Village Connection Local Switching - · PDF fileVillage Connection Local Switching ... GSM...
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Customer ConfidentialVC / April 20091 © Nokia Siemens Networks
Village ConnectionLocal SwitchingAffordable connectivity for rural villages
October 2009
Customer ConfidentialVC / LCS April 20092 © Nokia Siemens Networks
Content
• Market outlook• Village Connection
– Architecture– Business Model
• How to use Financial Instruments– Principle
Customer ConfidentialVC / April 20093 © Nokia Siemens Networks
Market Outlook
Customer ConfidentialVC / LCS April 20094 © Nokia Siemens Networks
Nokia Siemens Networks
• 60,000 people in more than 150 countries600 Communications Service Provider customers• World’s second largest telecommunications supplier• Every second we touch the lives of millions and millions ofindividuals.
Customer ConfidentialVC / LCS April 20095 © Nokia Siemens Networks
Towards the 5 Billion Milestone
Mobile phonesubscriptionsglobally,millions
Source: Nokia0
-92 -93 -94 -95 -96 -97 -98 -99 -00 -02-01 -03 -04 -05 -09
200
400
600
800
1 000
1 200
1 400
1 600
1 8002 000
2 2002 400
2 600
2 800
3 000
-07
4 billionin 2009
4 billionin 2009
Global penetration>50%
-15e
5 billionin 2015
5 billionin 2015
3 billionin 2007
3 billionin 2007
Customer ConfidentialVC / LCS April 20096 © Nokia Siemens Networks
.6% growth in GDP
An increase of10 mobile phones per 100 people
Customer ConfidentialVC / LCS April 20097 © Nokia Siemens Networks
Affordability is the key reaching the next billionmobile consumers
Global Income Pyramid. Adapted from Nokia Worldmap
1$/day
2$/day
4$/day
4-40$/day
>40$/day
HSPA,WiMAX…
Voice, Internet/IPIP connectivityaffordability barrier at1.5bn
Voice, no Internet/IPVoice affordabilitybarrier at 2.5bn
GSM solutions,Village
Connection… No Voice,Internet/IP2.7 bn people
Customer ConfidentialVC / LCS April 20098 © Nokia Siemens Networks© 2008 Nokia V1-Filename.ppt / YYYY-MM-DD / Initials8
Livelihood and Life Improvement Services are HighlyRelevant; Entertainment has the Widest Appeal
Livelihood
AgricultureLivelihood
AgricultureLife improvement
EducationLife improvement
Education EntertainmentEntertainment
Customer ConfidentialVC / LCS April 20099 © Nokia Siemens Networks
TCO < USD 5 enables the majority of the lower-income consumers to use mobile communications
US
dol
lars
0
5
10
15
20
25
Average 10.88 US dollars
Hon
dura
sIn
dia
Bang
lade
shPa
kist
anU
zbek
ista
nIn
done
sia
Sri L
anka
Mad
agas
car
Chi
naG
uine
aM
ongo
liaM
alay
sia
Para
guay
Thai
land
Suda
nC
ambo
dia
Jord
anM
aurit
ius
Egyp
tG
uate
mal
aVi
etna
mEt
hiop
iaG
hana
Kyrg
yzst
an Iran
Tajik
ista
nPh
ilipp
ines
Tuni
sia
Alg
eria
Hai
tiBo
tswa
naBo
livia
Sene
gal
Syria
Keny
aM
oldo
vaE
l Sal
vado
rG
eorg
iaEc
uado
rU
rugu
ayU
gand
aAr
men
iaM
exic
oC
olom
bia
Nam
ibia
Swa
zila
ndSo
uth
Afric
aLe
soth
oD
om. R
ep.
Côt
e d’
Ivoi
reAr
gent
ina
Mal
awi
Zam
bia
Chi
leC
amer
oon
Nig
eria
Tanz
ania
Kaza
khst
anC
had
Ango
laC
ongo
Guy
ana
Mor
occo
Burk
ina
Faso
Turk
eyAz
erba
ijan
Gab
onN
icar
agua
Today twelve countriesreach the monthly TCOtarget level.In 2007 there was only fourTCO high performers.
