White Paper:

Bringing Telecom to Rural India

VNL, July 2008

As the developed mobile markets all over the world ap-

proach saturation, the industry has begun to consider
‘the next billion’ users. These are the rural populations
living beyond the reach of traditional communications
networks of any kind.

Rural India is a prime example of the opportunity:

THE OPPORTUNITY
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720 million potential mobile The rural consumer in India cannot pay the $50 per
users await. month typical of London, Tokyo and Sydney. Nor can

A
they pay the $7-10 per month typical of Delhi and
s the developed mobile markets all over the
Mumbai. But research and experience shows that they
world approach saturation, the industry has
can and will pay around $3 per month today – even
begun to consider ‘the next billion’ users. These are the
before the impact of communications increases their
rural populations living beyond the reach of traditional
ability to pay.
communications networks of any kind.

The challenge is to deliver a mobile service

“India, not China, will be the greatest to rural users that can not only be viable, but
contributor to the ‘next billion’ mo- be profitable at these low levels of Average
bile users, adding 294m subscriptions Revenue Per User (ARPU).
between 2007 and 2010.”
– PYRAMID RESEARCH Currently, the mobile phone population in India is
The Next Billion: How Emerging Markets are Shaping the Mobile Industry Oct 2007
growing by eight million phones per month. But rural
teledensity has yet to break the 5% barrier (despite

Rural India is a prime example of the opportunity: television penetration levels of 26% and growing).

• A huge population – 720 million people in

NET MOBILE ADDITIONS
630,000 villages across 3.2 million square miles. 2007-2010: 1,4bn

{
1,500

• A massive economy – over 50% of India’s total India

1,200
GDP. There are almost same number of middle to 61% of
net China
high income households in rural areas (21.16 mn) 900 additions United States
Pakistan
as urban India (23.22 mn). Indonesia
Nigeria
Brazil
600 Mexico Turkey
Iran

• A booming economy – with the consumer

300 Rest of world
durables market, for example, growing at 25% per
year (vs 10% nationally). 0

• A parallel economy – with the same needs as Source: Pyramid Research

developed markets but a reduced ability to pay for
them.

The reason is simple: current mobile technology can-

not reach the hundreds of millions of people ready to
embrace it.

© 2008 VNL | www.vnl.in

THE OBSTACLES
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“You CAN’T get there from here.” The challenges of rural India

R ural India has a massive pent-up demand for

mobile services; a limitless supply of low-cost
labour to help deploy them; and a large entrepreneurial
There are four main difficulties in serving rural commu-
nities, each one of which has appeared insurmountable:

class ready to deliver services at the local level. Cheap
handsets are available and, unlike urban locations, space
for Base Stations is plentiful.
• Power challenges – Most of rural India is not
served by the power grid. Some areas may get ‘ag-
ricultural power’ – two hours in the morning and
evening – but even this is the exception.
When fuel can be afforded and delivered, power

“The cost of passive infrastructure is tends to come from diesel generators. The com-
bination of poor fuel quality and poor generator
enormous and telecom companies
maintenance severely limits the life of any generator.
should consider the infrastructural
challenges in the rural areas.” • Revenue challenges – Rural India can pay for
– SANJEEV AGA, CHAIRMAN mobile services, but only around $3 per month. The
CII National Committee on Telecom and Broadband
cost base of any solution has to be geared to these
ARPU levels.
As powerful as these market drivers may be, the inhibi-
• Skills challenges – There are no trained telecom
tors are even more formidable.
engineers and few people can read or write. This
makes the installation and maintenance of GSM
The obstacles to providing profitable mobile services
networks highly challenging.
to rural India (and similar rural populations all over
the world) come from two main sources: the inherent • Access challenges – These are extremely remote
constraints of the market – its geography, economy and communities, served by poor roads and no other
skill levels; and the inherent limitations of current GSM significant infrastructure.
technology, processes and models.

