Closing the Access Gap: Innovation to Accelerate Universal Internet Adoption - Caribou Space
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Closing the
Access Gap:
Innovation to Accelerate Universal Internet Adoption
Photo credit:
CLOSING THE ACCESS GAP: INNOVATION TO ACCELERATE UNIVERSAL Morgana Wingard
INTERNET
/1
for USAID (Tanzania)
ADOPTIONFunded with Support From 2\ CLOSING THE ACCESS GAP: INNOVATION TO ACCELERATE UNIVERSAL INTERNET ADOPTION
Acknowledgments
This paper is the result of a collaboration among Caribou Digital, the Digital Impact
Alliance (DIAL), and the U.S. Agency for International Development (USAID).
Caribou provided research and analysis for the paper. DIAL’s Insights and Impact team
funded the work, which was led by Beth Gertz. DIAL team members Kate Wilson,
Andrew Axelrod, Syed Raza, and Jeff Wishnie provided input and support for the
project. USAID’s Digital Inclusion team, including John Garrity, Graham Gottlieb, and
Tom Koutsky also contributed, as did DIAL advisor Michael Kleeman from University
of California San Diego.
We would like thank DIAL’s Access Advisory Group members, who have generously
shared their insights and knowledge to inform this report: Miriam Altman (formerly
Telkom), Michael Best (Georgia Institute of Technology), Jane Coffin (Internet
Society), Jonathan Dolan (USAID), Paul Garnett (Microsoft), Sonia Jorge (Alliance
for Affordable Internet), Lauren Kahn and Charlotte Smart (UK Department for
International Development), Lars Reichelt (RA Advisors), and Arjuna Sathiaseelan
(University of Cambridge).
We also would like to thank individuals from many innovative internet access businesses
who kindly contributed to the paper’s research: Peter Bloom (Rhizomatica), James
Cemmell (Inmarsat), Andy Halsall (poa! Internet), Kurtis Heimerl (Endaga), Tim
Human (Project Isizwe), Raina Kumra (Gigato), Colleen Mallahan (Google Project
Link), Paul Talley (ViRural Africa), Steve Song (Village Telco), Pat Wu and Ryan
Wallace (Facebook), and Elaine Weidman-Grunewald (Ericsson).
The author’s views expressed in this publication do not necessarily reflect the views
of the United States Agency for International Development or the United States
Government.
Suggested citation: USAID, Caribou Digital and the Digital Impact Alliance.
Closing the Access Gap: Innovation to Accelerate Universal Internet Adoption.
February 2017.
CLOSING THE ACCESS GAP: INNOVATION TO ACCELERATE UNIVERSAL INTERNET ADOPTION
/3Table of
Contents
4\ CLOSING THE ACCESS GAP: INNOVATION TO ACCELERATE UNIVERSAL INTERNET ADOPTION1 Preface........................................................................................................................6
2 Executive Summary................................................................................................... 7
3 The Current Access Landscape................................................................................. 11
3.1 Current forms of access and adoption
3.2 Convergence of trends and technologies driving
the emergence of new access innovations
4 Last Mile Access Innovations.................................................................................. 16
4.1 Models to extend infrastructure
4.2 Complementary technologies
4.3 Improving value
5 Developing a Portfolio of Approaches to Advance Internet Access..................... 31
5.1 Identifying options based on market context
5.2 Country example: A portfolio of access innovations in Kenya
6 Conclusions and Implication for Action................................................................ 35
6.1 Key themes
6.2 Implications for action
6.3 Conclusion
Appendix 1 Catalogue of access innovation............................................................ 42
Appendix 2 Case studies of select access innovations.............................................47
Appendix 3 Backhaul innovations and case studies.................................................78
Profiles Mawingu Networks.................................................................................................... 21
ViRural Africa............................................................................................................ 23
Rhizomatica............................................................................................................... 25
Village Telco.............................................................................................................. 27
poa! Internet.............................................................................................................. 29
Gigato........................................................................................................................30
Figures New access models grouped by ‘access challenge’................................................... 17
Factors that influence viability of different access interventions.......................... 32
llustrative map of access innovations in Kenya........................................................ 32
Tables Technology and Business Model Characteristics of Access Innovations................. 18
Key Considerations Unique To Each Community Scenario......................................... 34
Box 1 The anatomy of a network......................................................................................... 15
CLOSING THE ACCESS GAP: INNOVATION TO ACCELERATE UNIVERSAL INTERNET ADOPTION
/51 Preface
“Significantly increase access to information and
communications technology and strive to provide
universal and affordable access to the internet in
least developed countries by 2020”
– Sustainable Development Goal 9c
Roughly four billion people globally have yet to adopt the internet. By including
internet access in the Sustainable Development Goals (SDGs), the global community
is committed to expanding access and promoting adoption.
As governments, donors, think tanks, • What is required to foster a more
and others try to understand how enabling environment for promising
to achieve the SDGs, a significant access and adoption innovations?
body of work on barriers and progress
The analysis suggests that although
toward internet access and adoption is
a “silver bullet” is unlikely to emerge,
expanding. The Digital Impact Alliance
there is a clear role for business model
(DIAL) commissioned this paper to
and technology innovation, and the
understand potential business model and
financing mechanisms to support
technology innovations for accelerating
such developments.
access and adoption of mobile phones
and the internet in emerging markets and The analysis also suggests that although
inform the development community of a good deal of government, industry,
innovations underway, as well as lessons and development community activity is
emerging from these efforts. Questions underway, independent, uncoordinated
examined include: actions are unlikely to succeed in solving
this development challenge. Instead,
• Are these innovations purely
coordinated collective action is needed.
operating at the margins, or might
Working together, the global community
some have the potential to disrupt
can make “universal and affordable access
traditional business models?
to the internet in least developed countries”
• What role do such innovations play
a reality.
in a strategy to achieve broader
access and adoption within an
emerging market?
6\ CLOSING THE ACCESS GAP: INNOVATION TO ACCELERATE UNIVERSAL INTERNET ADOPTION2 Executive
Summary
“…Entirely new approaches and innovative business
models may be needed …to achieve universal coverage
of broadband.”
