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Orange vision on rural areas coverage in African countries

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Presentation by Catherine Flouvat – CSR Orange AMEA …

Presentation by Catherine Flouvat – CSR Orange AMEA
Session: ICT Infrastructure Provision and Agricultural Development
on 6 Nov 2013
ICT4Ag, Kigali, Rwanda

Published in: Business, Technology

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  • 1. Orange vision on rural areas coverage in African countries Catherine Flouvat – CSR Orange AMEA ICT4Ag - November, 2013 Stream 3 - Enabling Environments for the Agricultural Sector to Maximise the Benefits from ICTs
  • 2. 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) 2
  • 3. 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 ! only 6 points gap in Orange population coverage…the barrier is more ICT education and economical accessibility! 3 Source: Rural Coverage Segmentation – REACH project, H1 2012
  • 4. Orange rural coverage business cases in Africa
  • 5. rural coverage : introduction to business cases Equipment’s type put on antennas : Macro Macro-Cell : average costs (capex only): 80150K€ / signal emission up to 35km/ transmit data & voice SC Small-Cell : average costs: 50K€ / signal emission up to 5km/ transmit data & voice Different business models : CP 5 Community Phone : average costs for the entrepreneur: 35 to 183€ / signal emission up to 35km from the macro-cell/ transmit voice & SMS CI Community Internet: average costs for the entrepreneur: 150 to 580$ / extension of 3G coverage/ transmit: data / voice 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…
  • 6. community phone – a low-cost rural coverage extension 1/2 the model concept  the Community Phone project allows isolated villages which are not covered by the mobile network to be connected to this network thanks to an antenna extending the coverage, a handset allowing people to call from this land using a local tariff plan fixed by the entrepreneur and a solar charger the Community Phone project has  been launched in more than 3000 community phones deployed  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 6 countries the solution is considered as smart cost design as there is no CAPEX for Orange:  the micro entrepreneur contracts a micro loan in order to buy the kit: the price of the kit ranges from €35 to €180 depends on grants - 6 - the solution generates a positive revenue for Orange and the entrepreneur rewarded with the 2010 AfricaCom award for « best rural solution »
  • 7. community phone – a low-cost rural coverage extension 2/2 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 potential risks   7 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!
  • 8. 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 traditional solution 8 large tower structure, airconditioner, diesel powered, expensive 15 km coverage Altobridge solution small, rapidly deployable, passively cooled, solar powered, low-cost, voice & data (GPRS, EDGE) 5 km coverage
  • 9. the deployment of low-cost sites in far remote areas in Niger 2/3 Orange Niger network evolution  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  2011 Altobridge sites allowed Orange Niger to increase its geographical 2G coverage 2010  installed in one day, the Altobridge site CAPEX is 20-25% of Macro sites (80k€-150k€) with a fraction of OPEX Macro sites deployed in 2011 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 9 Macro sites Altobridge sites
  • 10. the deployment of low-cost sites in far remote areas in Niger 3/3 1 quality of service should not be underestimated threat of the competition 2 3 ROI* can be difficult in some areas 4 10 the redeployment of the sites is difficult *return on investment
  • 11. new business models under study 1 outsource to constructors 11 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  2 3  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
  • 12. Orange vision and recommendations 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. 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 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 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)  12 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
  • 13. thank you