “Di!erent variants of our system can o!er enhanced coverage and capacity,” she said. In a typical rural deployment scenario, one variant o!ers a stand-alone network-in-a-box for communication only within the remote area providing coverage to ranges of about 5km radius – typically one village or a group of villages. Such a deployment can be scaled up to provide connectivity with the wider mobile core network through a regional MNO.

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Omoco has a variant that is ideally suited for deployment in disaster relief scenarios to provide rapid local area coverage for NGOs, emergency #rst responders, and search & rescue teams who deploy to areas following the likes of an earthquake, when regional telecommunications are down and an easily deployable mobile network is required.

Overcoming CAPEX and OPEX challenges

There are a range of players, including satellite and large mobile infrastructure companies, optimising and deploying new remote wireless solutions around the world. Some use architecture that switches all local calls locally at the community base transceiver station (BTS), reducing costs associated with switching back through the core network. This also has the e!ect of minimising the delay experienced on non-local switching thereby improving the QoS.

Some of these remote community systems rely on VSAT satellite backhaul to the core network and have adopted an intelligent use of power and transmission so that resources

are only being used when communications are taking place. This restricts the use of high-cost satellite bandwidth and also keeps power usage to a minimum, particularly during o!-peak hours. Some use alternative energy sources such as solar and wind power doing away with the challenges of using and maintaining diesel generators.

These new technologies have enabled operators to overcome the capex and opex challenges indicated; their architecture has removed the need to outlay on capital and physical transportation costs for standard tower infrastructure, as well as costs associated with diesel to power o!-grid, fuel-hungry base stations. The high cost of satellite backhaul transmission has also been removed in the case of some of these new remote community communications technologies.

So, when an isolated community has been unconnected for its whole existence, or an enterprise operating in a remote location simply needs to begin by communicating within its own immediate area, a simple, easy-to-install system that can be easily scaled up later on to provide total connectivity is an ideal start-point.

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A !nal word

When the deployment of a traditional BTS can cost as much 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 and opex deployments mean that more stakeholders than ever before can get involved. From system integrators and VOIP operators, VSAT operators and ISPs – and not simply 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.”

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BIO Tim Guest, Freelance Writer

Tim Guest is a freelance communications and business

writer and journalist specialising in communications and

electronics.

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:

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

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 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.

Stefan Stanislawski - Ventura Next AB

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

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Dynamic Open Access Fibre Networks – the Swedish Model

Open access #bre networks #rst evolved in Sweden

immediately following the burst of the “telecom bubble”

in 2000. Over 15 years several models have emerged,

tried and abandoned as unworkable either technically or

economically. The one that has survived has been re#ned

and currently about 25% of all Swedish households are

connected to dynamic open access #bre networks where

they can freely choose between all the major, and many

smaller, brands and a plethora of services. With one

exception, these networks are all active sharing and use the

powerful and future-proof active Ethernet con#guration.

The exception is the publicly owned city of Stockholm

network (Stokab) that deploy a passive sharing model,

i.e. allows service providers to connect directly to its dark

#bre. This model is made possible as the city will not let

anyone, except the incumbent, deploy #bre in the city and

that the Stockholm market is exceptional in terms of the

concentration of Government entities and large businesses

where the passive sharing model can be economical.

On the other hand for #bre networks covering less than 100,000 households, the active sharing model is the more economic one. Active sharing also lowers the barriers to entry for the smaller service providers, who do not need to invest in their own equipment but can market and sell their services to a reasonably large universe. In fact, the dynamic open access model is designed to be particularly suitable for the smaller service providers. This is important as the larger brands, who by tradition are used to vertically integrated or closed networks are initially often sceptical to open access model meaning the #rst movers in this sector are often the smaller service providers. However, as the larger brands get comfortable with the dynamic open access model they are often quick to join.

For independent #bre owners, such as local Governments, energy companies, real-estate owners, developers or private investors, the dynamic open access model is the model that has shown to achieve the highest penetration (consumers and business actually taking service over the #bre in relation to those who are passed by #bre infrastructure) and achieve this quickly. Experience from Sweden and elsewhere show penetration levels in the mid to high 70-ies per cent after 18-24 months, depending on competition from modern coax

systems enables with Docsys3.