The Broadband Commission. The State of Broadband. 20151
Mobile and internet services have the power to transform lives, offering life-enhancing
financial, health, and many other services, as well as the simple ability to express oneself
to one’s family and community. Yet millions of people in emerging markets lack access
to these services, and even those who have access often do not adopt services, because
of constraints arising from limited affordability, perceived value, and ability to use
the services. The resulting access and adoption gaps threaten to exacerbate existing
economic and social inequities facing low-income, rural communities in emerging
markets, particularly among women and girls.
The market alone will not close the of millions of people unconnected as
access gap. Over time, industry they reside beyond the point at which
investment in mobile and fixed networks current service delivery, via the dominant
in the developing world may increase model of network operators, makes
and extend existing network coverage, economic sense.
but will likely not expand to connect
This is where innovation has a role to
marginalized populations in unconnected
play. A growing set of non-traditional
and under-connected geographies
service providers are testing new business
because of the high capital and
models and technologies to reach
operational costs and low profit potential.
consumers who otherwise might reside
This market frontier, or the point at
beyond the market frontier. Thus far,
which economic incentives to expand and
few, if any, of these innovations have
deliver connectivity fall to zero, will for
yet to reach the type of scale that are
the foreseeable future leave hundreds
1. Broadband Commission for Sustainable Developement. The state of broadband 2015: Broadband as a foundation for
sustainable development. Geneva: ITU; 2015. Available at: http://www.broadbandcommission.org/publications/Pages/
SOB-2015.aspx
CLOSING THE ACCESS GAP: INNOVATION TO ACCELERATE UNIVERSAL INTERNET ADOPTION
/7substantially shifting the access and appropriate in specific markets,
adoption equations. These diverse efforts, but no single innovation will apply
however, are important as industry, in every context. Market dynamics,
governments, and the development geographic conditions, regulatory
community explore how to close this gap. constraints, and community
characteristics all play a role in the
To address the access gap, academics,
potential success of different business
technologists, and entrepreneurs, from
models and the applicability of
major Silicon Valley firms to start-ups
different technologies. To enable this
in rural Mexico, are testing new business
portfolio to emerge, governments,
models and technologies to extend
donors, industry and investors all have
the reach and affordability of mobile
a role to play in supporting greater
and internet beyond what the current
innovation and experimentation to
mobile footprints and business models
identify and accelerate scale-up of
support. Though these models all address
sustainable solutions.
the basic issue of internet access and
adoption, they approach the challenge in 2. An active community of innovators
quite different ways, providing a variety is implementing solutions, but many
of potential solutions that may or may require risk capital to fully explore
not be appropriate for a given market. alternative business models. The
A review of some recent and ongoing business case for last-mile innovations
efforts provides both a framework to for the most marginalized populations
help decision makers consider where is still to be determined given the high
innovation can best address gaps in their costs for deployment and currently
specific contexts, as well as some lessons low profit potential. To help support
and opportunities for action across the entrepreneurs innovating for the last
ecosystem. The following are the three mile, risk capital is needed to help
main conclusions: offset immediate infrastructure costs
but must be carefully structured
1. A portfolio of diverse, innovative
to avoid dependency. Although
access solutions is required to meet
industry will remain the chief
unique market contexts. A range of
source of investment in the sector,
innovative models are beginning to
governments, bilateral donors, and
serve communities at the base of the
impact investors have key roles
economic pyramid. It is unlikely that
to play in supporting innovation.
a single “silver bullet” will emerge
Governments, donors, industry,
to close the access gap for billions
and investors can all play roles with
of people across dozens of markets.
greater support through appropriate
Each model offers features that are
financing and risk capital, which
8\ CLOSING THE ACCESS GAP: INNOVATION TO ACCELERATE UNIVERSAL INTERNET ADOPTIONsupports testing of new business In addition to creating constructive
models and technologies. enabling environments to expand
traditional network connectivity in their
3. Greater collaboration and knowledge
countries, policymakers can consider how
sharing across the community, within
their policies and regulations encourage
bounds of market competitiveness,
innovation, as well as provide risk capital
can play a role in accelerating
in the form of grants or short-term
innovation. Both innovators and
subsidies to enable small companies or
investors alike require more actionable
social enterprises to test the viability
market intelligence (for example on
of potentially game-changing access
end users, geographic characteristics,
innovations. Access innovations are
existing infrastructure, and regulatory
blossoming in policy environments that
constraints) in order to tailor
foster competition, provide flexible and
different market models. The type
streamlined licensing, and are open to
of market data commonly used to
trials and experimentation. Innovators,
base investment decisions in mature
including start-ups and forward-looking
markets is more expensive and
traditional operators, can learn from
difficult to obtain in low-resource
prior telephony and internet expansion
environments. Most innovators,
efforts where history demonstrates that
particularly smaller actors, struggle
simply building infrastructure is not
to navigate regulatory, technical, and
enough; thoughtful distribution that
financial challenges on their own,
improves affordability and strengthens
as well as to understand and foster
the incentives and ability of low-income
the demand-side drivers needed to
end users to adopt service also is required
drive low income end user adoption.
to support economically sustainable
Both innovators and investors alike
models.
are hungry for better knowledge
and more data and what works for Bilateral and multilateral donors and
different models. Greater government other investors have an opportunity to
and donor investment to support accelerate adoption by providing risk
research and knowledge sharing can capital to enable promising, early-stage
help address these gaps and uncover innovations. Market-based finance will
these data. be the key driver of sustainable, large-
scale connectivity, but many potentially
IMPLICATIONS FOR ACTION
interesting models are at risk of being
To realize the potential growth and lost to the ‘valley of death’ between
adoption of innovation in this sector, proof-of-concept and positive cash
a range of market participants all have flow. Access advocates—comprising the
roles to play. growing set of global alliances, advocacy
CLOSING THE ACCESS GAP: INNOVATION TO ACCELERATE UNIVERSAL INTERNET ADOPTION
/9groups, academics, donors, NGOs, and
corporate policy shops—can enhance
their voices and effectiveness through
stronger coordination.
