Rural networks cost three times more, but are feasible says Telefonica R&D chief

by Steve Blum • , , ,

Higher costs, relative to the number of homes served, and lower income levels, compared to urban areas, is the fundamental business model problem that has to be solved in order to extend wireless broadband service into rural area. But it can be solved, even in some of the most extreme cases. David del Val, Telefonica’s head of research and development in Latin America, described the hurdles he’s encountered delivering Internet connectivity to remote regions, in a speech at last week’s inaugural Mobile World Congress Americas trade show in San Francisco.

The challenge, del Val said, is that connecting a person in a rural community to mobile service is three times more expensive than in urban areas.

Telefonica is installing cell sites in Brazil along the Amazon river, in the mountains of Chile and in other areas where customers are thin on the ground. Building middle mile backhaul facilities are a particular challenge, he said. Satellite is ubiquitous but the service comes with a high price tag. So does fiber. Microwave links are also expensive, particularly when the cost of maintaining them in very remote areas, such as the Amazon basin, is factored in. Even so, it’s a workable solution according to del Val.

Then cell sites have to be built. The cost of building access points in rural areas might be comparable to costs in cities, but population densities are lower, so more towers are needed to reach the same number of customers. Operating costs also increase the farther away you get from urban areas. Del Val said that it can sometimes take days for an engineer to get to a base station in the jungle when there’s a problem.

Some of the communities that del Val serves are poorer and far more remote than any you would find in California. The numbers here are different, but the equation is the same. If it can be solved in the jungles of Brazil, it can be solved here too.