Rural Cell Phone Technology in Pakistan

1
Rural Cell Phone Technology in Pakistan

• Brian Mantel
• 3/3/06

2
Country Overview

• Pakistan
• GDP USD 2,400 per capita (USA 41,800)
• mostly hot, dry desert temperate in northwest
  arctic in north
• Population 162,419,946
• Area 803,940 km²
• Pop Density 200/km² (USA 31/km² )

3
Balochistan Pakistan

• Area 347,190 km² (42 of Pakistan)
• Population 7,167,554 (4.4 of Pakistan)
• Population Density 20.64/km2
• Geography Rugged Mountains
• Water is Scarce
• Many of the people are tribal, and some are
  nomadic

4
Economics Overview

• Economic Factors
• What can the customer afford
• Where will they get funding
• How will it add value to their lives
• How much will the handset cost
• What is the investment cost of a base station
• Use GSM technology.
• New, Used, or Custom
• How much will the operator have to charge
• Initial Investment Costs
• Number of Customers
• Global Network Connection Fees (Termination)

5
Customer

• Extremely poor
• Sources of Income
• Farming, Fishing
• Animal Husbandry
• Trading Bazaars
• Coal and Minerals
• Natural Gas
• Government programs trying to shift customer to
  more industrialized sources of income.

6
Handsets

• New Phones from Manufacturer
• Benefits consistent phone to service, language
  set can be tailored to region,
• Disadvantage May be difficult to get small order
  at a good price.
• Prepaid Phones US 20
• Recycled (Used) Phones US 7 (ReCellular)
• Solar Powered Rechargers US 90 (Soldius)
• Public Pay Phones Near Markets/Bazaars

7
Target Area (15km by 12km )
8
Base Station

• Network Type GSM
• New No data available
• Used
• Base Transceiver Station US 12,000
• Other Misc Equipment US 3K 8K (estimate)
• Total US 15,000 - 20,000
• Custom
• Stanford Base Station Proposal
• Linux Based PC Used for Base Station Controller
• Entire Station for less than 15,000
• Supports 24 simultaneous voice transmissions
• Operator Owns Base Station After Investment Payoff

9
Initial Investment Funding

• Grameen Phone Might be interested in funding
  this.
• Grameen and Telenor have a similar service with 6
  million subscribers in Bangladesh
• They charge US 0.04 - 0.06 per minute for
  prepaid cell phone service.
• Grameen Bank
• small loans to the impoverished without requiring
  collateral
• Pakistan Government
• May be interested if shown that this plan would
  improve their economy.

10
Termination Fees

• Termination Fees for connecting customers
  through another cell or directly to the Global
  Network.
• In USA, termination within USA is about 0.02 per
  minute for small volume.
• USA to Pakistan Termination is about 0.13 per
  minute for small volume.
• Assuming within Pakistan Termination is about US
  0.02 per minute.
• Can also gain profit by terminating other traffic
  through this cell.

11
Customer Fees

• Assumptions
• Service covers about 8,000 people
• Termination Fees 0.02
• Investment 15,000 base station
• Usage 24 channels X 6 hours average per day
• Charge Customer US 0.025 per minute or
• Assuming 2000 customers, charge US 3.25 per
  month.
• After paying termination fees, leaves 1,300 per
  month profit to pay off investment and employees.

12
Economic Improvement

• People can start small industrial businesses and
  use these phones to find good prices on materials
  and to order those materials.
• As the phone service expands, it will need more
  employees who will be educated by the operator.
  Those employees will spend more money locally.
• More Money will come into the community from
  remote termination and more efficient businesses.