Already more people receive broadband internet wirelessly than over
fixed networks, but vendors are competing to reduce the cost of fibre and
even copper in rural areas
The broadband access market is characterised by a series of global disparities. There is disparity in broadband penetration rates between different regions: in Africa overall broadband uptake is commonly estimated at less than 1%, while in North America fixed household broadband penetration is thought to be around 77%.
There is also disparity in penetration rates between different countries in one region: according to broadband research specialist Point Topic, Romania has around 48% of households connected to fixed broadband compared with 87% or more in the Netherlands.
And then there is disparity in available broadband speeds between urban and rural areas within individual countries: in the UK, for example, Edinburgh has an average fixed line maximum speed of 10.1 megabits a second, while more rural areas tend to have lower speeds and a greater proportion of customers who receive speeds less than 2 megs.
Generally speaking, the most broadband-disadvantaged populations live in the rural parts of poor countries in developing regions.
Some of the causes of rural broadband deprivation are well documented.
One is an historic lack of investment in wireline and fixed networks, itself caused by low population densities overall. “It is fundamentally less expensive to deploy broadband in densely populated areas because less copper or fibre needs to be used to pass a number of premises,” points out Geoff Burke, the senior director of corporate marketing at broadband access specialist Calix.
Another consideration is rural topography, with sometimes extended areas of difficult terrain between population centres.
A third consideration is lack of disposable income, especially in the case of rural communities in developing countries. “In lower income markets a subscription can easily be 25% of an average household income and, despite the desire for high-speed internet access, the projected revenues are a long way from making commercial deployment an option,” notes Oliver Johnson, CEO of Point Topic.
Other related causes in other locations may be less obvious. “In North America, there is a direct correlation between broadband adoption and socio-economic status. In addition, younger adults are more likely to buy broadband than older adults,” says Burke.
“Rural areas tend to be populated by an aging population, and of a lower socio-economic condition than their urban counterparts. This conventional wisdom has discouraged widespread broadband deployment in rural areas because anticipated take-up rates could be lower.”
Either way, though, the relative lack of broadband availability in rural areas is seen as an imbalance that requires to be corrected. Quite apart from the moral aspects of not rectifying the basic inequality of opportunity suffered by rural populations, there’s much evidence — some quantifiable, some less so — that broadband access can bring substantial benefits to these populations.
Government administration, education, healthcare, employment, productivity, commerce, innovation, the environment and social cohesion are all among the sectors that access to broadband has the potential to improve.
There’s also plenty of analysis that links increased broadband access with higher GDP.
According to a June 2011 report from the Broadband Commission, set up by the ITU and Unesco, every 10% increase in broadband penetration in China is seen as contributing an additional 2.5% to GDP growth.
The report, Broadband: a Platform for Progress, also cites a World Bank study that found that there were 1.38 additional percentage points to GDP growth for every 10 percentage point increase in broadband penetration - higher than any other telecommunication service.
The good-ish news is that efforts to reduce the broadband divide between rural and urban populations are being helped along by continuing improvements in communications technologies. At the same time, new regulatory mechanisms are being implemented to address rural broadband deficiencies, and many governments around the world are according a higher priority to the issue.
On the technology front, there are moves to extend the reach of copper-based broadband from telephone switches. This broadband enabling technology allows service to be provided to so-called “not-spots” beyond a local telephone exchange’s normal limit.
John Larkin, managing director of the Kenton Group, estimates that the technology his company has developed extends the range of DSL signals from the usual five kilometres to 12 kilometres using existing copper. The technology has been installing in the UK and is being installed in a Middle East capital city.
“We are very excited by what its launch means for the future of broadband and providing services to previously inaccessible customers,” says Larkin.
Another promising copper network technique involves the identification and elimination of interference on copper lines, increasing the quality, reliability and robustness of the signal. This in turn enables increases in broadband throughput.
ITU-T, the technology section of the ITU, calls this the G.Vector standard and one company, Ikanos, has developed a compliant technology that will enable broadband speeds of 100 megs and more over copper.
Some say that fibre is becoming a viable technology alternative for deployment in rural areas. “Fibre can reach up to 80 kilometres,” explains Burke. “Fibre is a virtually unlimited waveguide offering broadband speeds that are orders of magnitude faster than copper solutions. This allows rural service providers to do more than close the gap — they can leapfrog their urban counterparts in quality of experience.”
