Ericsson has signed its first Managed Rural Coverage deal with MTN, bringing mobile coverage as a service to parts of central and northern Benin, a West African country where there was none previously.
Managed Rural Coverage is a cost-competitive solution whereby Ericsson enables operators to provide mobile coverage for a set period according to service level agreements and defined key performance indicators. In this case, Ericsson and MTN Benin have signed an agreement for five years.
Despite the rapid growth in mobile communications, commercially viable business models are still lacking in many rural areas. As a result, some 2.4 billion people still do not have access to the internet.
Ericsson aims to expand the “connectivity as a service” business to other countries as well.Indian telecoms such as BSNL, Airtel, Idea Cellular, Vodafone, Reliance Communications, etc. struggle financially to spread their winds to rural India. Ericsson’s mobile connectivity as a service will be one of the solutions to handle poor coverage in rural telecom markets.
Telecom Regulatory Authority of India(TRAI) says wireless subscription in Indian rural areas increased from 415.92 million to 418.36 million during July-August 2015. On the other hand, wireless subscription in urban areas increased from 567.29 million to 570.33 million.
Under the terms of this contract, access will be provided via low-power consumption Ericsson radio base stations running on solar energy to avoid the high costs and emissions associated with diesel generators. Transmission will be provided via satellite to avoid the high costs and civil works associated with building a microwave backhaul network in remote villages. In this way, it was possible to create a business model to provide mobile coverage to parts of Benin where people have to survive on less than 2 dollars a day.
Stephen Blewett, CEO of MTN Benin, says, "The overall mission of the MTN Group is to make our customers’ lives a whole lot brighter, and that starts with the basics of providing mobile coverage. We’re always interested in finding new ways of connecting people from all walks of life in Benin.”
Jean-Claude Geha, Vice President and Head of Managed Services at Ericsson, says, "Managed Rural Coverage is a new business model and it’s great that we can now announce our first contract with the leading operator not just in Benin, but in Africa as a whole.”
“We believe people in rural parts of Benin will benefit greatly from their new found mobile connectivity, which greatly increases access to information and services that support health, education and small businesses," Geha added.