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“Green Power for Mobile” Initiative – Good News for Off-Grid Telecom 29 Sep, 2008

GSMA’s latest initiative pushes for the use of renewable energy sources for mobile networks.

The target is to have 100,000+ off-grid base stations deployed by 2012. As a regular reader of the VNL blog, you should be quite familiar with the large power and fuel challenge that mobile operators face.

Energy prices are soaring, while ARPU’s are dropping. The solution to these issues is to focus on energy efficiency and renewable energy sources.

With this in mind, GSMA’s effort is both very timely and highly relevant. The explosive growth in the mobile industry must be managed responsibly to avoid an enormous negative environmental impact. Especially in countries like India where more than 9 million new users are added every month and base stations are being deployed quicker than suppliers of diesel generators can deliver. In May this year, Bharti Airtel (one of the largest mobile operators in India), claimed they were adding almost 3,000 new base station sites every month.

Pushing for the usage of renewable energy sources for mobile networks not only has the potential of reducing air pollution and mobile operators’ operating costs – because of the huge scale of the mobile industry, it can impact the whole renewable energy field; providing a live testing ground for new innovations in solar and wind power.

We applaud GSMA’s initiative. But beyond their project’s focus on renewable energy is a required re-thinking of mobile infrastructure technology – the area where VNL is singularly focused.

The next billion mobile users will come from rural areas, and to roll out mobile networks here is a unique challenge. It’s not only about using solar or wind power. And it won’t do to simply attach a large solar array to existing mobile infrastructure, since the energy requirement and cost per site simply prevents the solution from scaling. And the idea of burning a matter – be it diesel or cooking oil, or a mixture of both – to extract power is not sustainable in the long run. We’ve earlier argued against biofuels, and remain firm in our stance.

Off grid telecom, or “microtelecom” in VNL lingo, consists of four key ingredients:

  1. Low power (no more than a lightbulb, which makes solar power viable)
  2. Low cost (no more than a simple tractor, per site)
  3. Dead simple installation (so local labourers can do the job)
  4. A business model that scales

With WorldGSM™ – VNL’s solar powered GSM system – all these ingredients are present. The combination allows mobile operators to finally provide mobile services to rural areas.

Profitably so. And responsibly so.

Further reading:

Telesemana.com: “Infraestructura Para Zonas Rurales: Realmente sin Cables” 24 Sep, 2008

VNL has launched a GSM system that enables operators to offer profitable services in remote areas, where the CAPEX and OPEX of the traditional infrastructure makes no economic sense. Its Board Member, Anil Raj, tells us how operators can add benefits to their networks in rural areas where the ARPU is no more than two dollars.”

Full article below, in Spanish (from www.telesemana.com):

La empresa VNL ha lanzado al mercado una infraestructura GSM que permite a los operadores ofrecer servicios rentables en zonas aisladas, donde el CAPEX y OPEX de la infraestructura tradicional no tiene sentido económico. Su CEO, Anil Raj, nos cuenta cómo los operadores pueden sacar rendimiento a su red en zonas rurales donde el ARPU no sea de más de dos dólares.

¿Cuál es la historia de VNL?

La industria móvil ha perseguido la banda ancha y los dispositivos avanzados para los mercados desarrollados. Pero en mercados emergentes esto no es relevante, ya que para aquellos que sólo pueden gastar dos dólares al mes en servicio celular, el iPhone es una mera curiosidad porque nunca lo podrán obtener y nunca podrán acceder a YouTube. Por el momento los operadores no se han interesado por este mercado, a pesar de que hay millones de personas en él. La razón por la cual los operadores no se han interesado es porque es muy difícil generar dinero en estos mercados. Y esto es lo que nos impulsó a actuar y aceptar el reto de hacer que ese mercado sea provechoso.

Estamos hablando de ofrecer servicios baratos de voz –a veces ni siquiera SMS, pues hay gente que en estas zonas no sabe leer- en mercados emergentes con zonas rurales donde no existe prácticamente ningún tipo de infraestructura. Es posible que en el futuro se pueda ofrecer GPRS. Pero por el momento, nuestro foco es poder ofrecer un servicio de voz barato, confiable y que le permita al operador generar ingresos mediante una infraestructura con un OPEX cero.