Finally, given the magnitude and
complexity of the challenge,
governments, innovators, donors,
and other investors, as well as access
advocates, may want to consider a more
coordinated approach to testing the
viability of these innovations, including
greater investment in testing such
models, and more structured approaches
to undertaking and sharing data and
insights. By establishing clear definitions
of success, identifying areas of respective
comparative advantage, harmonizing
research agendas, and improving
knowledge sharing, these groups can help
accelerate sustainable access for and
adoption by the underserved.
10 \ CLOSING THE ACCESS GAP: INNOVATION TO ACCELERATE UNIVERSAL INTERNET ADOPTION3 The Current
Access Landscape
Access to the internet (defined as the necessary conditions of network coverage,
affordable price levels, and user agency with skills, resources, and interest) can result
in economic and social benefits for wealthy and low-income consumers alike.2 The full
benefits of the mobile revolution will not be realized until all members of society have
access to networks and services that are relevant and affordable.
Industry will continue to play a key Given this, policymakers and regulators
role in extending traditional mobile play critical roles in fostering enabling
networks to the last mile, while environments that push the market
policymakers and regulators can focus frontier, expanding the market’s ability
on creating optimal environments for to serve lower-income, low-density
the market to expand as deeply across consumers who currently lack access or
a population as possible. Network see value in adopting services where they
coverage to some rural, or marginalized, exist. Even the most progressive policies,
communities may never make economic however, run up against the limits of the
sense to serve via traditional networks existing economics of traditional services.
and business models, however, even in This is the point at which business model
the most supportive policy environments. and technology innovation is required.
At some point in every market,
Governments, industry, donors and
commercial investment hits a “market
others with an interest in achieving global
frontier,” or the point at which economic
goals relating to phone and internet
incentives to expand and deliver service
access might consider a variety, or
fall to zero, where industry’s cost-to-
portfolio, of different solutions, whereby
serve each incremental new user—
policy facilitates the expansion of
much less to design service to meet
existing network coverage, while business
low-income, underserved consumer
model and technology innovations help
segments—intersects the willingness or
to reach rural, low-income communities.
ability of the new user to pay for service.3
2. See for example https://www.itu.int/ITU-D/treg/broadband/ITU-BB-Reports_Impact-of-Broadband-on-the-Economy.pdf
and http://www.worldbank.org/en/publication/wdr2016
3. World Bank. Telecommunications and Information Services for the Poor: Toward a Strategy for Universal Access.
World Bank Discussion Paper No. 432. April 2002.
CLOSING THE ACCESS GAP: INNOVATION TO ACCELERATE UNIVERSAL INTERNET ADOPTION
/ 113.1 CURRENT FORMS OF environments. Where service might
ACCESS AND ADOPTION be available, prices can be unaffordable
In developing countries, mobile networks to low income populations in emerging
are the dominant access technology, with markets. As a result, urban 3G population
mobile operators purchasing spectrum coverage is 89 percent but only 29
licenses, deploying networks of cell percent for rural regions.5 Although 2G
towers, and selling predominantly pre- coverage is widespread, global coverage
paid, airtime and data via agent networks. of higher speed 3G is lower at 70 percent,6
Mobile phones—basic, feature phones, and and 4G is 35 percent.7 As a result, even
smartphones—are increasingly available where low-income users are able to afford
and affordable. The combination of the service, they often face a far inferior
portability of a handset and broad network user experience, relying mainly on slower
coverage provides the user with mobility. 2G service. A recent GSMA report
estimates that compared to urban cellular
Mobile carrier networks have been site deployments, rural and remote tower
deployed globally over the last 25 site location can cost up to 30% more
years and the regulatory, technical, in CAPEX, up to 100% more in OPEX
and commercial structures such as (driven by increased energy and backhaul
broadband spectrum licensing are well costs), while serving 80% less users per
established. Cell networks provide wide site, and resulting in 95% less revenue.8
areas of coverage from single cell sites
compared with technologies such as
Wi-Fi; access to the internet is typically
unrestricted and open. Globally, 2G
coverage is widespread, with 90 percent
of the world's population covered.4
The business case for expanding coverage
into rural regions is challenging, however.
The high capital expenditure (CAPEX)
and operating expenditure (OPEX) costs
associated with mobile carrier networks,
including costly spectrum licensing
fees, lead to deployments focused on
densely populated, urban, and peri-urban
4. GSMA, “Closing the coverage gap – a view from Asia.” June 2015.
5. ITU. “ICT Facts and Figures - The World in 2015.” Posted at http://www.itu.int/en/ITU-D/Statistics/Documents/facts/
ICTFactsFigures2015.pdf. Accessed December 2015.
6. GSMA, “Closing the coverage gap – a view from Asia”. June 2015.
7. GSMA. “4G Networks to Cover More Than A Third of Global Population This Year.” Posted at http://www.gsma.com/
newsroom/press-release/4g-networks-to-cover-more-third-of-global-pop-this-year/. Accessed December 2015.
8. GSMA. Unlocking Rural Coverage: Enablers for commercially sustainable mobile network expansion. http://www.gsma.
com/mobilefordevelopment/programme/connected-society/unlocking-rural-coverage-enablers-commercially-sustainable-
mobile-network-expansion. July 2016.
12 \ CLOSING THE ACCESS GAP: INNOVATION TO ACCELERATE UNIVERSAL INTERNET ADOPTION3.2 CONVERGENCE OF TRENDS poa! Internet are blanketing Kibera
AND TECHNOLOGIES DRIVING in Nairobi with coverage from Wi-Fi
THE EMERGENCE OF NEW hotspots. Wi-Fi, especially free and/or
ACCESS INNOVATIONS shared Wi-Fi, can reduce the cost of
Fortunately, a range of business data usage, increasing the affordability
model and technology innovations for underserved demographic
are emerging in the marketplace that segments.
address supply and demand barriers to 3. Thirdly, the reach and capacity of
access and adoption along the network both international and national fiber
map. Academics, technologists, and networks are expanding. Where
entrepreneurs are testing new business financially possible, fiber makes last
models and technologies to extend the mile access innovations better, more
reach and affordability of mobile and reliable, less expensive, faster, and
internet beyond what the current mobile ideally, more open and competitive.
carrier footprints and business models Fiber is an enabler for new access
support. Four trends are converging innovations. For example, Google’s
to drive the emergence of new access Project Link provides fiber backhaul
innovations. as a neutral wholesaler, sharing
1. A proliferation of pilots and the infrastructure across multiple
demonstrations are testing new internet service providers (ISP)
business models and technologies. and mobile operators in parts of
(See Appendix 1 for headlines Uganda and Ghana. FibreCo in South
on a non-comprehensive set of Africa offers a similar open access
42 examples.) The wide range of network. This changing landscape
access innovations being tested whereby an operator does not need
and the number of pilots and trials to own international, national, and
increase the likelihood of uncovering local backhaul networks means new
sustainable, low cost access solutions. entrants can address specific parts of
the value chain.
