India has emerged as the fastest growing telecom market in terms of its humongous subscriber base and vast reach. Hence, today's subscriber may not only be a business tycoon or a corporate executive, but a person from the interiors of the country or even the panwallah near your office. The enormous growth in mobile services, in the past few years, has been confined largely to urban consumers of the country. The challenge now lies in providing affordable connectivity to the people living in rural and remote areas. Low income and lack of infrastructure are the main reasons keeping people in rural areas from enjoying the huge benefits made possible through mobile services.

Rural areas also present a large untapped market for mobile operators to build coverage and connectivity. “The rural market is characteristically different from the urban or semi-urban market which poses new set of challenges for service providers to set up an infrastructure there,” says Ramdev Sharma, chief technology and marketing officer, Huawei Telecommunications. “At some places, there might be geographical barriers, and at others, there are power issues. But, above all, the high Capex acts as a fuel to the fire,” he further adds. India might have gained a status of a country with the fastest emerging telecom industry, but there is still a long way to go. When it comes to setting up infrastructure in rural areas, the operators are having a tough time.

Hampering Growth
India still has about 80,000 villages without electricity and over 25,000 amongst them have little chance of being connected to the power grid, in the conventional way. Of the approximately six lakh villages in India, 45% still do not have even fair weather roads. Lack of a three-phase power supply and inaccessibility to these remote villages has become a major obstacle toward setting up required telecom infrastructure sites. In the absence of three-phase power transmission line, running the infrastructure sites on DG substantially increases the operational cost. Security is another concern as theft and pilferage of diesel and other items are common.

According to Prakash Ranjalkar, COO, GIL, “With industrial and population growth, India is facing a large gap between power demand and power generation/distribution. This has led to a severe power crisis in rural India. Power companies and state electricity boards are not in a position to provide continuous power for more than a few hours per day in rural areas. For rolling out telecom sites here, the cost of providing cables from transformers up to the sites becomes prohibitively high. Moreover, due to frequent outages, sites require running of DG sets for several hours. Electrical energy from DG costs more than double the cost of EB power.”

“Due to non-availability of reliable power, charging batteries particularly in case of wireless technologies where the need of power is not limited only to the premises of telecom operators but is required at the subscriber-end as well is difficult. There has been reluctance in accepting wireless technologies in certain areas for want of proper power supply,” says Kuldeep Goyal, CMD, BSNL.

India still has about 80,000 villages without electricity, and over 25,000 among them have little chance of being connected to the power grid in the conventional way. Of the approximately six lakh villages in India, 45% still do not have even fair weather roads

Banking on Biofuel
The problem is more challenging at remote locations which do not have proper access roads. Hence, transportation becomes an issue. Transportation of diesel to remote sites is specifically difficult. Telecom operators and infrastructure service providers are exploring non-conventional and renewable alternative energy sources like wind power, solar energy, and bio-fuel for running infrastructure sites. Essar Telecom Infrastructure has designed a special type of diesel storage tank to overcome the challenge. “ETIL is evaluating cheaper and cleaner sources of energy and methods for more optimized consumption of energy,” says Ajay Madan, CEO, Essar Telecom Infrastructure.

The Nokia Siemens Network is using solar/wind power to run sites. “In fact, we have live sites running in Orissa. We also have software features which can ensure that BTS runs at a lesser capacity during off-peak hours, thereby consuming less power,” says Ajay Ranjan Mishra, head of business developments, New Growth Markets, Nokia Siemens Networks.

Ramdev Sharma of Huawei also advocates power efficient infrastructure. “There are many areas in the country that will have a telecom network first and then other developments such as road and power. We, as an infrastructure provider, are trying to provide a solution best suited for power scarce areas,” says Ramdev. TRAI has also recognized the need to encourage use of non-conventional energy sources and has recommended the DoT to finalize suitable schemes in consultation with the concerned ministry to resolve the power availability issue.

Power accessibility in rural India is unfortunate. But, by converting the energy of organic matter into biofuel, communities in rural areas could market it to mobile companies that can use it to power their base stations, which receive and beam wireless signals. Two experimental schemes are in progress in Nigeria, Lagos, and Pune in India in an attempt to power the Global System for Mobile Communication networks with biofuel. Globally, over two billion people use GSM, a digital-standard for cell phones. The GSM Association (GSMA), a development fund, along with mobile operators Idea Cellular and Ericsson are now testing a mobile phone base station powered by biodiesel.