Somos una empresa “verde” por accidente, ya que no teníamos la intención deliberada de ser amigables con el medio ambiente. Sin embargo, decidimos que todo debía funcionar mediante energía solar. Al usar esta fuente debimos centrarnos en cómo reducir el consumo, algo a lo cual la industria no había prestado atención porque no era necesario, ya que la prioridad era incrementar la capacidad de voz y datos.

Así, pues, diseñamos toda una red, o parte de una red (transmisión, switches, base station controllers, base station), con un OPEX cero, de forma que los operadores puedan ofrecer servicios y obtener beneficios en mercados con ARPU muy bajo.

Con una parte de la red con cero OPEX se resuelve parte del problema. ¿Qué pasa con los terminales?

En india se puede comprar un buen dispositivo Nokia por 15 dólares. Por lo que los dispositivos están dentro del rango de precios que pueden absorber los mercados a los que apuntamos. El problema es que la infraestructura no ha sido diseñada para este tipo de ambientes, y nosotros hemos creado una parte de la red que es complementaria con la infraestructura tradicional que utilizan los operadores.

La energía solar tiene ciertos inconvenientes, como por ejemplo, el almacenar la energía que va adquiriendo. ¿Cómo resuelven los principales inconvenientes relacionados con la energía solar?

La energía solar tiene muchas limitaciones. Primero, es muy cara, si se mide en dólares por vatio en relación a otras alternativas. Sin embargo, el precio está disminuyendo dramáticamente, ya que vemos que cae en un 20 por ciento de un año a otro debido a la cantidad de empresas que están dedicándose a su desarrollo. Además se necesita que haya sol, por lo que todos los sistemas llevan un componente híbrido con baterías que se van cargando con el propio sol. Creamos la infraestructura para que pueda funcionar en la oscuridad durante 72 horas antes de que el servicio se empiece a degradar.

Nuestro sistema está pensando para mercados que están cerca del ecuador, por lo que podría funcionar bien en Centroamérica o algunas zonas de Brasil. En Asia, por ejemplo, tenemos el Monzón, donde llueve todo el tiempo durante un mes y se recibe muy poca energía solar. Nuestra infraestructura es capaz de aprovechar incluso las condiciones más extremas, para que el sitio pueda funcionar durante un mes completo en estas circunstancias. Si el Monzón se alarga más de un mes, se puede enviar un operario con un recargador, para que pueda funcionar durante un mes adicional.

Las conexiones satelitales suelen ser bastante caras. ¿Cómo resuelven los costes del transporte?

Típicamente, en una zona rural en Asia –y seguramente es parecido en Latinoamérica- los usuarios suelen utilizar el servicio para realizar llamadas dentro de su comunidad o con aldeas próximas. Para no utilizar sistemas satelitales, la infraestructura cuenta con enrutamiento local. También tenemos nuestro propio sistema de microondas que, por supuesto, también utiliza energía solar. Conectamos todas las aldeas con nuestra infraestructura de microondas, y en una de las aldeas instalamos un MSC para hacer el enrutamiento local entre aldeas, enviando sólo a través del link satelital la información básica para poder facturar. Si por algún motivo se pierde la conexión satelital, la infraestructura sigue operando, guardando todos los datos de las llamadas cursadas. Una vez el link se ha restablecido, toda la información se envía para poder realizar la facturación de todo el tráfico que se produjo mientras el link satelital se encontraba fuera de servicio.

La Asociación GSM (GSMA) ha lanzado el programa Green Telecom for Mobile Program ¿qué reacción tuvo al escuchar esta noticia?