Despite these challenges, other complex services have

profitably been delivered to rural India (including cable
COMMUNICATION SPEND
% of GDP, by region, 2006 television).
5% 2006 2010

4% Unfortunately, the mobile systems in use all over the

Global average: 3.2%
3% world today seem to have been designed to maximise
vulnerability to these four challenges.
2%

1%
Today’s GSM is not ready to serve rural India.
0
North Western Asia Pacific Eastern Africa & Latin
America Europe Europe Middle East America

Source: Pyramid Research

© 2008 VNL | www.vnl.in


The limits of traditional GSM
GSM, as we know it today, was designed for urban and
suburban locations in developed markets. It’s a general-
purpose network entirely unsuited to the unique chal-
lenges of serving rural and remote communities.
“New cellphone makers and service
providers understand that they can
make money by bringing cellphone
service within reach of people who
live on $2 a day.”
– BUSINESS WEEK, SEPT. 24 2007
Mapping the inherent limitations of today’s GSM to the
challenges of rural deployment, we can see the massive
gulf between the opportunity and the tools available to
seize it:
• Deployment demands – The typical GSM Base
Station includes three refrigerator-sized cabinets,
mains power supply, large battery backup, dual
air conditioning units, a tower or roof site and
backhaul capability. All this is housed in some kind
of building – either existing or built for purpose.
Just getting all of this equipment to a rural
community multiplies the cost of deployment –
before provisioning, civil engineering, radio plan-
ning, testing and maintenance is factored in.
• Power demands – Power was clearly not an issue
when GSM was conceived. A typical Base Station
site alone requires about 3000W to run – not in-
cluding any Base Station Controller (BSC) or Mobile
Switching Center (MSC).
Due to power availability constraints even in ur-
ban settings, the current GSM networks in India are
© 2008 VNL | www.vnl.in
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estimated to burn about 1.8 billion litres of diesel
each year. Fuel quality, transport challenges and
the demands of generator maintenance make this
power source unsustainable for rural GSM deploy-
ments.
• Skills demands – A typical GSM Base Station
deployment process takes around three months
from planning to commissioning, and involves
dozens of people including radio network planners,
site acquisition teams, site engineers, civil engineers,
equipment vendor installation professionals and
commissioning teams from the operator.
This supply chain can barely meet the demands
of the urban mobile infrastructure. It could never
scale for the rural opportunity even if it could do so
cost-effectively (a clear impossibility). The workforce
in rural India has none of the skills necessary to
deploy and maintain today’s GSM.
• Cost demands – A typical GSM Base Station alone
costs in the region of $100,000, before BSC and MSC
costs are factored in. Funding this capital expendi-
ture requires the kinds of population densities and
ARPU levels found only in urban areas.
Rural communities simply do not justify the cost
of today’s GSM infrastructure – and no government
subsidy can fill the gap.
Taken together, the challenges inherent to the rural op-
portunity and the limitations and demands of tradition-
al GSM create a circle that is impossible to square.
Asking traditional GSM to serve the popula-
tion of rural India is like getting an elephant
through the eye of a needle. We need to
take another approach.
THE SOLUTION
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WorldGSM™: driving down • Self-deploying – the entire WorldGSM™ Base

the threshold of viability Station packs into two carts and is easily installed
by unskilled field staff who may not be able to read

W orldGSM™ is a new approach to delivering

profitable mobile services to rural India and
beyond. It’s the first example of microtelecom, the re-
or write. No buildings, power, air conditioning. Just
point it South and turn it on.

engineering of telecommunications to meet the needs • Near-Zero Maintenance – top up the batteries
of rural and remote communities. every three months; update software remotely and
perform simple swap repairs if needed.

• Cascading Star Architecture™ – a unique,

“Affordability and availability of
modular architecture optimised for low-cost rural ex-
infrastructure will be key challenges pansion; with local switching to minimise backhaul.
for telecom industry to reach the
rural customer.”
– MR. D SHIVAKUMAR, VP & MANAGING DIRECTOR
While the major equipment vendors focus on the latest
Nokia India
services for developed, urban markets, VNL has quietly
re-engineered ‘plain vanilla’ GSM to make it fit for a
whole new purpose.
WorldGSM™ is a complement to existing GSM networks,
extending them to seize the rural opportunity. It is:
WorldGSM™ is the first fully-fledged mobile infrastruc-
ture that’s completely independent of the power grid.
• Low-power – at less than 100W per Base Station,
the entire system can be run on solar power. No
power grid or generator necessary.
ARPU

• Low cost – a fraction of the cost of traditional $50 Ordinary Base Station

GSM Base Stations; profitable at very low densities y

$40 ilit
and ARPUs. v iab
of
ld
ho
$30 res
Th
• Fully GSM standards compliant – easily links
to existing networks, dramatically extending their $10 WorldGSM™ Base Station

Barrier of entry to BoP markets

reach. $3
$0
$0 $25,000 $50,000 $75,000 $100,000
• Self-contained – With BSC and MSC functional- BASE STATION CAPEX
ity integrated and deployed in the field on Base Source: VNL

Station towers.
Driving down the threshold of viability to the $3
ARPU level requires an order of magnitude cost reduction.