“Apart from our desire to expand our coverage, biofuel produces economic empowerment because lack of connectivity is directly related to economic impoverishment,” said Prashanth Donepudi, project manager, Nigerian GSM Association Development Fund, in a statement reported on February 16, 2007 by scidev.net. The project's first phase that examines the viability of non-edible plant-based fuels like Jatropha and cotton, is near completion. In the next trial stage, a supply chain will be established, which will use homegrown crops for producing biodiesel to supply power to 5-10 mobile phone base-stations in Maharashtra, India. If the experimental project is successful, GSMA aims to take this program to other regions of India with Idea.

Infrastructure Sharing: Onlookers' View
TRAI has proposed the sharing of passive, active and backhaul networks in the country for faster rollouts of networks in urban and rural areas, and at a lower cost. Considering the exponential growth in wireless telecom services and the requirement of a vast infrastructure for mobile telephony in the country, sharing infrastructure can reduce massive investment, says a release issued by TRAI. Apart from huge investments needed to build fresh infrastructure, the time taken to rollout could be a major bottleneck in achieving the targeted 500 mn subscribers by 2010. The country would require about 3.3 lakh towers by 2010 against the present one-lakh towers. Even if the target is achieved, it will only be about 50% of the teledensity, with major gaps in the rural areas, TRAI said in its proposals to the DoT.

TRAI has also sought amendment in the license condition to allow active infrastructure sharing limited to antenna, feeder cable, node B, radio access network, and transmission systems. However, the authority is not in favor of sharing spectrum at this stage. According to the TRAI proposal, considering the importance of backhaul sharing for mobile services in rural and far-flung areas, licensing conditions should be amended to allow operators to share their backhaul, in a limited way, on optical fiber. No sharing of spectrum at the access network side is permitted. TRAI took into consideration prevailing international practices and has opted for co-operative efforts amongst telecom service providers with least regulatory intervention. The authority does not prefer any mandated passive infrastructure sharing but said that the entire process should be transparent and non-discriminatory. Licensees should be required to announce on their website the details of existing as well as future infrastructure installations, available for sharing by other service providers.

TRAI has recognized the need for immediate identification of critical infrastructure sites. It has recommended a joint working group under the chairmanship of the district magistrate to take spot decisions. The representatives of the telecom service providers, municipal corporation/local bodies and a representative of military land control wing, where necessary, would be its members. In order to provide level-playing field and rollout opportunities to all the licensees, the authority has expanded the scope of financial incentive for passive infrastructure sharing in rural and far-flung remote areas.

Rising Costs
The biggest obstacle in the way of rural infrastructure expansion from the service provider's perspective is less RoI and high Capex and Opex. “The population is scattered in rural areas. If a service provider deploys a BTS at a place, it remains un-utilized because of scarce population. Since coverage is the key for rural market, it takes more investments to cater to another bunch of people. Expansion increases the Capex and unutilized services increase Opex,” says Ramdev. “Sustaining the blistering growth rate and provide mobility to rural consumers throws up a different set of challenges. From an economic perspective, the two key challenges for equipment providers; first, quick and cost effective rollout of networks in rural areas in the context of declining equipment prices. And, second, simultaneously investing in creating products/solutions that enable viable business models, drive down total cost of ownership for operators and the affordability barrier for the common man,” says Ranjan.

“It would be difficult to estimate an RoI as it depends on the particular case and the business model adopted by the operator. However, we as an infrastructure vendor, try to address the main Capex and Opex issues. The solution considerably reduces the site costs as there is no need for a tall cell tower with heavy-duty foundation. Backhaul transmission costs are reduced, as transmission is based on cost effective IP technology and internal village traffic is switched locally. Operators can also avoid potentially large cost elements related to subscriber acquisition, provisioning and care as the village entrepreneur does these locally. This business model will be sustainable for all parties involved and rural connectivity should be viewed as an opportunity,” he further adds.

The vendors are working on solutions for operators that will enable network expansions in rural areas as well and enhance universal access. These vendors are designing the solution and the business model so that operators can reach rural consumers who can only afford around three-dollar worth of mobile services per month.

Kumar Anshuman Ruchi Phadke