Here Tom Luke, VP at Tutela explores the challenges and strategies that can help delivered coast-to-coast mobile networks in order to meet rural obligations
Whilst the majority of the world’s population lives in cities, almost every country around the world has large stretches of rural land inhabited by at least some people. As urbanisation accelerates, the “digital divide” – shorthand for the accessibility of online services and opportunities – has become a focus for legislatures and regulators alike.
As a result, government bodies such as Ofcom in the UK and BNetzA in Germany often put ambitious coverage requirements on new spectrum auctions or government contracts.
Government intervention is seen as necessary because rural coverage presents a unique challenge for operators, both technologically and economically: the remote nature of the sites means building and connecting the site in the first place is difficult, and the off-the-grid nature can mean operating costs are much higher than urban sites. When coupled with a lower population density — which means fewer subscribers per site to justify the increased costs — rural coverage is an unattractive proposition for a profit-maximizing mobile operator.
Around the world, a number of different strategies have been trialled to improve rural connectivity. One of the most recent of these was an agreement between the UK’s four main mobile phone networks to form a new company to improve 4G coverage in rural areas, essentially by sharing masts on a reciprocal basis to encourage competition and eradicate so-called “not spots”. How the strategy will play out, if indeed the proposal goes ahead, remains to be seen.
The UK is not the first country to tackle the problem of rural coverage: Around the world there are other successful examples of rural deployment strategies that may well serve as inspiration for operators as they look to meet these challenges. So which models have already been tried, and how successful have these been to date?
Here is a look at three different approaches taken in three different countries…
Canada – regional network sharing between major operators
Despite Canada being one of the least dense nations (population per square kilometre) in the world, mobile networks cover the vast majority of the population with LTE. Mobile networks in Canada are comparatively so comprehensive that, according to research by Deloitte, more than 25% of Canadians get all of their home data access via cellular mobile networks. While this is, in part, the result of internet blackzones where there is no access to wired or high-speed internet, it indicates the success mobile operators have had in deploying coast-to-coast services.
One of the ways this has been achieved is through infrastructure sharing between two of the nation’s largest national operators. Bell and Telus have been sharing towers for nearly twenty years to ensure both of its customer bases have access to mobile services throughout the country. This has undoubtedly improved connectivity in rural areas, although some have suggested it reduces market competition in these areas.
Canada’s model – RAN sharing between operators and limited off-network roaming in remote areas – has produced a network that is technologically advanced, with the country producing some of the best nationwide consistent quality scores in the world. However, data usage per subscriber is significantly lower for Canada compared to its peers, such as the US, while the price-per-gigabyte remains high — a factor linked by some to a lack of competition in certain markets.
Finland – a regional joint venture
Finland’s operators have also found unique ways to address its large areas of rural coverage. However, operators often take different partnership approaches to those seen in Canada.
For example, some areas are serviced by small regional wireless companies and cooperatives, which have roaming agreements with the major networks — one prime instance being the Aland islands. On the island, local provider Ålcom provides telephone services, but offers its customers full domestic roaming on Elisa’s mobile networks covering the majority of the rest of the country.
This is just one of several network sharing agreements in place in the region. Similar to other countries where coverage is part of spectrum auction requirements, Telia was required to reach 99% population coverage with is 4G network by the end of 2018. To do this, rather than infrastructure sharing directly with other operators, Telia and DNA launched a new joint-venture company (Suomen Yhteisverkko), which owns and operates its own infrastructure, but is jointly controlled by both of its parent operators. This approach means that both operators share the cost of building and maintaining expensive rural infrastructure while continuing to compete in denser areas.
The success of these approaches can be seen in the fact that Finnish networks achieve high levels of excellent consistent quality in recent reports, and that Finns are clearly happy to use their mobile networks for internet access, leading the world in data-only SIM usage (Tefficient) and having some of the highest overall data usage rates per SIM in Europe (Rewheel).
Mexico – the wholesale (neutral host) network approach
A third model being trialled in Mexico is the Red Compartida, a wholesale mobile network run by a third-party company, ALTAN Redes, and originally backed by the Mexican telecommunications regulators to increase market competition and improve rural coverage. This approach is very much in its infancy, and while this may prove invaluable in bringing faster, more reliable networks to consumers in Mexico, it is hard to benchmark its success at this stage. Nonetheless, it is an innovative solution that may well provide significant improvements for mobile users in rural areas.
The advantage of a wholesale mobile network approach is that it should allow operators to expand rural coverage with minimal capital investment, and as such allows the network to more quickly scale to meet demand. Additionally, if Altan manages to sign up multiple MNOs as customers, the rural infrastructure costs will be pooled between multiple operators, improving the economic outlook for all parties involved.
What these three different examples demonstrate is that there is no one “right” way to address the challenges of rural coverage. However, learning from the successes of operators in Finland and Canada, in particular, may provide some valuable clues for models of network sharing and partnership that reliably deliver a good mobile experience to customers regardless of their location, whilst still allowing for nationwide competition to deliver the best value to consumers. As networks begin to add 5G frequencies to their offering, it has never been more important to ensure that the entire region, not just its cities, benefit from the latest advances in mobile network technology.
Tom Luke
VP