© 2008 VNL | www.vnl.in

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The WorldGSM™ design challenge The WorldGSM™ hardware

WorldGSM™ has been designed from a blank sheet
of paper to remove all unnecessary power consump-
tion and all extraneous costs. Anything that does not
contribute directly to setting up and terminating phone
calls has been removed and everything remaining has
been squeezed to minimize power and remove cost.
Developing our own hardware gives VNL the ability to
drive down power, cost and size to a degree that no
existing hardware could match.
There are three boxes at the core of the WorldGSM™
system:

To achieve this, VNL has had to:
• Design and build our own hardware –
to maximise control
• Develop and test our own software –
millions of lines of code that re-creates GSM for
rural use
• Re-engineer the physical infrastructure –
with new form factors that can be deployed by
anyone, anywhere, in days
• Invent a new network architecture – to support
limitless scalability at low cost
• BlueBox™ – the low-power, low-cost BTS (Base
Transceiver Station) in a box. Complete GSM Base
Station functionality in a single box, including
microwave backhaul. It comes in two capacities –
1 TRX and 2 TRX.
• GreenBox™ 160i – the world’s first rural-
optimized BSC (Base Station Controller). One
GreenBox™ 160i supports up to 16 BTS nodes
(WorldGSM™ Rural, Road or Village sites).
• OrangeBox™ 600i – the compact MSC (Mobile
Switching Center) for rural deployments. One Or-
angeBox™ supports up to 6 GreenBox™ 160i nodes,
serving over 10,000 subscribers.(WorldGSM™ Rural,
Road or Village sites).

The result: a complete GSM system that needs no grid

power, can be carted to site and erected in days by
unskilled people.

The raw materials that make up the solution include

such things as the open source Linux operating system,
WorldGSM™ WorldGSM™
off-the-shelf signal processors, hardware-store brackets, BlueBox™ 901 OrangeBox™ 600i (MSC)

a few bags of concrete, solar panels and a compass.

This is GSM, but not as we know it.

WorldGSM™ WorldGSM™
BlueBox™ 902 GreenBox™ 160i (BSC)

© 2008 VNL | www.vnl.in

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By foregoing the use of Application Specific Integrated Two deployment options

Circuits (ASICs) VNL has greatly reduced the cost and
WorldGSM™ can be deployed in either of two main
risk associated with hardware development.
configurations:

The result is small, low-power, low-cost hardware with

• Rural Deployment – for low-cost, blanket cover-
the flexibility of a software-driven system.
The WorldGSM™ software
The WorldGSM™ core network is built on the MontaVista
distribution of Linux. This confers the following advan-
tages:
• Extreme stability – carrier-class uptimes
age of an entire rural area. Using the Cascading
Star™ architecture to scale with demand on a
modular basis as needed.
Rural Deployments combine the WorldGSM™
Rural Site – a 21-metre freestanding tower – and
the WorldGSM™ Village Site – a rooftop-mounted
Base Station that clusters around the towers.

• Flexibility – to choose from a wide variety of

• Road Deployment – for highly focused cover-
silicon and hardware
age along major roads and arteries, often running
• Ubiquity – easy to find skills and resources between towns and villages with existing coverage.

• Open Source – free and easily adapted Road Deployments use bi-directional antennas to
create a string of coverage along roads, ending in a
• Wide acceptance – by operators all over the world
BSC to connect to the main GSM network.

On top of the operating system, VNL has developed its

The deployment options can be easily combined into a
own Linux-based version of the GSM standard on which
single WorldGSM™ network or as simple extensions to
the world’s mobile networks run.
any existing GSM network.

The software covers everything from power control and

stripped down handover algorithms to a wide range of
compelling end user features.

© 2008 VNL | www.vnl.in

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WorldGSM™ RURAL coverage PRODUCTS

For rural deployments, the WorldGSM™ system comprises the Rural Site (typically deployed as a hub),
Village Site, the OrangeBox™ 600i (MSC) and the GreenBox™ 160i (BSC) — typically co-located at the
end node of the host network.

Reaching into villages

   Village Site is especially designed for mounting on rooftops within villages.
The photovoltaic panel and battery packs are mounted beside the mast.

Expandability
   Each Rural Site can support up to 500 users and each BSC can support up
to 16 1 TRX BTS nodes.

