Home India 2013 Rural communications – more talk than action

Rural communications – more talk than action

by david.nunes
Rahul SharmaIssue:India 2013
Article no.:2
Topic:Rural communications – more talk than action
Author:Rahul Sharma
Title:President of TEMA, and Director, Corporate Strategy, Vedanta Group
Organisation:TEMA & Vedanta Group
PDF size:210KB

About author

Mr. Rahul Sharma, is Director, Corporate Strategy, Vedanta Group, and President of TEMA (Telecom Equipments Manufacturers Association of India).
For 20 years he has been in Sterlite and other ICT industries looking after projects, marketing, operations and specialy known for system intergartion, optical fibre and cables. Now he is Director, Vedanta Group of Industries ( which includes Sterlite)
He is also Vice Chairman of CMAI (Communications Multimedia Applications Infrastructure) Association of India. He is actively involved in policy formulations and development of industrial policies specially related to telecom, mobile, ICT, infrastructure, environment management, rural development, international trade and commerce. He frequently presents papers internationally on topics of public concerns like telecom IT, environment management and such.
Mr. Rahul Sharma is a Graduate in Electronics and Communication Engineering, and a Post Graduate with an MBA, Marketing.

Article abstract

The density of rural telecommunications – more costly to install and less profitable to run -is much lower than in urban, more developed, regions. Indian operators have difficulty reaching and profitably serving rural communities. India has many consumers in distant, difficult to access regions, with almost non-existent infrastructure. Population density is low, per capita income is lower, and potential ARPU (average revenue per user) is among the world’s lowest. Equipment manufacturers have difficulty providing cost-effective equipment for this sort of market.

