Rwanda: Vanu innovates low-cost rural coverage by lowering both OPEX and CAPEX costs
Most of Africa’s mobile operators have reached the edges of their addressable markets and have more pressing business investments to make like improving their networks for LTE. But there are still considerable numbers of Africans who might be connected with a different business model. Russell Southwood spoke to Vanu Bose, founder of Vanu about how he has done this for a forthcoming roll-out in Rwanda, working with the mobile operators.
“The fundamental problem (in rural areas) is that the revenues are lower and the costs are higher,” says Boase. Its approach to tackle this has been two-fold: firstly, to lower the operating costs of the base station; and secondly, to take a different approach to the masts used.
Its base station – which has been used by Vodafone India both in rural areas and in Mubai – has been designed to work using 50 Watts of solar power as against the more typical 1-4 KW. It is temperature tolerant up to 55 degrees, therefore requiring a great deal less cooling.
“In low population areas, the first instinct is to build the tower higher to cover more people (which costs more money). When we looked at how to do it, we wanted to build where people live, work and commute”.
“On this basis, 90% of the homes and businesses are within 1-2 kilometres of roads, even if those roads are dirt tracks. So we’re covering (rural areas in Rwanda) with small cells that have a reach of 1-5 kms, depending on terrain.” To do this, it uses a 10 metre pole instead of a tower. As a result, the physical footprint of the base station is considerably smaller than a traditional tower.
The business model is to offer these sites to mobile operators on a full active switch basis:”We’re saying pay us a few pennies per minute and we’ll have multiple carriers on the network. So the network is amortised by multiple carriers. We don’t have retail networks. We can do ARPU as low as US$1 and Rwanda has one of the lowest ARPUs in Africa.” He says that the three mobile carriers operating in Rwanda will sign up.
It is rolling out 376 small cells that will cover 1 million people who are currently without a signal and the roll-out is now underway. The cost of the investment is US$10 million. That’s US$10 million to cover 1 million people. Now Rwanda’s a small country and it would cost more to cover a larger geographic area but the potential is clearly enormous if it works.
The current roll-out is being done with a version of the low-cost base station that offers 2G and Wi-Fi. There is a 4G/LTE version coming that will work on 85 watts of power. He maintains that some Internet connectivity is better than no connectivity and that 2G and Wi-Fi are the most appropriate solution.
“The Ministry of Education gave me a list of schools without connectivity. The community and the regulator like it.”
In what is now a very tough market, mobile operators should see this kind of wholesale model to cover rural areas as manna from heaven and embrace it. Each minute of a call made in a rural area provides income at no risk that they would not otherwise have.
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