1 WorldGSM™ Village Site

WorldGSM™
2 Rural Site

WorldGSM™
3 WorldGSM™
OrangeBox™ 600i (MSC)
4 GreenBox™ 160i (BSC)

© 2008 VNL | www.vnl.in

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WorldGSM™ ROAD coverage PRODUCTS

For road deployments, the WorldGSM™ system comprises the Road Site, equipped with high-gain di-
rectional antennas, the OrangeBox™ 600i (MSC) and the GreenBox™ 160i (BSC) — typically co-located
at the end node of the host network.

Expandability
   Each Road Site can support up to 500 users and each BSC can support up to
16 1 TRX BTS nodes.

WorldGSM™ WorldGSM™ WorldGSM™

1 Road Site 2 OrangeBox™ 600i (MSC) 3 GreenBox™ 160i (BSC)

© 2008 VNL | www.vnl.in

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WorldGSM™ RURAL DEPLOYMENT

Typical rural deployment
Host network Village Sites are mounted on rooftops within a 5km
radius of a Rural Site. These “stars” are strung along from Village Site is mounted
OrangeBox™ 600i (MSC) on rooftops throughout
any existing GSM network node, extending its reach. An villages. Rural Site is
centrally deployed.
OrangeBox™ 600i MSC and a GreenBox™ 160i BSC are co-
GreenBox™ 160i (BSC)
located at the end node of the host network.
Village Site
It’s fast, it’s simple and it drives capex
and opex to new lows.
Rural Site

Highway / main road

20 km 10 km 5 km

65 km coverage corridor

WorldGSM™ ROAD DEPLOYMENT

Typical road deployment
WorldGSM™ Road Sites are deployed along any rural road. A string of Road Sites ends at any
existing network node, with a co-located OrangeBox™ 600i MSC and a GreenBox™ 160i BSC.
It’s fast, it’s simple and it drives capex and opex to new lows.

Host network

OrangeBox™ 600i (MSC)

GreenBox™ 160i (BSC)

Road Site

Bi-directional coverage

Road Road MSC HOST

Site Site BSC NETWORK

The WorldGSM™ Road Site uses two high-gain directional antennas that point
in opposite directions, creating a bi-directional coverage pattern.

© 2008 VNL | www.vnl.in


The WorldGSM™ Architecture
WorldGSM™ is based on VNL’s Cascaded Star Architec-
ture™, a unique approach to Radio Network Planning.
Highway / main road
Cascaded Star Architecture™ has several important
advantages:
• It allows WorldGSM™ to use panel or omni
antennas to provide coverage.
• It provides an easy entry into previously
uncovered areas.
• It enables low-cost expansion as uptake increases.
All three contribute significantly to the cost, power sav-
ings and sustainability of the WorldGSM™ system.
© 2008 VNL | www.vnl.in
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Extending existing GSM networks
While WorldGSM™ can be a complete standalone
GSM network, it comes into its own as a solution that
extends the reach of existing networks by going where
they cannot go.
In this way, WorldGSM™ creates a win-win-win scenario:
• Operators win because they can now address
massive rural markets cost-effectively and profitably.
• Users win because they get affordable communi-
cations for the first time.
• Current equipment vendors win because their
networks are extended further – and the new users
require expansions of the core network.
WorldGSM™ is specifically designed for licensed opera-
tors with existing networks – the companies with the
most to gain from the rural opportunity (and the keen-
est to seize first mover advantage in remote communities).
The Bottom Line
Unlike generic GSM, WorldGSM™ has been specifically
designed for one specialist application: connecting pre-
viously unconnected rural communities in a profitable,
sustainable way.
No other GSM solution costs so little, uses so
little power and is so small and easy to de-
ploy. This makes it the ideal solution for seiz-
ing the massive opportunity represented by
rural India and beyond.
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About VNL
VNL helps mobile operators
reach rural markets profitably.

VNL is 100% focused on this massive opportunity. Our

management team has deep experience at the highest
level of the telecom industry and has long-established
relationships with the key players in India, including the
major operators, equipment vendors, suppliers, govern-
ments and NGOs.

The microtelecom revolution is ready to begin and VNL

is leading the charge.

Contact VNL
E-mail: info@vnl.in
Website: www.vnl.in
Blog: blog.vnl.in

VNL INDIA
VNL, Vihaan Networks Limited
246, Phase IV, Udyog Vihar,
Gurgaon, Haryana 122 015, INDIA
Tel +91 124 4311600-609

VNL EUROPE
VNL Europe AB
Finlandsgatan
SE 164 74
Kista, SWEDEN
Tel +46 8 793 9080

© 2008 VNL | www.vnl.in