BIOStefan StanislawskiCo-Founder, Ventura Next AB

With over 25 years helping boards, senior managers

and regulators to make critical decisions in both !xed

and mobile telecoms, Stefan’s work has encompassed

all aspects of telecommunications strategy, business

development and litigation as well as participating in some

$100 billion worth of telecom !nancings or acquisitions.

Stefan continues to have an operational role in

broadband – he has a part time commercial and

!nancial role with the same team to take the open access

network management elements of the operation global

– delivering the !rst Gigabit service for subscribers in the

whole of Africa (passive layer owned by Vumatel) as well

as projects in Europe and South America.

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.

Fibre for the Mass Market?

The current investment in #bre is going into upper and

middle class homes and businesses areas. This is where

the immediate need is greatest and the economics most

favourable. For South Africa the estimates commonly

bandied around are for 1.5 to 2 million potential connections.

If we think only on terms of mainstream operators with

larger scale institutional funding, then this seems reasonable.

However, in many countries in the past, low GDP per capita

had not hindered the growth of CATV or FTTH networks.

Particularly in the case of traditional CATV, the technology

was simple enough that local entrepreneurs could build

ultra-local networks that worked. Across Asia and parts

of Europe hundreds if not thousands of local networks

emerged often with little legal documentation. Over time

these were bought up and professionalised into larger

operators. My belief is that the same could easily happen

with #bre over the next decade. These are exciting times!

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Tolulope Williams - 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.

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

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

My team is responsible for planning and optimizing the 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.

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Connecting Africa: Last Mile from the operator’s perspective


Is that an issue that could be addressed by more specific regulation?

Regulation can address that; we’re also looking into alternatives to microwave, such as increasing #bre penetration. We’re trying to increase the ratio of sites of #bre on a yearly basis, but deploying it involves other major challenges. For example, getting right of way – with multiple government agencies controlling the same domain, gaining the right of way to put #bre into the ground is very expensive, with the government collecting a huge amount of money. In a developing country like Nigeria, there is a lot of road construction going on, and this impacts on the deployment of #bre infrastructure – there’s no protection for it. The regulator is trying to make #bre infrastructure important and push this with the government but we’re not yet there – a lot of road construction companies, especially the smaller ones, don’t abide by the rules and won’t hesitate to just break or destroy #bre infrastructure. There are warnings in place, there are speci#c ways to work around it but combating this attitude is really a major challenge. We do want to use #bre to reduce the reliance on microwave but it does have its problems.

One of the challenges you have is that everyone who wants to deploy #bre, in 90% of the country you need to put in your own infrastructure in terms of docks on the road; there are only a few places where they build routes but also put in docked infrastructure. A lot of things can help; if road construction is standardised such that every road comes with docks then it makes it much easier to put in #bre as it eliminates the need to dig into the ground. However, what happens today is that provision of docks is not prioritised by the government, but this would be extremely helpful if this infrastructure was included as part of the road build-out; telecos would be able to come in and install #bre into the docks. You’d also have more assurance that docks provided by the government wouldn’t be as easily damaged compared to an operator’s bespoke infrastructure.

With cost such a prohibitive fac tor to widespread f ibre deployment, what technical edge does it of fer over microwave?

There’s really a limit to the amount of capacity you get on microwave, and now the regulator is trying to open up new spectrums like E-band. Nigeria is a high-rain region, and the higher the frequency, the greater the rain impact. With new broadband technologies like LTE and LTE-A, the capacity to the cell site is increasing. There is really a limit to what you can do on microwave; after a certain point, you need to be taking #bre to nearly 80% of your sites if you want to o!er e!ective broadband. The main reason we are pushing #bre is to be able to provide the capacity.

Capacity is particularly an issue in densely populated urban areas. What are you doing to address network congestion in these areas?

We are undertaking network modernisation to enable us better use of the frequency by modifying the topology of the network; by creating more microwave hub sites that we can take #bre to, the existing hub sites are decongested. One of the problems of frequency interference is having too many leads in a particular tower; this is usually the case in hub sites. We are creating a lot of new hub sites as part of our network redesign and modernisation; if we can redirect the leads to these sites and reduce the average number of physical microwave leads that go to any individual site, that helps with the frequency management.

