The Opportunity for Mobile Operators

As developed mobile markets all over the world approach saturation, the industry has begun to consider “the next billion” users. These are the rural populations living beyond the reach of traditional communications networks of any kind.

Rural India is a prime example of the opportunity:

  • A huge population — 720 million people in 630,000 villages across 3.2 million square miles.
  • A massive economy — over 50% of India’s total GDP. There are almost same number of middle to high income households in rural areas (21.16 mn) as urban India (23.22 mn).
  • A booming economy — with the consumer durables market, for example, growing at 25% per year (vs 10% nationally).
  • A parallel economy — with the same needs as developed markets but a reduced ability to pay for them.

The rural consumer in India cannot pay the $50 per month typical of London, Tokyo and Sydney. Nor can they pay the $7-10 per month typical of Delhi and Mumbai. But research and experience shows that they can and will pay around $3 per month today — even before the impact of communications increases their ability to pay.

The challenge is to deliver a mobile service to rural users that can not only be viable, but be profitable at these low levels of Average Revenue Per User (ARPU).

“India, not China, will be the greatest contributor to the ‘next billion’ mobile users, adding 294m subscriptions between year-end 2006 and year-end 2010.”

- Pyramid Research
The Next Billion: How Emerging Markets are Shaping the Mobile Industry, Oct 07

The challenges of rural India

There are four main difficulties in serving rural India, each one of which has appeared insurmountable:

  • Power challenges — Most of rural India is not served by the power grid. Some areas may get ‘agricultural power’ – two hours in the morning and evening – but even this is the exception. When fuel can be afforded and delivered, power tends to come from diesel generators. The combination of poor fuel quality and poor generator maintenance limits the life of any generator to around two years.
  • Revenue challenges — Rural India can pay for mobile services, but only around $3 per month. The cost base of any solution has to be geared to these ARPU levels.
  • Skills challenges — There are no trained telecom engineers and few people can read or write. This makes the installation and maintenance of GSM networks highly challenging.
  • Access challenges — These are extremely remote communities, served by poor roads and no other significant infrastructure.

Despite these challenges, other complex services have profitably been delivered to rural India (including cable television).

Unfortunately, the GSM system in use all over the world today seems to have been designed to maximise vulnerability to these four challenges.

Today’s GSM is not ready to serve rural India.

“The cost of passive infrastructure is enormous and telecom companies should consider the infrastructural challenges in the rural areas.”

- Sanjeev Aga, Chairman
CII National Committee on Telecom and Broadband

The Solution: WorldGSM™

WorldGSM™ is a new approach to delivering profitable mobile services to rural India and beyond. It’s a complement to existing GSM networks, extending them to seize the rural opportunity. It is:

  • Low-power — at just 100W per station, the entire system can be run on solar power. No grid or generator necessary.
  • Low cost — a fraction of the cost of traditional GSM base stations; profitable at very low densities and ARPUs.
  • GSM compliant — so it can easily link to existing GSM networks, dramatically extending their reach.
  • Self-deploying — a entire Base Station packs flat into two bullock carts and is easily installed by unskilled field staff who may not be able to read or write. No buildings, power, air conditioning or radio planning. Just point it South and turn it on.
  • Near-Zero Maintenance — pour water in the battery every three months; update software and perform simple swap repairs if needed.
  • Cascading Star Architecture™ — a unique, modular architecture optimised for low-cost rural expansion; with local switching to minimise backhaul.

While the major equipment vendors focus on the latest services for developed, urban markets, VNL has quietly re-engineered “vanilla” GSM to make it fit for a whole new purpose.

WorldGSM™ is the first fully-fledged mobile infrastructure that’s completely independent of the power grid.

Driving down the threshold of viability

Driving down the threshold of viability to the $3 ARPU level requires an order of magnitude cost reduction.

Learn more about…

Bringing Telecom to Rural India
(White Paper, PDF, 2 MB)

Rural Deployments »
How to deliver profitable mobile services to rural India and beyond…

Services »
From market sizing to network maintenance…

Related documents

Bringing Telecom to Rural India
(White Paper, PDF, 2 MB)

Facts & figures