2. Widespread access to Wi-Fi-enabled
devices, particularly mass adoption 4. Finally, global companies with
of smartphones, is enabling access significant scale and resources are
innovations that utilize Wi-Fi. testing new approaches to extend
Companies like Project Isizwe (see access to under and unconnected
Appendix 2 for case studies) have populations. Microsoft is leading the
been piloting free Wi-Fi to increase charge on TV white space (TVWS),
internet usage among first-time users particularly with its partnership with
in South Africa, while companies like Mawingu Networks.
CLOSING THE ACCESS GAP: INNOVATION TO ACCELERATE UNIVERSAL INTERNET ADOPTION
/ 13Google is testing the provision of
coverage from high-altitude balloons
through Project Loon. Facebook has
similar efforts with solar airplanes
via Internet.org. LeoSat, OneWeb,
and Space X are launching flotillas
of low earth orbit (LEO) satellites to
provide ubiquitous global coverage.
All of these firms have economic
incentives for their investments that
differ from that of traditional mobile
operators. This wave of new players
has the potential to complement and/
or disrupt the mobile networks status
quo.
The convergence of these trends,
and the increasing complexity in
the access landscape, highlight
the importance of researching and
understanding the portfolio of emerging,
new access innovations.
14 \ CLOSING THE ACCESS GAP: INNOVATION TO ACCELERATE UNIVERSAL INTERNET ADOPTIONBOX 1: THE ANATOMY OF A NETWORK
In general, mobile phone and internet networks feature core networks, backhaul, and last mile.
Core networks (including national backbone given the costs associated with obtaining rights of
and international connectivity) encompass way and construction permits. Microwave often
the high-capacity fiber optic infrastructure is used in areas where fiber is too expensive, but
delivering traffic to/from aggregation points it requires line-of-sight between transmitters,
(e.g., Internet Exchange Points, IXPs), peering so it too can be prohibitively expensive in very
connection points between Tier 1 Service remote areas. Satellite backhaul overcomes the
Providers, and submarine cable landing stations rural challenges of distance and topography, but
for international connectivity. has high operating costs and often lower quality
service than traditional fiber.
Backhaul (or middle mile) refers to the
infrastructure carrying voice and data traffic from Last mile refers to the connection from an
an operator’s core network to an aggregation site, aggregation site to an end user, be it an individual
such as a base station. Backhaul often is the key in a household or a school or business. Providers
barrier to supplying coverage particularly to areas deliver last mile service via traditional mobile
featuring low-density or challenging topography phone radio or alternative channels such as Wi-Fi.
such as islands or mountains. Beyond pure infrastructure, a mobile operator or
internet service provider also must invest to ensure
Fiber is the most common form of backhaul,
a viable distribution network is in place, such as
offering the highest capacity and best quality
agents selling airtime, as well as sources to sell and
service, but often is prohibitively expensive to
service locally appropriate handsets.
deploy in rural or topographically difficult areas,
INTERNATIONAL
MIDDLE MILE LAST MILE
CONNECTIVITY
NATIONAL
BACKBONE
Source: Internet Society, “Lifting the Barriers to Internet Development in Africa” http://www.internetsociety.org/sites/default/files/Barriers%20to%20
Internet%20in%20Africa%20Internet%20Society_0.pdf
CLOSING THE ACCESS GAP: INNOVATION TO ACCELERATE UNIVERSAL INTERNET ADOPTION
/ 154 Last Mile
Access Innovations
The entry of new players in this market shows an increasingly diverse range of business
models and technology innovations. The term “access innovations” provides a framework
to categorize the range of approaches and to understand and highlight the different
methods of last mile access. Last mile access innovations typically refer to those that
close the gap between an aggregation point, such as a cell site, and the end user.
Innovation may or may not involve fostering demand is integral to success
new technology, but in either case, for any access innovation.
requires reimagining business models,
In addition to distinguishing the role of
including everything from cost and
new business models and/or technologies,
pricing structures to sales and marketing
definition of the last mile delivery
to handset considerations. Some access
challenges each innovation can address
innovations rely on existing mobile and
provides a useful way to categorize
internet networks and offer innovative
innovations. While all ultimately may
business models that aim to address
have roles to play in closing the last mile,
barriers to access and adoption by the
they address challenges at different
underserved. Other innovations also
points along the network. Figure 1
incorporate new or new use of existing
offers a framework for these categories,
technologies to address the economics
followed by greater description on the
of extending the network to the last
next page.
mile, ranging from cached content
delivered via Wi-Fi to high-altitude Table 1 offers a way to categorize
solutions such as satellites, balloons, emerging access innovations, describing
and solar powered airplanes. some of the common technology and
business model features commonly found
Regardless of the approach, technology
among examples underway.
and supply-side solutions are not
enough; sustainable business models— 4.1 MODELS TO EXTEND
not to mention social impact—require INFRASTRUCTURE
affordable service, sufficient local
One type of innovation seeks to extend
content, and relevant services to attract
existing network infrastructure to
and retain users, and ways to generate
communities where backhaul is limited
sufficient awareness and skills among
as a result of traditional service providers
underserved users. A robust approach to
not anticipating economically viable
16 \ CLOSING THE ACCESS GAP: INNOVATION TO ACCELERATE UNIVERSAL INTERNET ADOPTIONFIGURE 1: NEW ACCESS MODELS GROUPED BY “ACCESS CHALLENGE”
Lack of network Lack of affordability Lack of relevance
coverage: extending where connectivity and familiarity where
infrastructure exists: complementary connectivity exists:
technologies improving value
Network expansion Alternative internet service Access models leveraging
to rural communities delivery to marginalized existing devices and access
without existing communities already within technologies, shifting burden of
network coverage, but coverage, but dominant willingness to pay, such as with
with backhaul options models are not fully serving Free Basics and Gigato.