Nos habría gustado que esta iniciativa hubiese sido propuesta mucho antes. Tenemos muchas discusiones con GSMA y seremos parte de ese programa. Pero hay que ser realistas, no porque se lleve a cabo un programa que fomente el “verde”, va a ser de interés para los operadores. Mi impresión es que está habiendo una tendencia errónea a instalar una estación base convencional y conectarla a paneles solares, y esto no es correcto ni soluciona el problema para las zonas remotas. El trabajo difícil es crear infraestructura que utilice poca energía, pero sustituir un generador diesel por un panel solar es un experimento interesante aunque que nunca generará dinero y, por lo tanto, no será atractivo para los operadores.

¿Están pensando asociarse con alguno de los grandes proveedores para incrementar su credibilidad en el mercado?

No tenemos ningún plan de llegar a acuerdos con los grandes proveedores porque no vemos qué valor podría tener este tipo de asociación para el operador. Nuestra red es complementaria con la de las grandes marcas e intenta servir a un mercado donde éstas no llegan. Somos una empresa pequeña y debemos tener cuidado con los compromisos, siendo prudentes para poder cumplir con las promesas que les hacemos a los operadores. No tenemos el lujo de poder venderles a todos los operadores debido a nuestros recursos. En América latina iniciaríamos por mercados pequeños, porque no somos una gran firma.

¿Han pensado en crear infraestructura para CDMA450 MHz, que está siendo utilizada en Latinoamérica en zonas rurales?

El problema es que no hay dispositivos baratos en CDMA450 MHz. La tecnología tiene una importante series de ventajas debido al espectro en el que opera, sin embargo, el problema con las zonas rurales no es cobertura, sino capacidad de poder ofrecer servicio a una gran cantidad de personas debido a la falta de un ecosistema de terminales. Lo que se necesita en zonas rurales son estaciones base baratas. Si hay una aldea con 100 habitantes, podemos instalar una estación base, mientras que con CDMA450 MHz se intentaría cubrir varias de estas aldeas con una estación base situada en un punto que las cubra a todas.

Mencionaste que si entrabais en Latinoamérica lo haríais en mercados pequeños ¿alguna idea de por cuáles podríais empezar?

Por volumen y similitudes con India, sería Brasil, porque podríamos copiar y pegar cosas que hemos aprendido en Asia. Sin embargo, es un mercado complicado. Pienso que podrían ser mercados pequeños donde podamos aprender. Hemos recibido interés de Nicaragua, pero pienso que en el próximo año nos centraremos en un mercado pequeño y de ahí veremos que pasa.

Read the article at www.telesemana.com ››

Eradicating Illiteracy and Innumeracy with Mobile Education

Very few advertisements have the knack of making an impact. For me, the Idea mobile ad (of educating rural children) is truly admirable for the social message it echoes.

While in urban India, cellphones are used for catching up with friends, closing business deals and connecting with our near and dear ones. In the rural scenario, mobile phones hold the potential of revolutionizing education.

In a country where the IT and telecom sectors are booming, the average literacy rate is 65%. Is there any way in which these profit-churning sectors are positively affecting the literacy levels?

Distance education is a familiar term for anyone who has pursued their degrees over the internet from a university based out of another state or country. So what is stopping us from localizing the concept of ‘distant learning’ to the grassroot level?

Limited funding and weak infrastructure are two of the major deterrents to the growth of literacy level in rural India. Education is secondary, as schools are not always located in close vicinity, and family obligations and chores dominate the lives of rural communities (including children). Yet, education can touch the lives of those who wish to learn; technology and telecom have already joined hands to make a difference to the lives of the rural youth.

The Lifeline for Education program managed by One World aims to provide academic support to teachers in rural schools in India - using accessible communication mediums like mobile phones. The system uses simple communication protocols to facilitate education in remote regions of the country. The program is servicing 13 panchayats, 164 villages, and 571 schools (as of March 2008) in the Monteswar Block in the Bardhaman district of West Bengal.

Another alternative is for teachers, volunteers and organizations to take the onus of adopting a village and ensuring that they make a difference to the literacy rates in these areas. For example, The Times of India’s ‘Teach India’ campaign created a positive wave in urban India and saw volunteers from every walk of life come together and make a difference to the way that knowledge is shared. It is time to replicate this model in rural India and use mobile phones as a medium to reach lives untouched by the gift of education.