We are also introducing Class 4 microwave antennas, which have better radiation characteristics for combating interference. This means that you can re-use frequency a lot more; they’re slightly more expensive than Class 3 microwave antenna systems but they have that advantage.

With some of our hub sites we’re going from over 30 links to a maximum of 10 physical links, which means we have hubs going from supporting over 100 sites to supporting a

26


maximum of 30 sites. By redesigning the network, creating more hub sites, and reducing the number of links that come to a particular microwave tower, we make better use of the frequency and reduce interference. However, to do this, we need to be able to get #bre to our sites, and once we’ve done this we can start looking at how we can get last mile #bre-to-tower.

How does the network’s topology affect deployment?

When we talk about ‘$at’ networks with regard to microwave; you cluster your network and have various hub sites, and sites simply go to the closest hub site. In the existing network, you have microwaves links crossing each other, but in a $at network they’re not $ying over each other, they’re just grouped into clusters and they don’t criss-cross. This is what we mean by a $at network in terms of microwave.

Does this make it more cost-e#ective to provide rural coverage?

With remote areas, from the business point of view, the question is how much revenue you actually make from these locations. Because of the cost of actually building out microwave to such remote locations, we try to use satellite as well. This comes with its own associated costs.

A lot of people come to us with di!erent satellite solutions, ones that allow us to minimise how much space segment we have to buy from the satellite operator. We do have these kind of networks at MTN but only a very few compared to our physical sites, of which we have over 13,000; our rural telephony network is less than 300 sites. In a lot of countries, it’s actually the government that drives the broadband initiative to rural areas; operators need a lot of incentives in order to begin o!ering services. If you’re going into a rural area, you’re not going to make money – however, governments know that broadband is an engine of economic development, so they need to incentivise rural broadband deployments by helping operators reduce the cost of doing this.

If operators are deterred by the cost of deployment, what’s the incentive to deploy to these regions?

First and foremost, any operator needs to make money as a company, but in trying to support the government with some of their broadband initiatives for rural areas, the major solution right now is satellite. There are initiatives on the horizon to encourage rural deployment, and they are expected to involve the government giving out contracts to operators to provide coverage, but thus far they are not widespread.

What are the other challenges in connecting remote areas?

One of the major challenges is intense competition – telecom services have been commoditised, leading to intense price wars in some markets, including Nigeria. There’s a huge shift from voice towards data, and although this requires a lot of CAPEX investment it doesn’t provide the corresponding revenue. There’s been a lot of price erosion due to the competition, with operators cutting prices to unsustainable lows. Couple this with economic instability – in Nigeria, the exchange rate is going up and this a!ects our ability to import equipment – and it’s clear that operators are beginning to feel the heat. The cost of phones is very high, but operator revenue is way down so the prices are just not sustainable. If things don’t improve, providers are going to need to agree to increase prices, because if things continue at this rate then we’ll see operators folding soon enough.

How are operators going to be able to compete in such an environment?

If your revenue is declining, you need to start looking at reducing your operational cost. There are a lot of initiatives around reducing OPEX – it’s not just about reducing the number of sites, it’s now about trying to generate revenue from these sites. Obviously operators have to spend money on their sites, so they’re looking at the impact of this on their revenue and trying to work out how they can get sites generating income rather than draining it. If it’s not going

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to be a coverage issue, they’re shutting the sites down; it’s a matter of business optimisation in the name of cost reduction.

MTN has done a lot of outsourcing in order to optimise costs; we’re looking at models of tower-leasing wherein another #rm handles the construction of towers. In the area of #bre deployment, we’re looking at similar possibilities of leasing; this is common in South Africa but not the rest of the continent. However, in a couple of years it is likely to be more of a trend, particularly as the Nigerian regulator is encouraging the model of infrastructure providers.

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BIOTolulope Williams, Senior Manager Access, Transmission,

Planning & Optimisation, 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. 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.


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

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

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

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