Nokia Siemens Village Connection project
The Nokia Siemens project, which is to be released next year is designed to target the rural village populations in emerging markets. It has been build due to rising demand for mobile services in these markets, and the high percentage of populations who live in rural areas. In Africa, it is estimated that 70% of the population live in villages, and currently, most of these cannot afford the services or handsets available.
The rationale for the project is based on predictions that of the one billion new subscribers expected worldwide by 2010, 80% of these are likely to be from lower-income populations such as rural villages in emerging market countries. These rural populations, which include half of the world’s population, are only able to pay approximately a third of the cost of mobile services as the majority of current users already pay. Therefore the key to further development for this market segment is low-cost delivery methods.
Nokia Siemens have identified this need and requirements, and defined three keys areas that must be targeted to allow successful implementation of a low-cost solution.
‘It requires innovative technologies to deliver low-cost solutions, novel business models for rural areas and the synthesis of a new value network to make the solution feasible.’ (from the project’s white paper)
The project itself is one that is designed to profit all parties involved, from the mobile operators, to the end users, and the entrepreneurs or small businesses in between with a new business model, which is designed to enable these lower-cost alternatives to mobile connectivity.
In simple terms, the project extends GSM networks past the current coverage to areas with sparse populations that would tend to have higher costs incurred through coverage than urban areas, by setting up mini-networks or ‘GAPS’ in villages. These network bases will require simply a PC, a GSM transmitter, power, and radio frequency. The whole thing will be plug and play and will support around 80 subscribers. It will support voice and text and can be expanded by joining the GAPS to create larger networks. They will also be connected via ‘Access Points’ which will connect around 200 GAPS so that voice and text can be transmitted between their subscribers. Internet would also be possible with this system, but the focus currently is providing basic services for as low cost as possible, and Nokia Siemens anticipate that this system will fall within the US$3 per month per user that has been defined.
This system caters for two business models that can support it. The first is one where a local entrepreneur can run the network themselves as a franchise, without training or assistance from the mobile operator. The second is that the operator may employ local people to run the network for them.
Seems like a potentially effective project, I will look forward to finding out about the outcome some time next year.
Relevant links:
The project website: Village Connection project site