(satellite; microwave the base of the pyramid
or TVWS to fiber). customers, such as with poa!
Examples include Internet's and Project Isizwe.
Mawingu, Rhizomatica,
and ViRural.
Source: Caribou Digital9
means of providing connectivity. The average revenue per user (ARPU) in the
models employ a range of technologies US$3–US$5 range. “Anchor tenants”
to extend the network, such as Wi-Fi or refers to organizations with sufficient
microwave, but are most distinguished demand and resources to merit service
by their business models’ innovations, provider investment in a given geographic
including different ownership, area, such as local government offices,
partnership, and management structures agricultural processing enterprises, and
that affect the relationship with, and tourist facilities.
value proposition for, end users.
Extending Infrastructure:
Extending Infrastructure: Rural ISP MNO-partnership model
In areas where mobile network operators The high CAPEX and OPEX costs
are not present, entrepreneurs are associated with mobile carrier networks
developing internet service delivery leads to deployments focused on
models leveraging Wi-Fi for last mile densely populated, urban/peri-urban
access connectivity to anchor tenants environments. However, approaches
and direct to individuals. These models such as sharing of mobile network
often feature low cost networking infrastructure and deployment of
equipment, with backhaul connectivity lower cost, “white labeled,” networking
provided either by microwave links or equipment by nontraditional service
satellite. The lower CAPEX and OPEX providers can reduce costs and facilitate
requirements are supported by monthly network expansion.
9. http://cariboudigital.net/new/wp-content/uploads/2016/08/Caribou-Digital-DFID-Digital-Access-in-Africa.pdf
CLOSING THE ACCESS GAP: INNOVATION TO ACCELERATE UNIVERSAL INTERNET ADOPTION
/ 17TABLE 1: TECHNOLOGY AND BUSINESS MODEL CHARACTERISTICS OF ACCESS INNOVATIONS
TECHNOLOGY CONSIDERATIONS
Access Backhaul Spectrum
Access Devices Network Technology Licensing
Extending Rural Internet Wi-Fi enabled devices Wi-Fi / TVWS Various options Licensed-
Infrastructure: Service Provider (feature phones, smart depending on exempt Wi-Fi
Network expansion to (ISP) phones, tablets) availability, cost
rural communities without and regulatory
existing network coverage, constraints (fiber,
but with backhaul options satellite, TVWS,
(satellite; microwave or microwave)
TVWS to fiber)
MNO- GSM-enabled phones Licensed Various options Licensed
partnership (basic, feature, smart) mobile depending on
model (revenue networks availability, cost
sharing or and regulatory
wholesaler) constraints (fiber,
satellite, TVWS,
microwave)
Microtelco/ GSM-enabled Phones GSM Microwave or Use of GSM
Community (basic, feature, satellite outside of
GSM smartphone) traditional
license (e.g.,
“social purpose
spectrum”)
Complementary Paid Wi-Fi enabled devices Wi-Fi Predominantly Licensed-
technologies: Commercial (feature phones, fiber exempt Wi-Fi
Alternative internet Wi-Fi smartphones, tablets)
service delivery to
marginalized communities Subsidized, Free Wi-Fi enabled devices Wi-Fi Predominantly Licensed-
already within coverage, but Public Wi-Fi (feature phones, fiber exempt Wi-Fi
dominant models are not smartphones, tablets)
fully serving the base of the Shared Access Desktop computers, Ethernet/ Various options None
pyramid customers Centers laptops, tablets, Wi-Fi depending on
internet-enabled availability, cost
phones (feature, and regulatory
smartphones) constraints (fiber,
satellite, TVWS,
microwave)
Improving value: Zero-Rating GSM-enabled Phones Licensed Relies on mobile Licensed
Access models leveraging (basic, feature, mobile carrier network
existing devices and access smartphones) networks
technologies, shifting burden
of willingness to pay. Sponsored/ GSM-enabled phones Licensed Relies on mobile Licensed
Earned Data (basic, feature, mobile carrier network
smartphones) networksTABLE 1: TECHNOLOGY AND BUSINESS MODEL CHARACTERISTICS OF ACCESS INNOVATIONS
BUSINESS MODEL
User Pricing Sales & Distribution Examples
Extending Rural Internet Varies (metered/ Community network Mawingu, AirJaldi
Infrastructure: Service Provider sachet pricing; agent model
Network expansion to (ISP) monthly subscription;
rural communities without anchor tenant
existing network coverage, supported)
but with backhaul options
(satellite; microwave or MNO- Full-fare, metered Agent network Africa Mobile Network,
TVWS to fiber) partnership usage, predominantly Vanu, ViRural
model (revenue pre-pay for calls,
sharing or SMS, or MB of data
wholesaler)
Microtelco/ Varies (metered/ Community network Rhizomatica, Endaga
Community sachet pricing; agent model (formerly), Village Telco
GSM monthly subscription,
pre-pay for each call/
SMS; anchor tenant
supported)
Complementary Paid Full-fare, metered Staff at hotspot poa! Internet, Roke Telecom,
technologies: Commercial usage for MB of data and agent network Everylayer
Alternative internet Wi-Fi
service delivery to
marginalized communities Subsidized, Free Free via gov’t or None Project Isizwe, Facebook
already within coverage, but Public Wi-Fi corporate subsidy; Express Wi-Fi
dominant models are not limited usage
fully serving the base of the
pyramid customers Shared Access Free or partially None Community knowledge centers
Centers subsidized via
government and
donors/ NGOs,
limited usage
Improving value: Zero-Rating Free for select Partner mobile Free Basics
Access models leveraging content, subsidized by operators &
existing devices and access mobile operators or app stores
technologies, shifting burden app developers
of willingness to pay.