Research company Global Equities has projected that education could amount for 20-25% of iPhone sales in the next few years. No doubt India has a long way to go, but if the public, the corporates and the government collaborate, it is definitely a good time to start the journey.

Nobel Prize-winning economist Amartya Sen sums up the need for education in ten words: “Illiteracy and innumeracy are a greater threat to humanity than terrorism.”

Further reading:

GSMA Mobile Briefing: “Green with Envy? Base Station Minnows Take on Big Guns” 12 Sep, 2008

By Justin Springham, GSMA’s Mobile Business Briefing Newsletter
12 September, 2008

The mobile industry’s base station equipment sector is not always associated with young, aspiring companies driving development into new growth areas. Dominated by the likes of Ericsson, Nokia Siemens Networks and Alcatel-Lucent, as well as, in recent times, Chinese equipment vendors Huawei and ZTE, this is a multi-billion dollar market led by a number of high-profile players and primarily focused on delivering technology to support advanced mobile services.

But the phenomenal growth rate of mobile network deployments around the world is paving the way for smaller players to potentially grab a valuable slice of action in an emerging new area.

The mobile industry today serves a staggering 3.2 billion subscribers, almost half the world’s population. More than 90 percent of the roughly 2 billion new subscribers expected to join this community over the next few years will come from emerging markets. According to Unstrung Insider, extending service to the next two billion subscribers will require between 1.5 million and 2 million new base stations, more than half of them located in areas without access to electric grids. And with that comes a huge opportunity for pioneering companies working on a range of alternative ‘green’ energies that can be harnessed to power off-grid radio sites at a fraction of the running cost of diesel-powered generators.

“There is enormous demand in the developing world for alternatively-powered base stations,” believes Dawn Haig-Thomas, Director of the GSMA Development Fund. “There are some 1.6 billion people living off the electricity grid and a further billion living in areas in which the grid power supply is inconsistent. Areas lacking grid power supply today are typically also areas lacking mobile coverage. Operators are desperately seeking cost-effective power solutions that will enable them to extend their networks into these remote areas. With diesel prices making generator solutions less attractive, the focus is now on wind and solar power.”

It’s therefore no surprise that the major base station equipment vendors all currently offer at least one alternative energy-powered solution each, such as solar, wind or biofuels. Ericsson and Alcatel-Lucent have separately installed about 400 solar-powered base stations throughout Africa and Asia. A recent Wall Street Journal report claimed that Alcatel-Lucent’s solar base station requires about 750 watts to run, while Ericsson’s solar base station needs about 600 watts (compared to as much as several thousand watts for ‘traditional’ GSM base stations). Both sets of vendor equipment reportedly require technical staff to install them over a course of weeks. In India, IDEA Cellular has also installed around 350 base stations that run on biodiesel, produced from waste vegetable oil, a deployment which began as a pilot in conjunction with Ericsson and the GSMA Development Fund.

Despite these high-profile developments, a small set of vendors focused on the production of alternatively-powered base stations are attracting industry interest. Last month saw the launch of VNL, a Swedish-Indian startup that claims to have spent the past four years developing a simplified GSM base station powered by solar panels and requiring much less power than similar offerings from its larger rivals. VNL says its WorldGSM base station can be installed in rural areas with little professional training and requires up to only 120 watts to run; about the same as a light bulb. The base station costs US$3,500, compared to the US$40,000-US$100,000 price of a traditional electricity-powered GSM base station.

Of course, launching a product - no matter how impressive - and generating commercial success are two different matters, especially for a little-known startup, but VNL isn’t short on confidence as it prepares to take on its heavy-hitting competitors. “We probably have the most sophisticated technology of all vendors,” Board Member Anil Raj told me prior to the company’s official launch. To date the company has signed up Indian infrastructure provider QTIL for trials, and claims that agreements with several ‘prominent’ operators have been reached and are in the process of being finalised.