Customer ConfidentialVC / April 200910 © Nokia Siemens Networks
Village Connection
Customer ConfidentialVC / LCS April 200911 © Nokia Siemens Networks
Village Connection Milestones
1. Idea created October 20032. First Installation December 20053. First network December 20064. Commercial launch May 20075. 1st release December 20076. 2nd release October 20097. 3rd release 3Q/2010
Customer ConfidentialVC / LCS April 200912 © Nokia Siemens Networks
Lean approach for rural coverage:Village Connection
GSM Access Point in a village X• Wide area coverage with
minimal site cost• Calls in village connected
locally• Cost-effective IP connectivity
for long-distance calls• Core network maintains control:
regular charging and services• Option of Internet Kiosk: shared
internet access for villagers
OptionalSolarPanel
BatteryVoice& SMS
InternetKiosk
Up to 80% less site CAPEXMinimal OPEX
Customer ConfidentialVC / LCS April 200913 © Nokia Siemens Networks
Calls within village are switched locally
GSM MS
GSM MS
GAP 2
GAP 1 GSM MS
Rest of the world
Intra-village calls
Rest of the world callsCalls between GAP
IP/Ethernet
MSC
ACBSCE1
• GAP switches traffic locally for subscribers in the village: only signaling takestransmission bandwidth
• Cost-effective IP connectivity for backhaul• Spare transmission capacity can be used for shared or mobile broadband• Sufficient coverage due to excellent radio performance of Flexi BTS
Customer ConfidentialVC / LCS April 200914 © Nokia Siemens Networks
Village Connection in the field
Operator 3
Operator 2
Operator 1Village Connection
Mobile World Congress 2008, Barcelona14 © Nokia Siemens Networks
Customer ConfidentialVC / LCS April 200915 © Nokia Siemens Networks
Optional host business model makes operatingvillage networks easier
VoiceSMSGPRS, EDGE
Village
Hostagreement
User
UserUser
Internetkiosk
All charging options supported
SharedInternetaccess
Internet
Village 1GAP host
GSMoperator
Village 2 Village 3
Host role:SitemaintenanceSecurityDistribution
Customer ConfidentialVC / LCS April 200916 © Nokia Siemens Networks
OtherInterconnect(roaming)
Host business modeldecreases operator’s OPEX
Distribution• Lower storage and
distribution costs
Network operation & maintenance• Smaller site rental costs• Reduced power maintenance costs• Efficient site security• Spare parts same as in rest of network
Customer service & care• Smaller SIM
activation costs• Reduced subscriber support
costs
Marketing and sales• Reduced shop leases• Lower customer
acquisition costs
*Data based on: Pyramid study 2006, example statistics of OPEX structure, six operators innew growth markets
business model relatedsavingstechnology relatedsavings
Customer ConfidentialVC / April 200917 © Nokia Siemens Networks
How to Finance Franchise Business Model
Customer ConfidentialVC / LCS April 200918 © Nokia Siemens Networks
Why Distributed Business Model?
1. Capital stream from developedareas to rural
2. Job creation in rural communities3. Support existing communities,
increasing trust
Customer ConfidentialVC / LCS April 200919 © Nokia Siemens Networks
How to do it?
1. Using large international funds– Providing friendly loans for target country
2. Having a target country based organization– Purchasing and importing equipment– Keep equipment on their balance sheet– Find local entrepreneurs– Support entrepreneurs
3. Local entrepreneur– Ready business model– Working equipment– Friendly contract
Customer ConfidentialVC / LCS April 200920 © Nokia Siemens Networks
Africa Business Landscape
Electricity– Mobile operator is the largest diesel
distributor in many African Country– Curiosity for new technologies
Security– Community involvement
Culture– Different languages
Resources– Time as an unlimited resource– Good intention– Support the growth of African
companies
Customer ConfidentialVC / LCS April 200921 © Nokia Siemens Networks
The Risk of New Technology
Profit
Inve
stm
ent
Loss
Customer ConfidentialVC / April 200922 © Nokia Siemens Networks
Thank you