Village Connection Local Switching - VTT · 2015-01-09 · Customer Confidential 7 © Nokia Siemens...

Customer ConfidentialVC / April 20091 © Nokia Siemens Networks

Village ConnectionLocal SwitchingAffordable connectivity for rural villages

October 2009

Customer ConfidentialVC / LCS April 20092 © Nokia Siemens Networks

Content

• Market outlook• Village Connection

– Architecture– Business Model

• How to use Financial Instruments– Principle


Market Outlook


Nokia Siemens Networks

• 60,000 people in more than 150 countries600 Communications Service Provider customers• World’s second largest telecommunications supplier• Every second we touch the lives of millions and millions ofindividuals.


Towards the 5 Billion Milestone

Mobile phonesubscriptionsglobally,millions

Source: Nokia0

-92 -93 -94 -95 -96 -97 -98 -99 -00 -02-01 -03 -04 -05 -09

200

400

600

800

1 000

1 200

1 400

1 600

1 8002 000

2 2002 400

2 600

2 800

3 000

-07

4 billionin 2009

4 billionin 2009

Global penetration>50%

-15e

5 billionin 2015

5 billionin 2015

3 billionin 2007

3 billionin 2007


.6% growth in GDP

An increase of10 mobile phones per 100 people


Affordability is the key reaching the next billionmobile consumers

Global Income Pyramid. Adapted from Nokia Worldmap

1$/day

2$/day

4$/day

4-40$/day

>40$/day

HSPA,WiMAX…

Voice, Internet/IPIP connectivityaffordability barrier at1.5bn

Voice, no Internet/IPVoice affordabilitybarrier at 2.5bn

GSM solutions,Village

Connection… No Voice,Internet/IP2.7 bn people

Customer ConfidentialVC / LCS April 20098 © Nokia Siemens Networks© 2008 Nokia V1-Filename.ppt / YYYY-MM-DD / Initials8

Livelihood and Life Improvement Services are HighlyRelevant; Entertainment has the Widest Appeal

Livelihood

AgricultureLivelihood

AgricultureLife improvement

EducationLife improvement

Education EntertainmentEntertainment


TCO < USD 5 enables the majority of the lower-income consumers to use mobile communications

US

dol

lars

0

5

10

15

20

25

Average 10.88 US dollars

Hon

dura

sIn

dia

Bang

lade

shPa

kist

anU

zbek

ista

nIn

done

sia

Sri L

anka

Mad

agas

car

Chi

naG

uine

aM

ongo

liaM

alay

sia

Para

guay

Thai

land

Suda

nC

ambo

dia

Jord

anM

aurit

ius

Egyp

tG

uate

mal

aVi

etna

mEt

hiop

iaG

hana

Kyrg

yzst

an Iran

Tajik

ista

nPh

ilipp

ines

Tuni

sia

Alg

eria

Hai

tiBo

tswa

naBo

livia

Sene

gal

Syria

Keny

aM

oldo

vaE

l Sal

vado

rG

eorg

iaEc

uado

rU

rugu

ayU

gand

aAr

men

iaM

exic

oC

olom

bia

Nam

ibia

Swa

zila

ndSo

uth

Afric

aLe

soth

oD

om. R

ep.

Côt

e d’

Ivoi

reAr

gent

ina

Mal

awi

Zam

bia

Chi

leC

amer

oon

Nig

eria

Tanz

ania

Kaza

khst

anC

had

Ango

laC

ongo

Guy

ana

Mor

occo

Burk

ina

Faso

Turk

eyAz

erba

ijan

Gab

onN

icar

agua

Today twelve countriesreach the monthly TCOtarget level.In 2007 there was only fourTCO high performers.


Village Connection


Village Connection Milestones

1. Idea created October 20032. First Installation December 20053. First network December 20064. Commercial launch May 20075. 1st release December 20076. 2nd release October 20097. 3rd release 3Q/2010


Lean approach for rural coverage:Village Connection

GSM Access Point in a village X• Wide area coverage with

minimal site cost• Calls in village connected

locally• Cost-effective IP connectivity

for long-distance calls• Core network maintains control:

regular charging and services• Option of Internet Kiosk: shared

internet access for villagers

OptionalSolarPanel

BatteryVoice& SMS

InternetKiosk

Up to 80% less site CAPEXMinimal OPEX


Calls within village are switched locally

GSM MS

GSM MS

GAP 2

GAP 1 GSM MS

Rest of the world

Intra-village calls

Rest of the world callsCalls between GAP

IP/Ethernet

MSC

ACBSCE1

• GAP switches traffic locally for subscribers in the village: only signaling takestransmission bandwidth

• Cost-effective IP connectivity for backhaul• Spare transmission capacity can be used for shared or mobile broadband• Sufficient coverage due to excellent radio performance of Flexi BTS


Village Connection in the field

Operator 3

Operator 2

Operator 1Village Connection

Mobile World Congress 2008, Barcelona14 © Nokia Siemens Networks


Optional host business model makes operatingvillage networks easier

VoiceSMSGPRS, EDGE

Village

Hostagreement

User

UserUser

Internetkiosk

All charging options supported

SharedInternetaccess

Internet

Village 1GAP host

GSMoperator

Village 2 Village 3

Host role:SitemaintenanceSecurityDistribution


OtherInterconnect(roaming)

Host business modeldecreases operator’s OPEX

Distribution• Lower storage and

distribution costs

Network operation & maintenance• Smaller site rental costs• Reduced power maintenance costs• Efficient site security• Spare parts same as in rest of network

Customer service & care• Smaller SIM

activation costs• Reduced subscriber support

costs

Marketing and sales• Reduced shop leases• Lower customer

acquisition costs

*Data based on: Pyramid study 2006, example statistics of OPEX structure, six operators innew growth markets

business model relatedsavingstechnology relatedsavings


How to Finance Franchise Business Model


Why Distributed Business Model?

1. Capital stream from developedareas to rural

2. Job creation in rural communities3. Support existing communities,

increasing trust


How to do it?

1. Using large international funds– Providing friendly loans for target country

2. Having a target country based organization– Purchasing and importing equipment– Keep equipment on their balance sheet– Find local entrepreneurs– Support entrepreneurs

3. Local entrepreneur– Ready business model– Working equipment– Friendly contract


Africa Business Landscape

Electricity– Mobile operator is the largest diesel

distributor in many African Country– Curiosity for new technologies

Security– Community involvement

Culture– Different languages

Resources– Time as an unlimited resource– Good intention– Support the growth of African

companies


The Risk of New Technology

Profit

Inve

stm

ent

Loss


Thank you

Village Connection Local Switching - VTT · 2015-01-09 · Customer Confidential 7 © Nokia Siemens...

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