Meanwhile Sweden-based Flexenclosure touts its E-site product as “the flexible and green base station solution for the global telecom industry.” Already a winner of the 2008 GSMA Mobile Innovation Global Awards, E-site is making a name for itself by claiming to enable operators to cut their operating costs by at least 50% and providing break-even for its customers in 15-18 months. Specifically designed for off-grid locations, Flexenclosure claims E-site can support 3G networks as well as 2G GSM.

Elsewhere, Winafrique is establishing itself as a provider of efficient and sustainable alternative energy solutions for East and Central Africa. Located in Kenya, Winafrique claims to have completed a total of 21 sites powered by wind and solar, including many for regional mobile operator Safaricom, and says it has cut operator costs by up to 70%. And UK-based PowerOasis is another contender, holding claim to a number of successful deployments of renewable power at base stations in both the UK and Africa.

Such companies are demonstrating their potential in what is already a huge market. ABI Research recently reported that the number of off-grid solutions is “extremely high” in Africa (45 percent) and some parts of the Middle East (25%). It noted there are also some relatively high levels of off-grid mobile sites in Asia Pacific (15%).

And it could just be that green power for mobile networks becomes a truly global opportunity for the emerging talents of VNL, Flexenclosure and others. “We expect to see the greatest innovation coming out of Africa and Asia, where the need is currently most acute, which in turn will be adopted by Europe and North America,” says the Development Fund’s Haig-Thomas.

Download the article as PDF ››

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VNL Shortlisted for Prestigious International Telecom Award 4 Sep, 2008

VNL’s WorldGSM solar-powered GSM system has been shortlisted in the “Best Technology Foresight” category of the World Communications Awards (WCA).

Organised by the international magazine Total Telecom and sponsored by Ovum, these annual awards are recognised throughout the communications industry. Last year’s winners included Bharti Airtel, NTT Communications and the BT Group.

The “Best Technology Foresight” award is for the individual or organisation that is considered to have shown the greatest foresight in developing or fostering the development of a technology used or able to be used in delivering or receiving communications services via carrier networks.

This year’s independent panel of judges include Robert Millington - Head of Telecoms Strategy at Grupo Santander, Anil Prakash - Secretary General of the ITU-APT Foundation of India and Michael Bartholomew – Director of the European Telecommunications Network Operators’ Association (ETNO).

The awards will be presented at a ceremony in London on 26 November.

For more details visit: www.terrapinn.com ››

Surviving Competition – Regional Mobile Operators Strategize

The evident demand for mobile phones in India has created a very interesting business and entrepreneurial opportunity for the nation’s retailers – setting up mobile stores.

With the call rates and handset prices declining day by day, the mobile retail sector is creating a ripple in the Indian market. There are two segments fighting for space in this sector – retail stores backed by known corporates, and the traditional shops that rule regional India. Who will win this tussle?

“Business opportunities are like buses, there’s always another one coming”

–Richard Branson

Clearly, the advantage that regional players have is that of location; set up in the interiors of the country, these mobile retailers are able to reach the untapped target audience. More importantly, they are able to understand the psyche of their consumers, who usually come from the same geographical location. Price is also an advantage for retailers such as UniverCell, Sangeetha and Global Access, because their relatively small size allows them to change prices within two hours of the market price change; bigger stores, however, take 2-3 days to solve the issue.

In this scenario, the competition being generated by corporate-backed mobile retailers has come as a surprise to the regional players. Retail outlets such as The MobileStore (Essar and Virgin), HotSpot, Subhiksha and Mobile NXT are setting up shops countrywide. While some like HotSpot have tied up with neighbourhood stores as their franchisees, others like The MobileStore have stuck to investing in their exclusive outlets.

In a country like India, where more than 70% of the mobile retail sector is unorganized, the franchisee model seems to spell the way ahead.

As mobile penetration continues to grow in the Indian subcontinent, mobile retailers – organized & unorganized – are fighting for their share of the pie in the urban, semi-urban and rural parts of the country.

What remains to be seen is whether the struggle between the regional mobile retailers and the national mobile retailers will continue, or if they’ll come together to fulfill the demand of the next billion mobile users.

Further reading: