RURAL TELEPHONY

BY
SYNDICATE NO. - 5
 AGENDA
• Introduction to Rural market
• Consumers Expectation
• The RITE way
• Technologies
• SWOT analysis
• QoS Parameters
• Global trends
INTRODUCTION
 Recommendations of TRAI for Rural Telephony

There is large differential between rural and urban tele-density in India. Also the
Indian rural market is very different. The cable TV in India has more penetration than
telephones. The villagers can have substantial purchasing power if the price of their
produce is right. In order to provide momentum to the rural telephony, TRAI
recommended :
• No prior SACFA clearance for deployment of towers upto 40 m. in rural areas.
• No spectrum fees for usage of CorDECT and similar technologies in rural areas as
well as for usage of 450 MHz.
• No right of way charges for networks in rural areas.
In order to offer financial incentives to service providers in the form of coverage of
partial cost of shared infrastructure and license fee and spectrum charge reduction
based on the number of rural base station locations, TRAI proposed change from a
universal obligation (USO) model to one where incentives are given for rural networks
which are as follows:-
• Sharing of infrastructure to receive support from USO.
• Discount in Annual License Fee and Spectrum Charges linked with Rural Coverage.
• Supporting backbone infrastructure through USO fund
 Specific Policy Thrust
1. “Mission Better Communications”
2. NTP-94
3. New Telecom Policy 1999 (NTP-99) :-
The most important landmark in the process of telecom reforms was
NTP 99 which was made effective from 1st April 1999. This paved
the way for change-over from fixed license fee to revenue sharing,
migration of existing operators to the new regime - thus resolving
their long-standing difficulties, strengthening of Regulator (TRAI),
opening of the National Long Distance, corporatization of telecom
services, and establishment of Bharat Sanchar Nigam Limited (BSNL)
etc. The policy had also stipulated several specific and time-bound
targets in teledensity, rural telephony, etc.
 Demographics : Rural vs Urban
• 732 million people living • 296 million people
across ~630000 villages • Accounts of 55% of
• Accounts for over 45% of GDP of India
GDP of India • Has 23.32 mn middle to
• Accounts for over 40%of high income house hold
total consumption pie • Average household of
• Has 21.16 mn middle to 4.8 person
high income household
• Average household of 5
person
Key Enablers For Demand In Rural Areas

1) Distribution
2) Handsets
3) Service pricing
4) Operation and maintenance
5) Connectivity
6) service
 I. Distribution
• Reach to hinterland remains significant
challenge for the operators
• Innovative model bring such as Bharti -IFFCO
tie up
• Models involving FMCG should act as catalyst
to distribution
• Cell site infrastructure should be another
source of distribution
 II. Handsets
• Low cost handsets still necessity to drive
growth
• Customized handsets with vernacular content
• Customer education
• Micro financing
• Solar handsets
• Mobile to transition from community device
to household device
 III. Service pricing
• With ARPU of rural subscriber projected at under
RS 100 there still need to drop tariffs
• Revisiting high duties and levies

IV. Operation And Maintenance

• Biofuels and renewable energy
• Wind mill and solar based cell sites
• Transportation system
• Availability of reliable power supply (diesel)
 V. Connectivity
• Non availability of sufficient back haul capacity
• Total number of BTS to touch 600000 by FY 12
• Passive infrastructure sharing
• Intra circle roaming
• Active infrastructure sharing
 Passive Infrastructure Sharing

• Benefits to operator
• Benefits to rural India
 Benefits to operator
• Operators able to trap the growth potential in
rural market
• Reduction in huge CAPEX and sharing of
OPEX cost promoting operators to expand in
rural India
• A boost to achieve the primary objective of
bridging “urban rural divide” promoted by
government.
 Benefits to rural India
• Help in reducing digital divide and aim of
connecting rural India and urban India
• Provisioning of rural specific value added
services aimed at promoting growth of rural
India services like health, education and
information to farmers.
• Reduced minute
 Rural Penetration the RITE way
RITE way is the right way to approach for any kind of business. Now we take
one by one the components of the RITE with respect to the rural telecom.

• R- Relevant Applications
The applications should be made in such a way that the rural India connects
itself to it.
• I- Infrastructure
This is portion where most of the cost is incurred. Hence every possible
measure should be
• T- Technology
Technology is the main component of any telecom company. It should be
selected in such a way to which can provide the best service.
• E- Entrepreneurship
The telco’s should look for small or big local entrepreneurs interested in this
field as they will be having a good knowledge about their local market.
 Technologies
• Optical Fibers: O.F are used as communication highway from one metro city to
another for faster communication. They can also be used for rural communication
wherein one can connect an intermediate station to the main highway by branch
routes and drop and insert systems. The enroute intermediate stations can be used
as collection centers for the Village Telephones (VT) distributed all around up to a
distance of 10-15 Kms or even to 40 Kms.

• Radio Sharing System (RSS): This is a radio frequency sharing system with two
frequency pairs serving 15 VTs. Thus no. of VTs per channel=7.5 For low traffic
density, the 2 radio channels may be used for 32 VTs also.

• Wireless in Local Loop (WILL): This is also called radio in the loop (RITL) or fixed-
radio access (FRA), WLL is a system that connects subscribers to the public
switched telephone network (PSTN) using radio signals as a substitute for copper
for all or part of the connection between the subscriber and the switch.
Contd…..
• Wireless: Government has given licenses in different bands for GSM and
CDMA deployments. With the help of subsidies from USO fund the public
and private operators are deploying their networks in rural areas. We have
seen this deployment has increased the rural penetration. With the advent
of 3G the propel in rural areas who want to access broadband on handset
can avail the facility which will help in fulfilling government target of 20
million broadband subscribers till 2010.

