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
Access Gap
Supply
Market Gap
low cost
Current Penetration
high income
Ongoing Subsidies!
Sustainability frontier
On-time Smart Subsidies!
high cost
First the Access Gap Modelling
Bridge thru:
Policy,
Legislation,
Regulation,
Taxation, Bridge thru:
Subsidies!
etc.
low income
Demand
6
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
• There may still be other reasons to justify subsidy!
– security, important activity in the area, etc., etc.
7
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 & benchmarks
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
Backhaul
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!
The Last Mile - 1
The Last Mile - 2
“Selected locations”
for 3G
Coverage Radius
assumptions
• Towns above 3,000 pers
•2G BTS (flat terrain) : 12 km
• Typically one 3G BTS / town
•2G BTS (hilly terrain): 5 km
• In Town-centers
•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
Cluster 1-3 Details
Population: 56,542
Land 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
Savannah
Major Highway: A3 Trunk
15
Cross-checking …
Using assumptions & calculations
described earlier, infrastructure
requirement is:
• 2G BTSs = 11
• 3G BTSs = 09
These results of 1 cluster were crosschecked using:
• Google Earth, &
• Software tool “Global Mapper”
2G LoS Coverage - on Google Earth
LEGEND
Towns
Villages
COVERAGE
09 2G BTSs
2G Coverage
.
3G LoS Coverage - on Google Earth
LEGEND
Towns
Villages
COVERAGE
08 3G BTSs
3G Coverage
.
2G & 3G LoS Coverage - on Google Earth
LEGEND
Towns
COVERAGE
Villages
09 2G BTSs
08 3G BTSs
2G Coverage
3G Coverage
.
Result of cross-check
Difference of two methods of calculating Infrastructure:
Calculation
Based
Mapping
Difference
Tool Based
2G BTSs
11
09
02
3G BTSs
09
08
01
Such small differences are normal.
The assumptions (used in “Calculation Based” method)
improve as one goes up the learning curve.
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
Based on assumptions
from international
experiences & benchmarks
• REVENUES
– ARPU
: US$ 4
– Uptake
: 50%
*Where fiber cannot be deployed
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”:
Some of the results
Cluster # Cluster ID
23
STATE
Zone
3G BTS
Population needed
2G BTS Total CAPEX Est. Subsidy
needed
($000)
($000)
177
200
207
204
175
176
178
BN-1
BN-3
BN-7
BN-6
BN-5
BN-4
BN-2
Benue
Benue
Benue
Benue
Benue
Benue
Benue
North Central
North Central
North Central
North Central
North Central
North Central
North Central
274,328
130,354
128,790
284,408
186,973
103,655
334,740
1,443,248
5
5
4
4
5
5
4
32
9
7
16
49
36
27
80
225
$4,482
$3,757
$5,905
$15,405
$11,788
$9,196
$23,891
$74,424
-$20,595
-$5,311
$785
$8,234
$9,979
$12,852
$25,532
$31,476
193
192
161
191
FC-4
FC-3
FC-2
FC-1
FCT, Abuja
FCT, Abuja
FCT, Abuja
FCT, Abuja
North Central
North Central
North Central
North Central
77,433
92,839
118,688
89,627
378,587
4
4
4
5
17
3
7
17
23
50
$1,918
$3,324
$5,845
$8,145
$19,232
-$4,018
-$2,000
$1,832
$11,644
$7,457
162
199
194
195
205
163
174
164
KG-2
KG-3
KG-8
KG-4
KG-7
KG-6
KG-5
KG-1
Kogi
Kogi
Kogi
Kogi
Kogi
Kogi
Kogi
Kogi
North Central
North Central
North Central
North Central
North Central
North Central
North Central
North Central
146,071
52,681
57,315
86,119
121,123
93,165
72,609
232,129
861,212
3
4
5
5
5
6
5
6
39
21
8
15
20
29
26
27
103
248
$6,848
$3,621
$5,997
$7,527
$9,676
$9,504
$9,071
$31,299
$83,542
$1,304
$3,636
$9,613
$10,364
$12,073
$14,957
$16,231
$58,218
$126,395
GBI proposed projects
Population
3,524,892
Clusters
35
Projects
8
3G BTSs
74
2G BTSs
556
CAPEX + 5-yr OPEX
US$ 186.11 Mn
Revenue over 5-yrs
US$ 97.29 Mn
Estimated Subsidy
US$ 88.82 Mn
24
Summarising
Collection of
data to
represent
market
structure
Evaluation of
service
provision
costs
thru network
assumptions
&
algorithms.
Potential
revenue
assumptions
Estimation of
subsidy
requirements
based on
international
trends &
benchmarks.
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.
Thanks
parvez@piftikhar.com
Lagos, Nigeria.
19th December 2014
A
Geopolitical Zones