Mobile operators demand that the Indian government maintains diesel subsidies, underlining that telecom is a public utility and higher fuel costs impacts the consumers.
Business Line reports that “Cellular Operators Association of India and the Association of Unified Telecom Service Providers of India are planning to approach the Government seeking a total exemption or only a marginal increase in diesel price…”
Why? Because power costs are astronomically high; “…cellular operators spend nearly 35 per cent of their operational expenditure on procuring diesel for running generator sets that power their base stations”.
Since mobile infrastructure equipment has high power demands, it is impossible to deploy it without power support in areas where electricity is scarce. This means diesel generators are so far the only solution to provide coverage.
The need for diesel generators holds true for both urban and rural areas – multiple daily power cuts are commonplace in Indian metros, and basically all sites are equipped with generators that run several hours every day. In fact, it’s not uncommon for these generators to run 24/7/365, since shutting down and powering up a generator wears more (and costs more) than leaving it running.
So, while providing mobile coverage to everyone is a top priority, and telecom is truly a public utility, is the solution really to deploy more traditional, power-hungry mobile infrastructure?
From the article:
“…Some companies even deploy helicopters to transport diesel to remote places in order to keep the mobile networks running.”
Clearly, this is not a sustainable practice. And besides the high cost of fossil fuel, the environmental impact is enormous. According to our estimates, Indian mobile operators burn upwards of 2 billion litres of diesel every year, just to power diesel gensets. This translates to 5,24 billion kilogrammes – 5,24 million metric tonnes – of carbon dioxide emitted every year.
There’s a dire need for mass deployment of renewable energy sources and sustainable technology. But clean energy is only one part of the picture.
As we’ve previously underscored, rolling out mobile networks in rural and remote areas requires a complete re-engineering of technology, business models and approach. The solution is actually to let profitability and sustainability go hand in hand.
Quoting Thich Nhat Hanh from yesterday’s Times of India;
“Protecting the environment is protecting ourselves.”
The case for WorldGSM™ has never been stronger.
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.”
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.
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”
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.
9.22 million. 9,220,000. That’s how many new Indian GSM and CDMA subscribers were added in July. It breaks the earlier record of 8.94 million that was set a month earlier.
Out of all the mobile operators, Bharti Airtel expanded the most with 2.69 million. Vodafone Essar welcomed 1.7 million new subscribers, and Reliance 1.5.
Close to 300 million people now have a mobile phone in India. This makes India the world’s second largest mobile phone market after China.
The split between GSM and CDMA is currently roughly 74% vs 26%.
As new GSM operators, such as Videocon, Unitech, Reliance and Tata Telservices, start launching mobile services by the end of this year, growth is expected to grow upwards of 10 million new subscribers per month.
Rafat Ali recently wrote a blog entry about Cyriac Roeding’s (former EVP of mobile at CBS) travels in India.
He visited the spiritual city of Varanasi, and found himself standing at an intersection, observing his surroundings:
“The backdrop of this ancient scenery is dominated by a giant billboard from the mobile carrier Vodafone. And on the sidewalk, where men in wet orange T-shirts pass by after their spiritual bath in the Ganges River, a young entrepreneur has set up a booth on two wheels, which carries only two stationary telephones on a counter. This is a mobile phone recharging station, where consumers can add credit to their prepaid cell phones.”
There are many reasons for India’s mobile revolution. One of the most important is accessibility. Only a couple of million Indians – around 5% of the population – have Internet access. And getting a traditional wired phone installed is often a cumbersome process.
As it’s possible to get a new mobile phone for as low as $25, and as mobile services (voice, text messaging, data) are priced very competitively (the average country-wide ARPU lingers around $7), getting a mobile phone is the way to go.
But an enormous challenge still remains – making sure that mobile services are accessible to everyone. Which in the case of India translates to close to 400 million people – a majority located in rural areas – that still can’t use a mobile phone because there’s no coverage.
That’s where VNL’s WorldGSM™ system comes into the picture – helping operators reach rural markets profitably.
To learn more about India’s mobile market, here are some resources worth visiting:
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