• Wimax: This is also a wireless broadband technology. The wimax standards

802.16d (fixed wimax) and 802.16e (mobile wimax). In rural areas BSNL has
given contract for wimax station deployment to Huawei. Fixed wimax is a
very good way to fulfill government’s target of 20 million broadband
subscribers till 2010. People can avail facilities like e-Education, content or
information in regional languages.
SIX RURAL LIVING CHALLENGES
 How Communications Can Help???
• Lack of transportation : Coordinated rural transportation based on mobile
information delivery, will increase convenience and allow users to find reliable,
regular and affordable transportation ‘on-demand’.
• Difficulties in managing commercial transactions: Micro-commerce ventures like
mobile ordering, payments and delivery requests can all help isolated small-scale
entrepreneurs in remote locations.
• Lack of healthcare services: Telecom and broadband intervention will allow
doctors, nurses and midwives to stay in closer contact with patients.
• Ignorance of governance policies: Rural governance services giving access to
citizen data will allow the rural population to be more informed about national
level developments and reduce the urban-rural divide.
• Lack of effective education: Rural education benefits from the availability and use
of multimedia across national regions.
• Shortage of opportunities in infotainment: Mobile and broadband allows sharing
of infotainment, opening up new streams of rural content creation and distribution.
 Immediate Effects of Improved Rural
Communications
• Reducing rural to urban migration
• Enabling immediate access to assistance
• Access to market and price information
• Efficiency & accountability of government
operations
SWOT ANALYSIS
• 1. Major telecom players in the field • [Link] passive
• 2. USO fund- Universal Service infrastructure cost
Obligations Fund • 2. Insufficient power
• 3. Customize low end mobile phones supply
• 4. Approval for sharing of active • 3. Skill challenges
infrastructure • 4. Lack of infrastructure in
rural areas

Weaknesses
Strengths

Opportunities

Threats

• 1. Huge untapped rural market • 1. Lack of awareness

• 2. A massive economy • 2. Extreme remote
• 3. Bundled mobile phones location
• 4. Various schemes • 3. Unpredictable
government rules
• 4. Low ARPU
INITIATIVES TAKEN BY TELCOS AND
INSTRUMENT MANUFACTURERS
RCom:
• BharatNet Plan
• Grameen VAS
• M2M (Machine to Machine) solutions
Reliance Communications, entered into a marketing JV with Krishak Bharati
Cooperative Limited (KRIBHCO) for selling its products in rural India.
Idea Cellular:
• Idea Cellular entered into alliances with the Department of Posts. The post offices
in Kerala will sell Idea’s specially-designed stamp-sized recharge vouchers.
Bharti Airtel:
• Airtel entered into a joint venture with the Indian Farmers Fertiliser Cooperative Ltd
(Iffco) to offer specifically designed products and services.
• The company has set up Airtel Service Centres in rural areas to provide services and
handle customer queries and complaints.
• The company has also tied up with Nokia to launch an educational initiative in
order to give rural users a live experience on mobility services
Nokia:
• Mobile phone manufacturer Nokia, which had earlier launched a basic handset
with a torch and an alarm clock, has now gone a step further with Nokia Life
GLOBAL TRENDS
QUALITY OF SERVICE (QOS)
PERFORMANCE
1. The performance of wireline service providers improved in respect of Time taken
for refund of deposits after closures.
2. The wireline service performance has deteriorated in restpect of the following
parameters:
a. Call Completion Rate (in local network)
b. % Faults repaired by next working day
c. Mean Time to Restore MTTR
d. Metering and billing credibility – postpaid
3. The performance of the wireless service providers improved w.r.t. the following
parameters:
a. SDCCH/ Paging Chl. Congestion
b. TCH Congestion
c. Worst affected cells having more than 3% TCH drop (call drop) rate
d. Call Set-up Success Rate (within licensee's own network)
4. The performance of the wireless service providers has deteriorated according to the
following parameters:-
a. Connection with good voice quality
b. Metering and billing credibility - post paid
c. Resolution of billing/charging/validity complaints
EVALUATION OF IMPEDIMENTS
BEST PRACTICES FROM
PROMOTION TO PRICING
• Promotion: Reaching rural dwellers through local cultural activities such as
indigenous drama performances or endorsements by respected community
elders has proved to be effective.

• Product Placement: Service providers such as banking and insurance companies

already have a network of trained customer service personnel and linking with
these existing agencies can provide a cost-effective way to access remote
markets. Other possibilities include partnering with post-offices, utility suppliers
and educational establishments.

• Brand positioning: It is important to be an early entrant because a single brand

can come to represent a product or service category for many rural consumers. A
presence in large village congregations such as fairs and weddings will help to
gain brand visibility with a large segment of the rural population in a single place.

• Pricing: To be adopted, a communication service bundle must contain

information relevant to people’s livelihoods, such as market data, finance
availability or potential sales data. Reducing entry barriers is essential, with
successful practices including per second charging and giving away SIM cards
loaded with free minutes.
E-GOVERNANCE FOR RURAL
INTERNATIONAL CASE STUDY
THANK YOU!!!