Orange vision on rural areas coverage in African countries

Catherine Flouvat – CSR Orange AMEAICT4Ag - November, 2013

Stream 3 - Enabling Environments for the Agricultural Sector to Maximise the Benefits from ICTs

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people the most underserved by ICT are in majority located in rural areas & depend directly or indirectly on agriculture for their livelihoods

despite barriers and challenges to provide ICT accessibility (economical and geographical), Orange believe that :

60% of the untapped market is located in rural areas (Orange 2010)

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challenges are very different from one country to the other, then 1 solution cannot fit all…

Niger’s situation with a national mobile penetration rate inferior to 40%, despite Orange 76% population coverage (2G) and 12% 3G population coverage is not presenting the same barriers than

Mali’s situation with a national mobile penetration rate of 98%, and an Orange 82% population coverage (2G) and 18% 3G population coverage !

Source: Rural Coverage Segmentation – REACH project, H1 2012

only 6 points gap in Orange population coverage…the barrier is more

ICT education and economical accessibility!

Orange rural coveragebusiness cases in Africa

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rural coverage : introduction to business cases

Macro-Cell : average costs (capex only): 80-150K€ / signal emission up to 35km/ transmitdata & voice

: data / voice

Equipment’s type put on antennas :

Small-Cell : average costs: 50K€ / signalemission up to 5km/ transmit data & voice

Community Phone : average costs for theentrepreneur: 35 to 183€ / signal emissionup to 35km from the macro-cell/ transmitvoice & SMS

Macro

SC

CP

CI

Different business models :

Community Internet: average costs for theentrepreneur: 150 to 580$ / extension of 3Gcoverage/ transmit data mainly, voice …

technology can evolve from

Community Phone to Small Cell up to

Macro-Cell if needed, as the

population’s education and usage

is growing…

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community phone – a low-cost rural coverage extension 1/2the model concept

the Community Phone project allows isolatedvillages which are not covered by the mobilenetwork to be connected to this networkthanks to an antenna extending the coverage, ahandset allowing people to call from this landusing a local tariff plan fixed by the entrepreneurand a solar charger

coverage extension & equipment needed

by adding the antenna within a 15 to 35km radius from the base station

equipment : handset + software, 1 SIM card, solar charger, an antenna

the Community Phone project has

been launched in 6 countries

more than 3000 community phones deployed

the solution is considered as smartcost design as there is no CAPEX forOrange:

- the micro entrepreneur contracts a microloan in order to buy the kit: the price of thekit ranges from €35 to €180 depends ongrants

- the solution generates a positive revenue forOrange and the entrepreneur

rewarded with the 2010 AfricaCom award for « best rural solution »

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benefits of the solution

financially profitable solution for MNOs energy sustainable thanks to a solar charger device the solution allows job creation in rural areas

community phone – a low-cost rural coverage extension 2/2

potential risks

competitors could deploy a macro site near a community phone 2 impacts :

lost of market share job destruction (micro entrepreneur) like Malitel in Mali using

the Orange Community Phones as a geo-marketing information!

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traditional solution Altobridge solution

large tower structure, air-conditioner, diesel powered, expensive 15 km coverage

small, rapidly deployable, passively cooled, solar powered, low-cost, voice & data (GPRS, EDGE)5 km coverage

the deployment of low-cost sites in far remote areas in Niger 1/3

Orange Niger has partnered with Altobridge in 2011 to complete a first phase of mobile connectivity deployments in remote regions of Niger

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37 low-cost sites had been deployed in remote areas in Niger

an average of 1200 first-time subscribers at each location have connected to the new service

Altobridge sites allowed Orange Niger to increase its geographical 2G coverage

installed in one day, the Altobridge site CAPEX is 20-25% of Macro sites (80k€-150k€) with a fraction of OPEX

Orange Niger network evolution

2010

2011

Macro sites deployed in 2011

Macro sites

Altobridge sites

the deployment of low-cost sites in far remote areas in Niger 2/3

the choice of AltoBridge technology was motivated by the search for a “low cost” solution to seize the opportunity to be the first operator to cover small remote and inaccessible areas thanks to low investment, until these areas become more profitable

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threat of the competition

quality of service should not be underestimated1

22ROI* can be difficult in some areas33

the deployment of low-cost sites in far remote areas in Niger 3/3

44 the redeployment of the sites is difficult

*return on investment

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new business models under study

outsource to constructors

many constructors have developed low-cost solutions (e.g. Ericsson, IPX)

the constructor is in charge of buying the base station and managing it

it is up to the constructor to decide whether or not upgrade/replace a small cell by a larger capacity cell if traffic increases

this solution enforces revenue & risk sharing between MNOs and constructors

new business model based on an “info-preneur”

outsource to a local agent rather than an equipment vendor

the operator keeps the control of the network while lowering the CAPEX

provide partial coverage

switching on/off the base station rather than providing 24h availability

contribute to reduce costs related to energy consumption

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sharing infrastructure : a new ongoing momentum

the “infrastructure sharing” is a new trend aiming at reducing the network cost of ownership by sharing passive infrastructures; sharing active infra or the rest of their installation (energy, air conditioning, etc.) is under study.

the sharing arrangement lets operators

reduce their costs by over 30%

many MNOs have decided to adopt an “infrastructure sharing” model to profitably extend their networks to rural areas

Orange vision and recommendations

development of new partnerships, of which Public-Private Partnerships (PPP)

expanding network and connectivity to rural areas often required new kinds of partnerships with local stakeholders and communities to make sure ICT adoption will happen

an active and transparent dialogue is needed between international development aid agencies (whose role is to provide the funds needed while setting up development and financial criteria), governments (who define local strategy and policy) and private companies (who bring the technical & commercial expertise)

MNOs involvement in the agricultural sector and other “life services for rural people” can boost this kind of partnerships. By developing PPP, the MNO doesn’t support all the costs by itself

thank you