Thursday, August 9, 2012

Broadband: wired or wireless?

I always had this question in my mind; wired or wireless to reach the rural.

All the fixed line Communication Service Providers (CSPs) in both developing and developed countries have started their networks form the urban areas (ex: Main Switching Unit (MSU) in Public Switched Telephone Network (PSTN)) and move to sub-urban (ex: Remote Switching Unit (RSU)) and then to rural (ex: Line Extension Unit (LEU)). For both copper and fiber, this has been the practice for the last 150 years. Even wireless CSPs have followed the same path first covering the urban, then sub-urban and then rural. Two of the most obvious reasons for this, is the demand and the affordability.

When it comes to broadband (BB), now we have 2 options wired or wireless. While there are methods to re-arrange an existing copper network by shortening the copper distance and introducing FTTN/C/B to deliver BB using ADSL2+/VDSL, the re-arrangement of wireless networks are not that feasible. To cover the green areas, the operators need to deploy new networks; copper, fiber or wireless.

As you move from the urban to rural, the population/house-hold density decreases, making the requirement of coverage large. The 2 options remain as fiber and wireless (ex: LTE). Deploying new copper is not a choice any more.

But the question is, once you reach the rural, both demand and affordability decreases, especially in developing countries. On the other side, the requirements are becoming more scattered in nature making wired networks prohibitive. Therefore the ideal choice is wireless, because of the less demand, less affordability and scattered nature.

So, the viability of FTTH is only applicable in urban/sub-urban areas where the required bandwidth is not deliverable even with the existing copper network re-arrangement as described above or the copper is outdated/degraded/old. For other areas (rural) wireless is the only viable options, especially for a developing country. Please keep in mind that the green areas will most of the time are rural.
For a case study, I'll take my own country as an example. The population of Sri Lanka, a developing country, as at March 2012 is 20.3 million (approx.) [1]. According to [2] 78% of the population lives in rural areas. If we assume a house hold has 4 people, the number of house-holds is 5 million (approx.). 78% of this is 4 Million (approx.).

But, according to countries regulator [3], as at March 2012, the number of fixed lines in Sri Lanka (including CDMA) is 3.6 million. However, we need to keep in mind that big corporates use hundreds of lines per location. Therefore, we cannot use 3.6 million for the calculation.

The point however is, 78% of the households/population are rural. To reach this we have to go with wireless. This is quite evident from the figures in [3], where the mobile penetration is 91% while the fixed line penetration is 18% (approx.). This 18% is actually the saturated figure of urban and sub-urban. But when the rural areas develop (when the demand and affordability increases) the 18% will increase as explained in my previous post. In [3], the Internet penetration is also high with mobile (if calculated, 4% approx.), whereas for fixed it's only 2%, if calculated. Obviously the BB is also will follow the same percentages.

On the other hand, the 78% includes large number of Small and Medium Enterprises (SMEs), which are the main contributors to the country’s economy. For them to grow and the country to grow, the SMEs need Information Communication Technology (ICT) facilities. So the operators and the country have a great challenge to provide them the required services. Operators need to invest cautiously making sure they get positive Return-On-Investment (ROI) at the same time increase the footprint of their service coverage.



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