Asia’s rural community is poised for growth, and with the advent of technologies it stands at the edge of significant ICT development. A study conducted by McKinsey & Company has proven the relationship between ICT readiness and economic development. It is time to kick off the ICT deployment in rural communities, to drive greater economic development for the under-performing regions of your economies.
At the heart of ICT development is broadband. Connectivity to the internet – providing access to information, communication, health, education and government services which for many have never been experienced before – stimulates significant economic activity and benefits. Observing the experiences of other markets around the world, these benefits include: As a direct impact to the ICT industry – immediate value creation and multiplier effects – South Korea and Japan have both experienced improvements in GDP and industry growth. Further benefits derive from indirect impacts from growth in other industries: Foreign investment into a country, to utilise the infrastructure. India supports a major IT outsourcing industry, which will be further improved with major enhancements to the ICT industry. The entire economy builds momentum as productivity and efficiency gains, through improved ICT support, this continues to drive performance and profitability. Observe the developed ‘wealthy’ countries of the world – all maintaining state-of-the-art ICT systems and infrastructure Delivering access to information, communication and applications of education, health and government services delivers valuable knowledge, skills and lifestyle improvements
Mobile Broadband- Need of the hour Today, there are about 1.1 billion fixed broadband lines in the world. However, this addresses only one-sixth of the global population, with many in developing markets never having fixed line access. Conversely, there are currently 4 billion mobile connections, and that number continues to grow dramatically. It is clear that mobile networks will connect the world. It is also clear that Mobile Broadband will connect the world to the Internet
To really quantify the economic impact that mobile broadband connectivity would provide to India, for example: Assuming a $20 billion investment in 3G networks, made over five years, in equal installments, calculates a total economic benefit to India would be $70 billion over this period It is estimated that in the last two years the Indian economy lost $16 billion (PPP) by delaying 3G licensing 10 percent increase in broadband’s household penetration delivers a boost to a country’s GDP up to 1.4 percent
There are several regulatory levers that will enable India, and other Asian rural communities, to truly benefit from these significant economic impacts, and build a healthy Spectrum allocation: Ensure release of 3G license/spectrum at the earliest opportunity to trigger broadband acceleration Make low-band spectrum (e.g. 700 Mhz) available to reduce base station roll out costs Ensure allocation of sufficient contiguous spectrum (10 MHz) Licensing: High fees reduce operators’ resources that can be invested in infrastructure deployment or more affordable price levels for broadband Licensing renewal Regulatory policy: Bit-stream based competition to encourage provision of cost-effective backhaul Universal service obligation to support mobile broadband Level playing field: Develop a licensing policy which encourages a level playing field Make suitable spectrum available to support all technologies Infrastructure: Promote active infrastructure sharing (BTS/backhaul) to reduce network cost Incentivise infrastructure development to support expanding mobile infrastructure networks – such as development of power-grids Provide incentives for roll out (e.g., regulatory concessions/holidays) Encourage public-private partnerships or grant separate licenses for rural areas to drive coverage Provide public funding for remote areas to achieve sufficient coverage Encourage intra circle roaming to prevent overcapacity in the network while still maintaining the same competitive intensity Enable competitive and cost effective backhaul Interconnection
2.6GHz to support high-density rural areas TDD in rural areas unlikely to meet performance quality objectives due to size of cell
Now how do you achieve ambitious political policies and flourish from the economic benefits of ICT development in India? Deploy the globally used, trusted and proven GSM technology. With nearly two decades of experience, the industry supports nearly 4 billion mobile connections and over 120 million mobile broadband connections. The evolution of GSM technology has continued to evolve, delivering ongoing enhancements to speed and efficiency, whilst enjoying the economies of scale rewarded to the growing GSM ecosystem. Backwards and forwards compatibility ensures a positive customer connection and experience.
HSPA (High Speed Packet Access)- Technology of the Future With 245 commercial networks in 108 countries, HSPA is a mainstream and proven technology, whilst all other Mobile Broadband technologies will continue to play a niche, complimentary role Over 1400 device models available from 117 suppliers – creates a strong and competitive ecosystem, delivering commercial benefits to operators and choice for the consumer 130 million HSPA subscribers worldwide and 4 million added every month – creates significant economies of scale, driving down the cost of deployment and adoption for operators and consumers
The size of the GSM ecosystem means that we’re always looking ahead and considering global social, economical and environmental impacts. Recognising that a lack of reliable and secure electricity is a major barrier to extending mobile services to many rural areas in the developing world, the GSMA is also researching and promoting the use of renewable energies through its Green Power for Mobile programme, which has recently launched a key trial of different technologies in partnership with Dialog Telekom of Sri Lanka. Supported by the GSMA Development Fund, Digicel is using wind and solar energy solutions to power 25 base stations on the Pacific archipelago of Vanuatu. The GPM programme has set the goal of helping the mobile industry use renewable energy sources, such as solar, wind, or sustainable biofuels, to power 118,000 new and existing off-grid base stations in developing countries by 2012. Achieving that target would save up to 2.5 billion litres of diesel per annum and cut annual carbon emissions by up to 6.8 million tonnes.
The GSM Association and its ecosystem parteners constantly works to identify ways to utilise mobile communciations for the benefits of rural and developing communities. There are more than one billion people in emerging markets today who don’t have a bank account, but do have a mobile phone. In February, the GSMA and the Bill & Melinda Gates Foundation launched a programme to expand the availability of financial services to millions of people in the developing world through mobile phones. Benefits to users: Improved financial access: By exploiting the extensive reach of mobile networks, the mobile industry has the opportunity to bring many people into the formal banking system Better oversight: Mobile transactions bring invisible and informal cash transactions into the formal systems Consumer benefits: Mobile technology can lower the cost of providing access to financial services as it removes the need for physical points of presence; previously unbanked consumers have more choice of services India is an important market with many unbanked customers in rural areas and GSMA has experience and resources to work on issues that enable India to bank unbanked consumers living below $2 a day.
