|Topic:||Making mobile Internet a reality in Sub-Saharan Africa|
|Title:||VP & General Manager, Europe, Middle East, Africa|
Christian Morales is Corporate Vice President and General Manager of Intel Europe, Middle East and Africa (EMEA) responsible for Intel product sales and marketing in the region.Prior to this role, Morales was Intel’s vice president of the Sales and Marketing Group and co-general manager of Asia Pacific responsible for implementing Intel’s strategies in Asia. Previously, he served as the general manager of Latin America. He joined the company in in Paris as an Intel field sales engineer and later was named director for Spain and Portugal. He also served in senior positions managing Western Europe channels and OEMs.
Christian Morales graduated with an electrical engineering degree from the Electricity, Mechanics and Electronics Engineering School in Paris. In 1990, he completed the Young Managers Program in the MBA program at INSEAD.
Mobile Internet access drives socio-economic development in Africa, facilitating businesses and providing access to health, educational and government services. Operators, though, are trapped between falling revenues and rising costs as competition grows and over the top (OTT) service providers, that use telecommunications infrastructure to offer data services, strain the networks but do not return revenues to operators. Operators look to new technologies that reduce network and service costs – smart cells, solar power, software defined networks, among others – to survive.
During my frequent travels to Sub-Saharan Africa, I’ve noticed a burgeoning communications revolution. Over the last few years, the number of mobile phone customers has boomed, to the extent that I’ve heard some actually say the market is saturated.
I’ve seen the mobile Internet slowly taking off too, as smart mobile devices become increasingly affordable. However, while smartphone penetration within South Africa is more than 20 per cent, outside of South Africa, smartphone penetration runs at only two to four per cent.
Smartphone use is likely to rise with a new wave of smartphones created for emerging markets, including the Yolo smartphone from Safaricom in Kenya. Running Android, it retails for Kshs 10,999 (about US $125), and has a 3.5-inch touchscreen. Devices like this, as well as notebooks and smart tablets such as the Samsung Galaxy Tab 3 will enable many subscribers to access the Internet for the first time.
Connecting people and communities to the phone network and Internet brings huge societal benefits, including:
• Health: Mobile communications have made it easier to consult with healthcare professionals, and to access and share healthcare information with rural communities.
• Education: Africa is a young continent, with half of the population under 25 years of age in some states, and I’m excited about the potential for transformation that the next generation brings. Achieving universal primary education is one of the United Nations Millennium Development Goals, and education is seen as critical in Africa for enabling the continent to catch up with developed nations, and for empowering its citizens. Wider access to teaching resources and reference materials online makes it easier to deliver education into schools and communities.
That’s not the whole story, though: From my travels in the region, I know that people across Africa want to create and use their own educational content that reflects their cultures and economic priorities, rather than reusing content from developed economies. Smart mobile devices significantly lower the barrier to content creation.
Additionally, a number of multinational companies are working with local partners in Africa on the Millennium@EDU Program, which aims to contribute to the advancement of the Millennium Development Goals by providing computing devices to students and teachers at an affordable price. The devices are designed not only for use in the classroom, but also at home, so the benefits of schooling can extend to the whole family. There are a number of national initiatives to drive transformation through education in Africa, as well. In Senegal, for example, Intel is working with the Ministry of Higher Education and the World Bank to provide a Samsung PC to every student attending one of the five largest public universities.
• Economic: Having access to Internet and mobile-based marketing and trading platforms makes it easier for African communities and countries to develop economically, and to trade internally and internationally. Education that focuses on the needs of African citizens stimulates local businesses, and African people tell me that they want to be involved in building their own digital industry. They’re proud to be digital creators, not just passive consumers of content from developed nations. Digital industries have relatively low entry barriers, provided you have access to smart mobile devices and the Internet.
In Nairobi, the capital city of Kenya, we’ve partnered with business incubator iHub to help stimulate the developer community. iHub provides an open innovation space with a dedicated fast Internet connection and free membership to upcoming entrepreneurs. Initiatives like this help drive job growth and create a snowballing economic benefit as start-ups are founded and help to build Africa’s digital industries.