Sponsored/ Free for select Partner mobile Gigato
Earned Data content, subsidized by operators &
mobile operators or app stores
app developersNew hardware and software solutions Extending Infrastructure: Microtelco/
often enable these innovations: whereas Community GSM
base stations once cost upwards of Micro-telecommunications (or
US$100,000, simple, lower volume microtelco) /community GSM providers
base stations using open source offer small-scale, lower-cost network
software now can cost as little as solutions that link to traditional backhaul
US$10,000.10 Access to appropriately with the purpose of bringing voice
priced spectrum, particularly digital and SMS services (and in some cases
dividend spectrum, spectrum band internet) to remote, rural areas outside
vacated by analogue television station of the coverage footprint of mobile
broadcasts in the transition to digital operators, by leveraging ownership
television broadcasting can provide and operation of the network by the
balance between capacity and geographic community.11 Networks typically use
coverage. Healthy market competition, spectrum without a license, or with
with multiple competing mobile special dispensation from the regulator.
operators and limited government
Remote, rural regions where GSM
ownership can lead to competitive
network build-out is unlikely are
consumer benefits in the form of pricing
suitable locations for community-
and service options for users.
owned networks as well as supportive
A number of new entrants are regulatory environments that provide
demonstrating potential profitability allowances for use of GSM spectrum
in low population-density deployments without a license. In some instances,
with sufficient revenue to cover lower to varying degrees, these innovations
cost CAPEX deployments. By financing feature local ownership and/or operation
their own network deployment, these of the network, which provides incentive
organizations reduce traditional to develop the network.12 As members of
operators’ financial risk. The new a local community operate the network,
entrants tend to partner with operators some of the revenues generated remain
either through revenue-sharing with the community and a sufficient
agreements (essentially acting as an software management system is critical
extension of the main operator) or as a to allowing community members to run
wholesale network, supporting multiple the network.
operator access networks.
10. Heimerl, K. Hassan, S. Kashif, A. Brewer, E. Parikh, T. Local, Sustainable, Small-Scale Cellular Networks. ICTD 2013
Proceedings of the Sixth International Conference on Information and Communication Technologies and Development:
Full Papers – Volume 1. 2013.
11. Galperin, H. Bar, F. “The Microtelco Opportunity: Evidence from Latin America.” Information Technologies and
International Development, 3 (2). 2006. Heimerl, K. Hassan, S. Kashif, A. Brewer, E. Parikh, T. “Local, Sustainable,
Small-Scale Cellular Networks.” ICTD 2013 Proceedings of the Sixth International Conference on Information and
Communication Technologies and Development: Full Papers – Volume 1. 2013.
12. Ibid
20 \ CLOSING THE ACCESS GAP: INNOVATION TO ACCELERATE UNIVERSAL INTERNET ADOPTIONPROFILE 1: MAWINGU NETWORKS
Mawingu Networks is a rural internet service provider outside the 60,000 person market town of
Nanyuki in Laikipia county, Central Kenya, which has approximately 300,000 to 400,000 inhabitants.
The organization has employed a successful partnership strategy to attract start-up and growth capital to
trial and improve its business model and use of technology, which in this case began with unlicensed TV
white space spectrum and has evolved over time.
Mawingu’s base stations, which are solar powered, initiative and USAID, in part to test the ability to
are the first in Kenya to use unlicensed TV white develop a model using TV white space spectrum
space spectrum band to offer high-speed (up to and technologies. Subsequently, Mawingu was
20 Mbps) internet service via Wi-Fi in a rural able to attract funding from investors, including
setting. For its pilot project, Mawingu set up eight Vulcan, Inc. and private investor, Jim Forster.
hotspots, including in five schools, as well as the Ultimately, the approach appealed to the Overseas
the Red Cross, public library, health clinic, and a Private Investment Corporation (OPIC), which
Mawingu Kiosk available to the public. As Mawingu committed to providing a US$4.1 million loan in
has expanded, it added agents who sell low-cost September 2016 to enable commercial expansion
internet access and device charging services within of Mawingu’s model further across Kenya.
their communities. The success of these hubs
See Appendix 2 for more details on
depends on increasing foot traffic, so agents have
Mawingu Networks.
the incentive to market the value of their services
to the wider community. The price to end users is
low, beginning with a price of roughly US$0.50 for
24 hours (300 MB cap), US$1 per week (500 MB
cap), US$3 for one month (2 GB), or US$10 for a
three-month package (8 GB), and device charging.
Mawingu has knit together a diverse set of partners
that have enabled its initial project. Its early
days featured grants from Microsoft’s 4Afrika
Community-owned networks succeed in communities place. Communities must maintain and operate the
where there is an existing, strong social structure. network on an ongoing basis, and companies that offer
such solutions are early stage businesses that can face
The key challenge with community-led models
challenges to deploy large-scale networks.
is the level of effort required to recruit and train
communities to invest in and operate the network. Scale-up itself could pose an additional challenge
This high-touch approach may limit the scalability, for microtelco/community GSM networks operating
but may be suitable if deployed in partnership with without dispensation from the regulator for spectrum,
existing NGOs or community groups that have the in the form of regulatory uncertainty. If microtelco/
community mobilization infrastructure already in community GSM networks scale, there may be a risk
CLOSING THE ACCESS GAP: INNOVATION TO ACCELERATE UNIVERSAL INTERNET ADOPTION
/ 21of obstruction from mobile operators. within the mesh network.
A final trade-off is that such models
4.2 COMPLEMENTARY
typically offer voice and SMS services
TECHNOLOGIES
but no internet access.
