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Bridging the Gaps
Industry Forum – Launch of ICT Access Gap Clusters
Lagos, Nigeria. 19th December 2014
Agenda
• Introduction
• Recap - relationship between USAID/GBI & USPF
• Access Gap Model
• Use of Cluster Modelling to propose projects addressing
identified gaps
• Summary and Conclusion
My own Introduction
• Former CEO of USF Pakistan (first employee!)
• From 2007 to 20011, USF Pakistan
~ 5,000 of kms of optic fibers
~ 300 small towns – half mil. Broadband connections.
~ 1,100 high schools & colleges Broadband in those towns
~ 3,500 remote villages voice Telephony
Tele-centers
Before USF – Country-head of Siemens Telecom
Now International ICT Consultant
Thailand, Indonesia, Samoa, Kiribati, Kenya, Bangladesh, …
USPF & USAID/GBI relationship
Dec. 2012: Advice & assistance with Strategic Planning process
Apr. 2013: Advise on Monitoring & Evaluation, incl. Training
Apr. 2013: Advise on Data Collection Processes, incl. Training
May 2013: Review of Gap Analysis Report of Fullplan Associates
Sep. 2014: Conceiving Projects with Budgets in Clusters
Nigeria USPF project & GBI
• Study of M/s Fullplan Associates Ltd; identified “uncovered” areas
• USPF grouped together villages & towns in uncovered areas in an innovative manner, calling them “Clusters”
• Then together with GBI, analysed the Cluster Database, to determine:
– what clusters need subsidies
– what the subsidies should be, and
– recommended projects, along with their budget estimates
5
First the Access Gap Modelling
6
Current Penetration
Market Gap
Access Gap
Bridge thru:Policy,
Legislation, Regulation,Taxation,
etc.
Bridge thru:Subsidies!
Demand
Supp
ly
On-
time
Smar
t Sub
sidi
es!
Ong
oing
Sub
sidi
es!
low
cos
thi
gh c
ost
low incomehigh income
Sustainability frontier
Using Access Gap Modelling
• Assessments of Cluster Database were carried out to
– Analyse market structure for telecom services, &
– Identify the “Gaps” in access as
• Gaps due to the Market
• Gaps requiring one-time subsidies
• Gaps requiring continuing subsidies
7
• There may still be other reasons to justify subsidy!
– security, important activity in the area, etc., etc.
To subsidise or not?• This ‘gap analysis’ followed determining:
1. The required Infrastructure to cover the identified gaps
2. Capex of the required infrastructure = A
3. Opex over a 5-year period = B
4. Revenue over a 5-year period = C
Based on assumptions from international experiences & bench- marks
Subsidy X =
(A + B) minus C
If X is negative (Rev. is more),
then no Subsidy
Answers needed to calculate Capex:
What is the distance from Cluster to National Backbone• Nearest fiber-node
What should the Last-mile (access) cater for:• Voice (2G)? or Data (3G)? or Both?
If both, then how 3G would be deployed:• All over or selected?
If at selected locations, then how to select?• Criteria?
What coverage area per BTS to be assumed?• Remember terrain!
9
Forward looking Technology:
backhaul (from cluster to national backbone) only on:
Optic Fiber!
Challenge: calculate distance to nearest fiber-node without authentic fiber maps?
And Superimpose on cluster map!
Backhaul
The Last Mile - 1•in this day and age?
Only 2G
•low-priced cellphones may not work•+ many more BTSs!
Only 3G
•2G all over, with 3G overlay at “selected locations” (just like in rest of the country)
Hybrid!
The Last Mile - 2
“Selected locations” for 3G
• Towns above 3,000 pers• Typically one 3G BTS / town• In Town-centers
Coverage Radius assumptions
•2G BTS (flat terrain) : 12 km •2G BTS (hilly terrain): 5 km •3G BTS (in towns) : 3 km
Explaining further with an example
Taking one cluster as example
Northeast Zone Adamawa State
Cluster 1-3
Adamawa Cluster: 1-3
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Cluster 1-3 Details
Population: 56,542Land Area: 96 mi2
Towns: Duda, Tahum, Damayi, Gwaram, Muchela Muchala, Kushinau, Sina Komde, Futudu Clan, Mayo Kwalia
Economy: Mining, Cattle, Tourism (Jimango Hills)Ecology: Grassland SavannahMajor Highway: A3 Trunk
Cross-checking …
Using assumptions & calculations described earlier, infrastructure requirement is: • 2G BTSs = 11• 3G BTSs = 09
These results of 1 cluster were cross-checked using:• Google Earth, &• Software tool “Global Mapper”
2G LoS Coverage - on Google Earth
COVERAGE
09 2G BTSs
Towns
Villages
2G Coverage
LEGEND .