• Promoting gender equality: One of the United Nations’ Millennium Development Goals is to eliminate gender disparity in education by 2015. One of the challenges is to bridge the Internet gender gap. On average across the developing world, nearly 25 per cent fewer women and girls are online than men and boys, and this gender gap climbs to above 40 per cent in Sub-Saharan Africa. More widespread access to the Internet creates opportunities for empowering female citizens to participate fully in education and the economy, helping to drive growth across Africa through the creation of new enterprises and by increasing the size of the online consumer base.
Providing the telecommunications infrastructure that underlies this transformation has its challenges. Africa is a very diverse continent. Highly developed cities can be close to rural areas where electricity is unavailable. While smartphone adoption is strong and broader mobile device penetration is on the rise, the infrastructure cost can be huge, so Africa is finding its own unique solutions for telecommunications, using the resources it has available to provide communications for all.
Operators all over the world are trapped between falling revenues and rising costs, although in Africa the problem is particularly acute. Average revenue per user (ARPU) is approximately one-third the level of Western Europe. The revenues are under pressure too, because competition is increasing and the growth potential now comes from lower income households. That makes it difficult to invest proactively in building the network, especially in rural areas where handset ownership is more limited, and people tend to receive more calls than they place.
At the same time, over the top (OTT) service providers are quickly becoming established in the region. These services use the underlying telecommunications infrastructure to provide data services, putting immense strain on the network but not returning any of their revenues to the operators. No wonder operators feel threatened: their share of the data service revenues is declining, while their networks are becoming more congested and their costs are rising.
For operators, there is an opportunity to fight back by adding more intelligence and flexibility to the network, so that they can create new revenue streams, and make future investments possible.
A way to reduce the backhaul over the network is to use smart cell technology, which brings intelligence to the mobile base station. In the past, the base station has been used purely for sending and receiving radio signals, but smart cell technology enables it to cache mobile content, and deliver it from there to end-user devices. It could be used, for example, to store information of relevance to a particular community, so that it can be accessed on mobile devices directly from the base station, without needing to go across the network. For information that is accessed repeatedly within a particular geographic area, having the data cached locally can dramatically cut the cost of serving it, and improve the quality of experience to mobile data users.
One approach is that taken by the Altobridge Lite-Site, which is an example of smart cell. It provides 2G and 3G mobile connectivity for rural and remote communities with between 500 and 2,500 subscribers. Because there is limited electricity infrastructure outside urban areas, it uses solar power, and to get around the lack of fibre, it uses satellite transmission for backhaul. The Lite-Site interoperates with mobile operators’ existing core network, ensuring management and control of the customer relationship remains with the operator at all times.
A key innovation is that local calls are switched locally, so they don’t travel over the core network. Also, Data-At-The-Edge™ technology allows mobile content to be cached at the small cell. That extra intelligence means the operator saves the significant cost of backhaul over the satellite network, while at the same time improving the quality of the voice call. Backhaul is one of the two major operating costs in remote communities, equal to power and four times the cost of maintenance or site rental. To further optimise the backhaul link, the lite-site transits zero traffic over the link unless and until a call is generated. In addition, compression features are used to deliver overall backhaul savings of up to 86.3 per cent. Combined with solar power, Lite-Site cuts total site operating costs by half, making it commercially viable to serve unconnected isolated communities than before.
In South Africa and other countries where the network infrastructure is more evolved, there are opportunities to create new revenue streams using a strategy known as software defined networking (SDN). Telecommunications networks traditionally are made up of highly specialised components (such as routers and base stations) based on proprietary technology. The concept of SDN is to replace these devices with software instead. Because the software runs on standardised virtual servers, you can easily allocate more or less resources to it in line with demand, so you can increase bandwidth at times of high activity (such as an election), and transfer resources in from lower priority network activities (such as billing).
Companies like Aepona enable operators to offer their network features to developers, so they can make applications that integrate tightly with the communications infrastructure. As such, they give operators the chance to turn their current rivals into partners, and to combine the partners’ creativity with their own technology to create compelling new applications.
Infrastructure like this makes it possible for mobile communications to have a transformative effect on the lives of people across Africa, laying the foundations for what could be one of the world’s biggest digital economies.