Meanwhile satellite connectivity, once something of a minority sport in terms of rural broadband service provision, is becoming more and more mainstream. The focus here is on what is called the Ka band — the letters are pronounced separately — which runs from 26.5 to 40 gigahertz. “The future of consumer broadband services over satellite is Ka band, says Serge Van Herck, CEO of satellite specialist Newtec. “This is simply because the total capacity offered by other commercial frequency bands cannot possibly cope with new demands.”
Newtec is refurbishing Europe’s largest satellite broadband network, Astra2 Connect, owned by satellite operator SES, with next generation Ka-band terminals.
SES delivers broadband internet and voice-over-IP services to over 80,000 private households and small businesses across Europe using Newtec technology at a lower frequency, Ku band, where the download speeds can be up to 6 megs. With the extra bandwidth at Ka band, Van Herck expects speeds to run up to 10 megs.
But mobile cellular is the big news for rural — and urban — broadband of the future. According to a recent Infonetics Research report the number of mobile broadband subscribers is already greater than the number of fixed broadband subscribers.
Infonetics, in its report Fixed and Mobile Subscribers, estimates that in 2010 the number of cellular mobile broadband subscribers jumped almost 60% to 558 million worldwide — compared with 500 million for fixed broadband — and mobile should top 2 billion by 2015.
“Mobile in all its forms is going to be an important element of addressing the yawning divide between rich and poor,” ventures Point Topic’s Johnson.
“Deployment is far cheaper than fixed line and, although the cost of downloading data and the rate you can do so at don’t compare well with fixed solutions, it is at least within reach of individuals and governments through much of the digitally disadvantaged world.”
In parallel with technology developments, governments and ICT sector regulators are rethinking their approaches to bridging the rural broadband divide. One idea gaining currency in some markets is the devolution of responsibility for broadband expansion down to very local bodies such as councils and schools with, for example, rural communities piggy-backing on schools’ broadband networks.
Another idea is that broadband access should be enshrined as a basic human right, a notion pioneered by Finland and Estonia, and subsequently suggested by the ITU as one of the UN’s Millennium Development Goal.
Related to these newer approaches to rural broadband expansion is the recognition by an increasing number of governments that such expansion is in the national interest and should, therefore, be subsidised or stimulated by the injection of public funds into the sector.
“Government policy can play a key role in both catalysing broadband deployment through grants and low-interest loans, or by implementing a regulatory framework that encourages service providers to expand their capital investments in rural areas through tax rebates, capital expenditure incentives, or operational subsidies,” suggests Calix’s Burke.
“A key learning from the US broadband stimulus has been that government funding of very rural networks has a natural side-benefit of placing a subsidised, high capacity fibre backbone that often passes through a multitude of communities en route to the remote location. As a result, service providers can then use this backbone as a lynchpin in expanding or building broadband to these bypassed communities as an indirect result of the government stimulus — amplifying its affect many times over.”
None of the foregoing is intended to suggest that the expansion of availability and use of rural broadband access is a done and dusted deal. Funding remains problematic, especially given the current uncertain global economic climate.
But as well as money, if you can get it, you need a plan. “With money available for next generation networks and rural broadband projects, many organisations are diving in, without really considering clearly what they want to do and how they want achieve it,” argues Richard Kendall, managing director of telecoms engineering consultancy Nova Incepta.
“One critical early decision should be around which operating model to choose: whether to build your own network or work with an existing operator.”
Meanwhile, devolving responsibility for system construction and operation to local entities brings its own challenges, not least that of the acquisition of the requisite technical management expertise.
A typical market scenario is that the would-be rural service provider has an end customer relationship and then uses different line access services from operators to be able to deliver the service to the end customer. This requires service providers to manage their services and subscribers using different administration, operation and IT infrastructures.
“Rural broadband is being held back by the fact that ISPs have to create a unique integration separately to each access network and respective support system,” says Matthias Trygg, CEO of broadband network management company Netadmin Systems.
“This results in large operational expenses and potentially low quality service fulfilment and assurance processes. In many cases this precludes commercial viability.”
Netadmin reckons that service providers need “a single interface so that services and subscribers in multiple external access networks can be managed simply and effectively”, says Trygg. “This will enable efficient service delivery even in smaller local networks, providing services to not-spots, and increasing market reach for service providers.”
And so, with a fair wind, the efforts of service providers, equipment vendors, investors, consultants, governments and local communities, rural broadband disparities can be transformed into broadband parities. GTB