3G LoS Coverage - on Google Earth
COVERAGE
08 3G BTSs
Towns
Villages
3G Coverage
LEGEND .
2G & 3G LoS Coverage - on Google Earth
COVERAGE
09 2G BTSs08 3G BTSs
Towns
Villages
2G Coverage
3G Coverage
LEGEND .
Result of cross-check
Such small differences are normal. The assumptions (used in “Calculation Based” method) improve as one goes up the learning curve.
Difference of two methods of calculating Infrastructure:
Calculation Based
Mapping Tool Based Difference
2G BTSs 11 09 02
3G BTSs 09 08 01
Cost & Revenue Assumptions• COSTS
– Cost of a BTS Tower : US$ 125,000
– Cost of 2G BTS equipment : US$ 60,000
– Cost of 3G BTS equipment : US$ 100,000
– Cost per km of Fiber : US$ 7,000
– Cost of Microwave backhaul* : US$ 67,500
– Yearly Opex, as of Capex : 35%
– Depreciation period : 05 years
• REVENUES– ARPU : US$ 4
– Uptake : 50%*Where fiber cannot be deployed
Based on assumptions from international experiences & bench- marks
The Result!After knowing the following:
1. The required Infrastructure to cover the identified gaps
2. Capex of the required infrastructure = A
3. Opex over a 5-year period = B
4. Revenue over a 5-year period = C
We just need to apply our “formula”:
Subsidy X = (A + B) minus C
If X is negative (Rev. is more), then no Subsidy
23
Some of the resultsCluster # Cluster ID STATE Zone Population
3G BTS needed
2G BTS needed
Total CAPEX ($000)
Est. Subsidy ($000)
177 BN-1 Benue North Central 274,328 5 9 $4,482 -$20,595200 BN-3 Benue North Central 130,354 5 7 $3,757 -$5,311207 BN-7 Benue North Central 128,790 4 16 $5,905 $785204 BN-6 Benue North Central 284,408 4 49 $15,405 $8,234175 BN-5 Benue North Central 186,973 5 36 $11,788 $9,979176 BN-4 Benue North Central 103,655 5 27 $9,196 $12,852178 BN-2 Benue North Central 334,740 4 80 $23,891 $25,532
1,443,248 32 225 $74,424 $31,476
193 FC-4 FCT, Abuja North Central 77,433 4 3 $1,918 -$4,018192 FC-3 FCT, Abuja North Central 92,839 4 7 $3,324 -$2,000161 FC-2 FCT, Abuja North Central 118,688 4 17 $5,845 $1,832191 FC-1 FCT, Abuja North Central 89,627 5 23 $8,145 $11,644
378,587 17 50 $19,232 $7,457
162 KG-2 Kogi North Central 146,071 3 21 $6,848 $1,304199 KG-3 Kogi North Central 52,681 4 8 $3,621 $3,636194 KG-8 Kogi North Central 57,315 5 15 $5,997 $9,613195 KG-4 Kogi North Central 86,119 5 20 $7,527 $10,364205 KG-7 Kogi North Central 121,123 5 29 $9,676 $12,073163 KG-6 Kogi North Central 93,165 6 26 $9,504 $14,957174 KG-5 Kogi North Central 72,609 5 27 $9,071 $16,231164 KG-1 Kogi North Central 232,129 6 103 $31,299 $58,218
861,212 39 248 $83,542 $126,395
GBI proposed projects
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Population 3,524,892
Clusters 35
Projects 8
3G BTSs 74
2G BTSs 556
CAPEX + 5-yr OPEX US$ 186.11 Mn
Revenue over 5-yrs US$ 97.29 Mn
Estimated Subsidy US$ 88.82 Mn
Collection of data to represent market
structure
Summarising
25
Concluding
Looking at the methodology and the results, the
Cluster Model for achieving Universal
Access/Service targets comes out as an extremely
useful tool to create Universal Access/Service
projects and can become a preferred methodology
for other countries too.
A
Geopolitical Zones
