Dateline: Cairo, Egypt. I’m here to speak on Africa’s wireless future at ITU Telecom Africa 2008 – but as with many conferences, it’s the hallway chatter that’s the most interesting. Today I was talking with Carsten Clemens of Nokia Siemens Networks about the increasing divergence in mobile connectivity economics. For the next billion subscribers who want phones, the costs rise (as they are more rural thus less efficient to serve), while their ability to spend is dramatically lower. That’s not news; operators and their vendor partners around the world are working to lower costs to make mobile service a reality in many new markets.
But what I heard about from Carsten was an innovation that’s as much about a new business model as it is about lower system costs. In trial in Tanzania now is an extremely simple wireless base station with subscriber management run from a PC, with an equally simple antenna, all run from a solar-powered battery. The system can be managed by a village entrepreneur, someone perhaps who also sells drinks, soap packets and newspapers. The entrepreneur can set and collect a flat fee for intra-village calls, managed entirely by his setup. And a larger operator who supports him can benefit from unleashing pent-up demand for in-bound calls to the village from absentee workers, extended family, and others who previously had no way to reach the villagers by phone. “It’s still low ARPU,” said Carsten, ”but it can be attractive in these markets, especially if the operator sets it up in a franchise model, and an entrepreneur can add more villages to the systems he runs. It’s already working in a similar fashion in India.”
Downside: no data support yet. But compared to existing rural mobile setups that still require towers that cost $100K or more, this is breakthrough thinking — not so much in the use of low-cost equipment, but in the approach to revenue-sharing that creates incentives that suit the way developing-market villages work.
I visited Tanzania several years ago; here are some eager school girls I met. Their country is stunning. But it will be no less so when they have the same opportunities to connect to the world that I do.