In many communities, traditional
One variation on the microtelco/ coverage and services exist, but are cost-
community model is to extend network prohibitive for low-income end users in
reach by creating a network of Wi-Fi the existing footprint. In these
routers, known as a “mesh network.” contexts, innovators are testing new
Generally, entrepreneurs or community business models, often using existing
groups manage such networks, including or emerging technologies in novel ways,
local marketing and distribution within to promote affordable access among
their communities. The Village Telco low-income consumers.
mesh network allows free local calls;
a mesh network in Johannesburg had Complementary Technologies:
70 percent of calls being local. Wi-Fi- Paid Commercial Wi-Fi
enabled handsets usually are required, Wi-Fi hotspots are operated as
although technology such as the Mesh commercial businesses ranging from
Potato allows such networks to provide single cybercafés to networks of hotspots
voice services via basic feature phones. selling pre-pay, full-fare internet access.
Wi-Fi networks utilize unlicensed Wi-
Such networks can be useful, but have Fi spectrum and provide more localized
limits. Given the limited reach of Wi- coverage compared to mobile carrier
Fi routers, the approach is difficult networks, satellites or high-altitude
to deploy in very remote or widely platforms (or HAPs, referring to the
distributed rural communities. The range of more experimental solutions
decentralized nature of a mesh network for providing backhaul coverage to
means there is no single point of failure. mobile network operators (MNO) or
More critically, routers within these ISPs in rural, hard-to-reach areas such
networks both transmit and receive data, as balloons, low earth orbit (LEO)
but cannot do so simultaneously; as the satellites, or solar-powered unmanned
number of routers in a network increases, aerial vehicles).
the efficiency of the overall network
decreases. Larger mesh networks are Commercial Wi-Fi networks
technically challenging to implement and generally are most economical in
require a person with sufficient technical densely populated urban/peri-urban
skill to follow installation instructions. environments that provide a larger user
And mobility is restricted to areas of base and higher likelihood of low cost
coverage around the particular router fiber backhaul.
22 \ CLOSING THE ACCESS GAP: INNOVATION TO ACCELERATE UNIVERSAL INTERNET ADOPTIONPROFILE 2: VIRURAL AFRICA
ViRural is a U.S.-based start-up company aiming to extend phone, internet, and mobile charging services
to rural African communities that lack connectivity and reliable energy solutions. On the cusp of its
initial commercial deployment in Nigeria, ViRural’s objective is to offer a wholesale rural network to local
mobile operators via roaming agreements. This solution enables operators to extend services to small rural
communities that have not yet demonstrated sufficient demand to encourage investment in traditional
network extension.
ViRural relies on operator partners’ existing In 2017, ViRural aims to launch its first
spectrum licenses and offering roaming services deployment in Nigeria where regulatory
on a revenue share basis. Customers use their constraints against active infrastructure sharing
existing phones and SIM cards to connect to the prohibit the “Wholesale” model. In collaboration
ViRural network, which interconnects to their with the Nigerian Telecommunications regulator,
operator as seamlessly as if they are roaming via a ViRural has partnered with a regional MNO for
separate operator network. ViRural earns a share access to spectrum based on a revenue sharing
of revenue for each connection it enables, as well scheme. In mid-2017, the Nigerian Regulator
as revenue from the sale of scratch cards or other (NCC) has indicated it will repeal the ban on
fees for use of Wi-Fi, device charging services at national roaming. ViRural’s agreement with the
the ViRural base station container, and pay-as- MNO includes a clause which allows ViRural
you-go home electrification. to transition to a “Wholesale” model once the
regulatory issues have been addressed.
ViRural assembles off-the-shelf technology
components using commercial, carrier-grade The Nigerian deployment will offer connectivity
small-cell base station technology into a simple and electricity to more than 20,000 rural
“Community Hub.” Each Community Hub Nigerian communities, connecting more than
features a 15-foot mast, clustered alongside a 40 million people.
40-foot shipping container that includes a satellite
In addition to the Nigerian deployment, ViRural
or microwave dish to link to backhaul, as well
is active in more than 10 additional African
as solar panels with back-up batteries to enable
Markets including Liberia where ViRural has
sufficient power to run the network, provide fee-
partnered with fhi360 and Mercy Corps to
based device charging services, and power for 100
provide connectivity to more than 280 rural
homes at 90 watt-hours per day each. A single
Liberian communities in 2017.
Community Hub can provide 7-10 kilometers of
phone coverage and other services for a population See Appendix 2 for more information on ViRural.
up to 2,500 people.
CLOSING THE ACCESS GAP: INNOVATION TO ACCELERATE UNIVERSAL INTERNET ADOPTION
/ 23Markets where mobile data costs are Wi-Fi is beginning to expand in emerging
prohibitive for lower income user markets. With support from government
segments are attracting lower cost Wi- or corporate funding, Wi-Fi access is
Fi services, particularly where there is provided for free in public locations,
already widespread adoption of Wi-Fi reducing the affordability barrier and
enabled handsets, i.e., feature phones enabling users to access the internet at
and smartphones. relatively fast speeds, such as 15 Mbps
for Project Isizwe in South Africa.14
Wi-Fi networks use unlicensed spectrum,
This model works best in densely
which remove the need for costly
populated urban/peri-urban
spectrum licenses, lowering the barriers
environments where a large proportion
to entry for smaller providers. As a
of the target population use Wi-Fi-
result, Wi-Fi networks can be developed
enabled feature phones or smartphones.
with lower CAPEX than mobile carrier
These models require governments with
networks, which can lower the cost for
a strong digital inclusion agenda and/
the user.13 The user is able to access
or willing corporate sponsors, however,
services provided by the internet at
both of which often work with nonprofits
relatively fast speeds in Wi-Fi covered
with existing or prospective sustainable
areas. Commercial Wi-Fi hotspots
business models.
generally do not require on-going public
funding or subsidies. Wi-Fi networks use unlicensed spectrum,
which removes the need for costly
The business case deteriorates in
spectrum licenses and lowers barriers
rural areas, however, because of lower
to entry for smaller providers. Wi-Fi
population density, lower customer
networks also have lower CAPEX and
spending, lack of power and low-
OPEX than MNOs, potentially lowering
cost fiber backhaul. Users have to
the cost for the user.15
pay; therefore, access is limited by
affordability. Users are also limited to However, sustainability becomes a
accessing connectivity at the hotspot challenge as the size of the network
location, constraining mobility. grows and costs for maintenance
increase. Access is typically limited by
Complementary Technologies:
time or bandwidth usage; for example,
Subsidized, Free Public Wi-Fi
Project Isizwe has a daily cap of 250
Once exclusively found in prosperous
MB,16 removing the ability for the user to
cities of the developed world, public
complete tasks of long duration.