Full Article

The availability of open, accessible, and relevant communications is an undeniable prerequisite for national development, social fulfilment and human dignity. The better the means of communication, the greater the opportunities a society will generate. Let us face it. The essence of communications, the need for unfettered exchange is in the very DNA of each and every person on earth.
More than 2.5 billion people, about 40 percent of the world’s population, live in the rural and remote areas of developing countries where access to telecommunications is still very limited. The entire world, the UN/ITU and governments, gives high priority to communications and connectivity for rural and remote areas. The Valletta Action Plan (1998), the Istanbul Action Plan (2002) and the WSIS Plan of Action (2003) all confirmed the need to promote basic telecommunication, broadcasting and the Internet – all essential tools for the development of these less fortunate areas.
However, rural communications is still very far from what it should be. Why is this so? Thanks to mobile technology, there has been tremendous growth of tele-density in urban areas, but the digital gap between rural and urban areas has shamefully widened.
Initially, there were several ways to communicate. At first, telecommunications was thought of as an essential need for citizens that governments were duty-bound to provide. Hence, governments created their own communications monopolies, invested heavily and started providing fixed line phones. Wireless communications technology, was mostly reserved for the defence sector. There was no intention of making profit out of these communications services, since they were public services. Nevertheless, for many years, just getting a phone was a matter of pride worldwide.
Much later, the use of mobile technology expanded to include the civil services sector as well. The private sector saw profit and started lobbying for privatization. Governments, throughout the world, were pressured to open up the market and privatise these services. The private sector was tremendously successful; it increased the reach of the networks and multiplied the subscriber base enormously.
Nevertheless, the growth of rural communications – more costly to install and less profitable to run – was much slower than in urban, more developed, regions. Broadband service in rural areas suffered as well. So, throughout the world, people looked back to their governments to help build broadband capacity in rural regions.
To boost broadband, in India, government after government announced plans for investment in optical fibre networks and for increasing the availability of e-services. Nonetheless, these big government investments for rural communications are still awaited.
Rural communications aims to give rural people the means to access the information they need to make informed decisions, to help them acquire relevant skills and improve their livelihoods and to connect them to family, friends, goods, services and business opportunities around the globe.
High quality rural communications will bring countless, immense, advantages and benefits. It will enhance the population’s participation in community affairs and popular mobilization, build confidence, raise awareness, disseminate knowledge, change attitudes and behaviour, alter lifestyles and mentality (e.g., female foeticide, rapes, etc) and foster rapid, effective, decision-making.
There are great barriers to overcome. Reaching rural communities is difficult – and profitably providing high-quality communications services, even more so. India has great numbers of consumers scattered across its countryside. Many reside in far-away regions, with physical barriers making them difficult to access. In many regions, the population density is low, and the per capita income is lower, leading to low ARPU (average revenue per user). There are a great many languages spoken in India, so local language content and services are more important, but more difficult and costly to provide. Generally, infrastructure is poor; there are areas without electricity, paved roads, telecom facilities, postal services, TV, print media, indeed, without any of the services and facilities that urban dwellers take for granted.
Rural communications faces challenges with regard to backhaul connectivity, reliable power supplies, suitable low power equipment, high costs for low capacity equipment, lack of skilled manpower for installation, maintenance and the like. Networks designed and optimised for a high ARPU, high-density user bases, in areas with good basic infrastructure, are not practical in rural areas. Finally, the high capital and operating expenses in rural areas affect profitability, competitiveness and the willingness of the private sector to invest.
Initially, telecommunications were a question of need. Today, as a private sector endeavour with both shareholders and the market to satisfy, innovation – better, cheaper and faster – has become the primary focus.
The question is not what power or infrastructure is available – it’s the other way round. The need for technology should be first; power and infrastructure should be secondary. Researchers often see the world as one market and seek technologies to make the most money in the shortest time. The question really is, what technologies suit rural communications. What about technologies like MARR, (multi access radio relay) corDECT (a wireless local loop standard developed in India) – where to they fit?
Technical standards are, basically, devised by the technology inventors; most, it seems, are largely suitable for urban areas and the elites, not the less fortunate populations of rural and remote areas.
We know of Apple iPhones, iPads, 4G, 5G, but have we ever heard of minus 1G for rural areas or a 5 US dollar handset for the masses in rural regions? Fortunately, there are groups such as GIFSI and ITU (UN) who have worked hard to create realistic standards that meet rural needs.
So how can we formulate specific standards that ensure that the world’s rural populations are not left out of the global family?
The global market has limited the number of telecommunications equipment suppliers in the world. Manufacturers depend upon economies of scale to reduce costs; until now, manufacturers of most advanced rural market products do not produce sufficient quantities to reduce costs significantly. It is also difficult to provide highly qualified after sale service and maintenance in large scattered rural areas.
Most of the global telecom leaders have R & D teams working to develop innovative rural communications equipment. Given the difficulties in rural markets, do global manufacturers need new global strategies or would they do better by supporting local manufacturers?
Thanks to mergers and acquisitions, there are few remaining service providers for either fixed line or mobile phones. Service providers make good on technology provider hype to satisfy the customers. Service providers are necessarily looking for profits to both satisfy their shareholder and stay alive.
Unfortunately, rural communications is a difficult, low profit, business and many service providers would rather avoid the struggle. Would a separate class of operators dedicated exclusively to rural areas bring hope and progress to this sector?
Multi-government funding is one of the possible, much discussed, solutions. A number of agencies dedicated to the development of rural areas – the UN’s ITU has done much in this respect – organised many programmes to provide funds and incentives to resolve this problem. Moreover, almost every country has a universal service obligation fund (USO) for telecom.
Panchayats (village-level self-governments in India) and rural development departments have worked and invested to improve health services, roads, employment generation, electricity, education, drinking water, housing, alternate energy, etc. So should the government and its departments deploy telecom, mobile and spectrum for commercial success or for social and economic development?
Despite all these programmes, in India, the government’s assistance in the telecom sector via the USO is limited to service operators. In the USA, when President Obama announced plans for broadband, he extended the assistance to the departments concerned with rural and agricultural development. So should India extend assistance under USO and other schemes to manufacturers, technology providers and local bodies for rural communications?
The major policy stakeholders are telecom operators, equipment suppliers and technology providers. The ministries – Communication, Infrastructure, Rural Development, Food and Agriculture, Science and Education – develop and implement communications policies. Media outlets – TV, radio, print, Internet, representatives of farmers’ or rural peoples’ organisations who formulate the communication needs of their clients, development organisations for policy advice and harmonisation of development interventions are among the significant groups that have a big stake in the outcome of policy decisions
Innovation is not a onetime thing; it is a continuous process, a tool that must constantly evolve with time and resolve the changing nature of the market, fashions or fad, the shifting tastes of people and, of course, to re-invent how we communicate and how we think.
Unfortunately, with technology we tend to concern ourselves more with its efficiency and usability than about its adoption and impact upon each and every level and group of our society.
Technology is not just an issue of resources and technologies, nor of hardware and software. It should also raise questions, inspire wise priorities and good policies; but this calls for intelligent leadership, transparent decision-making, and popular involvement.

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