Mobile broadband will benefit all of India and especially rural communities by enhancing access to broadband Internet and enabling schools, small business, professionals, students, NGOs, rural village citizens to have affordable high-speed Internet access. E-government initiatives, public-safety messages/broadcasting.
THE POWER OF REGULATION Robindhra Mangtani , Director, GSMA
Remit is to innovate, incubate and deliver new opportunities for our members that drive the growth of the mobile industry
REPRESENTING MORE THAN 3.5 BILLION MOBILE CONNECTIONS
ICT readiness drives economic development 0 2.5 3.5 3.0 0 6.0 5.5 5.0 4.5 4.0 3.5 3.0 4.5 4.0 5.0 5.5 6.0 Increasing ICT readiness (Digital opportunity index)** Increasing economic competitiveness (Global competitive index)* * Composite index of indicators relating to institutions, infrastructure, macro-economy, health, education, market efficiency, technological readiness, business sophistication, and innovation ** Composite index of indicators relating to coverage/access, tariffs, equipment penetration and broadband adoption Source: World Economic Forum; McKinsey Developed economies Emerging and developing economies
Broadband stimulates economic activity Source: McKinsey Examples BENEFITS OF BROADBAND South Korea Immediate value creation Multiplier effects Argentina Foreign direct investments Bangladesh, Malawi, Rwanda, Human capital formation Zambia Productivity increases Explanation GDP contribution from direct network investment Impact of broadband investment on suppliers of equipment, content, etc. Foreign direct investments as a result of good ICT infrastructure Increase in knowledge and skills as well as improved health services More efficient business processes because of connectivity Japan 1 2 3 5 4 Direct (ICT industry) Indirect (other industries)
For broadband - mobile is the answer 1.1 Billion Lines Only 1/6 world’s population 4 Billion Connections MOBILE NETWORKS WILL CONNECT THE WORLD Fixed Broadband Mobile
3G investment* in India will deliver over $70 billion economic benefit
India is estimated to have lost $16 billion (PPP) in the last 2 years, from spectrum delays
10% increase in broadband penetration delivers 0.1-1.4% GDP increase
* Investment of $20 billion over 5 years Source: McKinsey, 2009; LECG, 2009. $ MOBILE BROADBAND HAS A SIGNIFICANT IMPACT TO ECONOMY GDP
Regulatory levers that influence economics for rural broadband deployment
What needs to happen next? MAKE MOBILE BROADBAND A REALITY The Indian Government should allocate the 3G/2.1GHz spectrum to drive the deployment of Mobile Broadband across India. The planning phase for the allocation of 2.6GHz spectrum must also start now if HSPA is to evolve for the benefit of the Indian population. India will need to make further spectrum available through the Digital Dividend to support the delivery of more widespread coverage in rural areas.
Allocate a portfolio of spectrum, to maximise Mobile Broadband effectiveness
It is approximately 70% cheaper to provide mobile broadband coverage at frequencies (approx. 800MHz) than over 2100MHz
This means networks can be rolled out quickly, cost effectively, bringing cheaper services to consumers
Source: SCF Associates Study Number of base stations 2 5 7 10 20 15 x1 x1.5 x3 x5 x7 x12 UHF Band
Planning Mobile Broadband Spectrum 100MHZ OF DIGITAL DIVIDEND WILL DRIVE MOBILE INVESTMENT
Mobile’s share of Digital Dividend is essential
We suggest that 25% of the 400 MHz analogue TV spectrum should be allocated to new Mobile Broadband services
The soaring demand for Mobile Broadband requires additional spectrum
LTE needs harmonised spectrum – the lower the band, the better
700MHz and 2.6 GHz bands
No spectrum; no incentive to invest in LTE
Digital TV can never be the engine of economic growth that mobile is proven to be
450MHz 470MHz 698MHz 790MHz 3400MHz 2100MHz 862MHz 2500MHz 3600MHz 900MHz 1800MHz COVERAGE Low Cost of Deployment CAPACITY High Cost of Deployment MOBILE MOBILE MOBILE MOBILE
The GSM Family - Delivering on Promises GSM technology holds nearly two decades of proven development, proving a reliable future for investment decisions Source: Wireless Intelligence, June, 2009 HSPA+ peak theoretical data rate reaches up to 42 Mbps when using single carrier with QAM 64 and 2x2MIMO NEARLY TWO DECADES OF PROVEN TECHNOLOGY AND EXPERIENCE 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 HSPA+ 42 Mbps HSPA 14.4 Mbps GSM 9.6 kbps GPRS in 2000 GSM First call made in 1991 HSPA in 2005 3G in 2001 EDGE in 2003 HSPA+ in 2008 LTE 172 Mbps EDGE 473 kbps WCDMA 384 kbps GPRS 114 kbps 3G HSPA: 120 million cnt WCDMA: 238 million cnt 2G GSM: 3.8 billion cnt
Affordable Mobile Broadband 1400 Devices from 143 suppliers Connections today plus 4 million per month Thriving ecosystem delivering competition and choice Global scale, driving down costs HSPA IS A MAINSTREAM, PROVEN TECHNOLOGY 245 commercial Networks in 108 countries Global network coverage, providing global roaming