|The Importance of Satellite Communication in Rural Areas|
Threatened by the digital divide, millions of people living in rural regions are said to be deprived of having access to ICT. Rural areas, especially those of developing countries, provide a very challenging environment to implement communication infrastructure for data and internet based services.
In most common cases challenges are brought about by the high costs of network implementation and lack of customer base as rural areas are characterized by low income, highly scattered and low population density.
This situation drives network operators to establish network infrastructures in urban regions leaving out rural areas as underserved community. This situation, however, has changed.
Mobile operators today seem to be stuck in a maze especially in urban regions and big cities as they are being increasingly challenged by a variety of factors that make profitability more of a distant star! Regulation, market saturation, competition and commoditization of voice services are robust hindrances for mobile operators today. Thus, profitability has become a major challenge threatening of a severe downfall. Nevertheless, operators have widened their horizons and started looking beyond city boarders where promising opportunities seemed to be lingering.
The mobile market is still full of opportunities, yet not in developed markets where operators have always been comfortable and very profitable. New opportunities are loitering in developing and emerging markets in the rural country side where 3G networks have been recently introduced. In these non-urban regions, operators will be faced with the prospects of rural organic growth, which in turn will be the sources of new revenue streams.
According to a survey conducted by the United Nations, 3.5 billion people were living in rural areas throughout 2010. This number is expected to further increase by 2020. With such a tremendous number of people inhabiting rural areas, mobile operators rushed to fill in or rather close the gap that have been separating those nearly 4 billion individuals from the urban world. With the rollout of 3G mobile broadband, the gap started to gradually shrink, and rural areas are expected to be the next growth market especially for the telecoms industry.
The expansion of mobile broadband connectivity in rural communities whether via 3G, dongles or handsets has already exploded thus, presenting operators with the opportunities to grow their subscriber base and add up new avenues to their revenue streams. Despite the opening up of new prospects, operators are somehow hesitant to rigorously invest in those regions for two main reasons: affordable power and efficient backhaul infrastructure.
Network expansion in rural communities has been always accompanied by concerns about the potential return of investment as these markets are very cost-sensitive. Network expansion and profitability have been hindered and affected by various factors imposed by the geography, demography and economy of these rural communities.
The income of the majority of the rural population is basically very low and, rural markets are dominated by single-digit ARPU levels thus, profitability is extremely challenging. On a different level, the geographical nature of rural areas is very unique. Populations are concentrated in small areas that are dispersed throughout a vast geographical area. This reality renders it difficult for mobile operators to tackle connectivity demands throughout the same rural region.
It is a fact that rural regions or markets are less accessible and generate less revenue with higher operating costs. However, with the boom of IP technology and the new developments in satellite backhaul and mobile network infrastructure, chances of expanding into remote regions are growing day after day, and backhaul ceased to the same big challenge which most operators have always feared.
In the absence of cost effective and bandwidth efficient technologies, satellite backhaul emerged as to be a uniquely useful tool where traditional satellite technologies failed to serve operators. This technology granted operators the chance to cost-effectively reach new subscribers, expand their coverage and maintain organic growth beyond urban boarders.
Finally, as to satellite backhaul and direct satellite broadband services, they have resulted in more broadband revenues and reduced capital costs. They also enabled different players in the telecom industry to reduce network congestion and mitigate the bandwidth shortage across their networks.
The mobile backhaul solution will remain a major source of cash that evades the risks in the size of the investment required to launch satellites into orbit for data connectivity, especially in remote regions at least until a more cost effective solution emerges.