13. EveryLayer, personal communication, November 2015.
14. Project Isizwe. “City of Tshwana Free Wi-Fi gets upgraded to 15 mbps.” Posted at http://projectisizwe.org/city-of-
tshwane-free-wifi-gets-upgraded-to-15mbps/. Accessed December 2015.
15. http://allafrica.com/stories/201609191316.html
24 \ CLOSING THE ACCESS GAP: INNOVATION TO ACCELERATE UNIVERSAL INTERNET ADOPTIONPROFILE 3: RHIZOMATICA
Rhizomatica demonstrates how policymakers and regulators can encourage innovation by enabling new
actors to play new roles in deploying service to underserved communities.
Rhizomatica is a non-profit that since 2012 has cost way for communities to set tariffs and manage
created a regional community telecommunications billing.
cooperative enabling low-income communities
Given the low cost structure, the community
in Mexico to own and operate their own small,
gains access to, and operate, an otherwise
local mobile networks. The key to Rhizomatica’s
unavailable local GSM network at an affordable
approach was gaining the Mexican regulator’s
rate. The revenue model–designed in part by one
approval to use licensed, but unused, GSM
of Rhizomatica’s early communities–features
spectrum for community-based networks where
fixed, monthly membership fees that entitle
traditional service providers choose not to operate.
users to unlimited calls within the local or any
As a result of Rhizomatica’s early networks and
other Rhizomatica network. The monthly user
ongoing advocacy, as of 2015, the Mexican
fee is 40 pesos, of which 15 pesos goes towards
regulator officially allocated parts of the 850
Rhizomatica’s management fees, and 25 pesos
MHz spectrum band to be designated for social
covers the community’s operating costs such as
use. Underserved communities that meet specific
electricity and internet connectivity. Users also
criteria are eligible to use this spectrum for
can purchase credits to make long-distance calls
community-based networks to close gaps in the
using voice over internet protocol (VOIP). Any
traditional network.
revenue generated above operating costs stays
In addition to leveraging unused spectrum, within the network or the community.
Rhizomatica’s model focuses on low-cost
Rhizomatica’s partners now include 20 active
community design, ownership and administration
networks with over 3,000 active users per
of the network. The community contributes
month. In addition to serving these communities
the roughly US$10,000 in CAPEX required
and identifying others for expansion,
for network installation. The local government
Rhizomatica advocates with the International
administers the network, working with Rhizomatica
Telecommunications Union (ITU) and others
to set up the network and troubleshoot problems.
to promote regulatory reform to allow small
Rhizomatica’s ground operations team provides
communities to legally utilize unused, GSM
the more sophisticated technical services,
spectrum in largely remote, rural locations.
including ensuring satellite or Wi-Fi connectivity,
Rhizomatica also continues to develop its open-
to providing backhaul and remote network
source, community network management software
management. Individual community operate
for use with GSM implementations to enable
and maintain the network. A key underpinning
communities to administer networks.
of this approach is use of open source network
management software (openBSC), as well as See Appendix 2 for more information
Rhizomatica’s own open source software for on Rhizomatica.
community network management, providing a low-
CLOSING THE ACCESS GAP: INNOVATION TO ACCELERATE UNIVERSAL INTERNET ADOPTION
/ 25Users are limited to accessing centers provides a natural location where
connectivity at the hotspot location groups already meet and the provision
constraining mobility and raising privacy of information and communication
issues if the hotspot is in a public location technology (ICT) skills training can
away from their homes. In rural areas, address the poor digital literacy of users
lower population density, lack of power, driving increased demand.
and lack of low-cost fiber amplify the
If a community is already served by a
sustainability challenge.
backhaul connection, the addition of a
Complementary Technologies: shared access center can open up that
Shared Access connection to a broader range of people
A shared access center provides a in the community. The sharing of devices
physical location to use communications reduces the burden of the cost of device
and internet via shared desktop ownership and accessing a computer
computers typically provided for free instead of a handset is more suitable to
or subsidized by government or donors/ multitasking, content production, and
NGOs. Shared access centers can also be e-learning activities. Furthermore, access
commercial enterprises—“cybercafés.” centers provide ICT skills development
Shared access centers were the earliest through formal classes or informal
method to extend access to low- learning.
resourced communities in cities, towns,
The scalability and economic
and villages round the world, pooling the
sustainability of nonprofit shared access
costs of devices and access in public,
is a challenge, since they demand
concentrated locations.17
ongoing subsidies from government or
This access model typically requires NGOs. Fixed and operating costs in rural
sufficient concentration of users areas can be higher if satellite is used,
around the access center. Initial models and those costs are spread over fewer
required government and/or donors/ users who access the network addressable
NGOs with a digital inclusion agenda to users. The further expansion of GSM
provide ongoing subsidy without which rollout and mobile phone adoption has
sustainability could be a challenge. Re- reduced the demand, and need, for
using existing community infrastructure shared access centers.
such as libraries, schools, and community
16. Project Isizwe. “FAQ.” Posted at http://projectisizwe.org/faq/. Accessed December 2015.
17. Sey, A. Coward, C. Bar, F. Sciadas, G. Rothschild, C. & Koepke, L. “Connecting people for development: Why public access
ICTs matter.” Seattle: Technology & Social Change Group, University of Washington Information School. 2013. Proenza,
F J. “Public Access ICT Across Cultures.” MIT Press. 2015. Toyama, K. Kuriyan, R. Bailur, S. Rangaswamy, N. Ratan, A.
Veeraraghavan, R. Menon, D. Pal, J. Srinivasan, J. “Review of Research on Rural PC Kiosks.” Posted at: http://www.eolss.
net/sample-chapters/c15/e1-25-02-04.pdf. Accessed January 2016.
26 \ CLOSING THE ACCESS GAP: INNOVATION TO ACCELERATE UNIVERSAL INTERNET ADOPTIONYou can also read
