The global expansion of mobile telephony between 2003 and 2008 has ushered in unprecedented access to communications for consumers and businesses worldwide. Most of the growth has taken place in the developing world and the trend is set to continue, with mobile phone usage expected to reach near-universal levels of connectivity by 2015-20.
With telecom penetration in most developed markets at over 100 per cent and rapidly growing in emerging markets such as India and China, connectivity in rural regions is the next growth frontier. While success stories in the rural space have primarily been scripted by largescale government intervention, these regions, which remain untapped in most countries, including mature markets like the US, represent a huge growth potential for private telecom operators. In India, the fastest growing telecom market in the world, rural regions account for 70 per cent of the total population, and are now the main focus area of the government and operators.
With the growing realisation that the digital chasm will hamper socio-economic development in these regions, governments and operators across the globe are collectively making an effort to enhance connectivity in rural and remote areas. The initiatives, being funded on a large scale by multilateral agencies such as the World Bank and the Asian Development Bank (ADB), comprise modernising rural communities, particularly in remote areas, by improving connectivity through wireless broadband networks; mobilising the community’s socio-economic activities through village network portals and; building tele centres to improve service access in remote areas, among others.
These efforts are yielding results and progress, albeit slow, is being made. tele.net takes a look at some of the initiatives being implemented across the globe…
Europe
With government information and filing of tax returns increasingly going online, broadband connectivity offers a number of social benefits. For instance, in the small town of Nuenen in the Netherlands, with all the homes being connected to a 100 Mbps network, the largely elderly residents are now able to hold online tele-conferences and have their health monitored remotely from the nearest hospital. This has significantly improved their quality of life. Taking a cue from its neighbour, the UK government is also intending to use its planned GBP 1 billion Next Generation Fund to provide broadband services to rural and underserved regions of the country, and has set a goal of providing access to faster services to 90 per cent of its population by 2017. The fund is proposed to be financed by a tax of GBP 0.5 to be levied on fixed line subscriptions once the legislation comes through.
In 2009, the Government of Estonia approved plans to construct a nationwide superfast broadband network at an investment of approximately $742 million, which will enable 90 per cent of the country to have access to a 100 Mbps network by 2012, with the remainder of the population to be connected by 2015. The government is also creating an autonomous foundation comprising all the major telecom operators of the country to oversee the network’s development.
Asia
In Asia, while the sustained efforts of the Indian government and telecom operators have led to a sharp rise in the country’s rural telecom penetration from 2 per cent in 2006 to a little over 21 per cent currently, other countries, too, are making steady progress in this segment. For instance, in China, voice telephony services were available to 99.86 per cent of the country’s administrative villages by end-2009 (up from 98 per cent a year earlier), while internet access covered 91.5 per cent of these villages (up from 89 per cent a year earlier) according to data from the country’s Ministry for Industry and Information Technology. China Telecom, China Mobile and China Unicom together raised $1.5 billion to help deploy telephone and internet networks in mountainous and plateau regions in 2009.
Meanwhile, the Nepal Telecommunications Authority has recommended to the government to set up wireless broadband internet services along with voice over internet protocol (VOIP) telephony services in 38 districts of the country. The project, which is being funded by the ADB, targets to set up at least one wireless broadband internet line along with VOIP services in one village development committee in each of the 38 selected districts. It has received funds worth $7.9 million from the ADB under the Information and Communication Technology Development Project, for which a total grant of $25 million has been provided by the ADB.
The project will help enhance rural connectivity by providing broadband internet and VOIP telephony services, making information and communication technology (ICT) more accessible to remote areas and enabling the delivery of e-governance services. If things go as planned, the project is likely to be completed within the next three years.
The US
In the US, an estimated 50 per cent of the population does not have access to broadband services. Recently, the government announced the National Broadband Plan (NBP), the country’s first comprehensive broadband plan that will lay the foundation for next-generation internet. Under the plan, measures will be taken to reform the current universal service mechanisms so as to enable the deployment of broadband and voice in high-cost areas to ensure easy broadband availability among the lowincome groups. It will also support efforts to boost the adoption and utilisation of broadband services. It will provide services that have actual download speeds of at least 4 Mbps, actual upload speeds of at least 1 Mbps as well as an acceptable quality of service for the most common interactive applications. According to industry experts, NBP has given a significant thrust to the rolling out of broadband in rural areas. It will help subsidise network build-out in rural areas as well as provide greater connectivity to companies and small businesses looking to penetrate these markets.
Latin America
A pilot project, which envisaged the implementation of an inexpensive and scalable wireless network solution supported by a low-tech and low-power environment, was undertaken in 2009 in order to increase access to affordable connectivity in rural Mexico. The project was the joint effort of a private Mexican telecommunications company, Pegaso Banda Ancha, which provided the connectivity service, technology and equipment; a public sector agency, Diconsa, which provided the distribution network in rural communities; and a financial institution, the Inter-American Development Bank, which provided the required resources to finance the pilot experience, and based on the results, would structure a larger operation to expand the pilot model to reach millions of low-income beneficiaries.
With total investments worth $180,000, 10 rural villages in the Yucatan region were connected via satellite to the internet and VOIP phone services. Though many of the villagers had used the internet or a phone service earlier, this was the first time that checking mails or making phone calls was just a short walk away for them.
Meanwhile, the Government of Venezuela plans to invest $11.6 million to set up 200 public internet centres across the country during 2010. It has also installed 2,000 satellite aerials for internet use in the country’s remote areas using Venezuela’s own satellite, Venesat-1. The project stipulates the deployment of a total of 16,000 satellite aerials.
Africa
According to a Commonwealth Telecommunications Organisation report, Commonwealth African countries such as Sierra Leone and Zambia are lagging in rural access, leading to overall sluggish economic growth. The report finds that although the recent years have witnessed a remarkable growth in penetration rates in some African countries, especially through mobile networks, the continent’s aggregate penetration rate still remains lower than 30 per cent. Internet access and usage levels remain well below 10 per cent for most of Africa. With over 60 per cent of Africa’s population residing in unconnected rural areas, the continent clearly has a huge untapped market with an enormous potential for growth for operators, equipment manufacturers and the entire telecom industry.
The Commonwealth African Rural Connectivity Initiative was launched in 2007 with the goal of connecting the rural regions in the continent over the next decade. In its first phase, the initiative focused on major ICT constraints and challenges in 18 African Commonwealth countries including Nigeria, Tanzania, Ghana, Kenya and Sierra Leone and mapped the current status of connectivity in these regions.
The initiative, supported by the International Telecommunication Union, is now in its second phase, which entails the replicating and scaling up of a number of selected model projects so that the benefits of ICT can be enjoyed by millions of Africans. The International Finance Corporation has invested approximately $308.6 million in the Commonwealth of Africa for the development of the ICT sector in the past five years. The investment has benefited countries such as Nigeria, Ghana and Cameroon.
Clearly, new public or private sectordriven business models need to be developed in order to resolve the issue of poor rural access. Most of the successful pilot project models have been a combination of public institutions and private ICT operators or equipment vendors, with the involvement of local groups and communities in the structuring, ownership or management of ICT assets, ensuring their effective use and sustainable operation.
