The Malaysian Insider :: Features
The Malaysian Insider :: Features |
| Powered by the sun, telcos open up cellphone’s final frontier Posted: 20 Dec 2012 08:00 AM PST JAKARTA, Dec 20 — Until this year, 1,000 or so residents of Mambi on Indonesia's Sulawesi island used their mobile phones as calculators, cameras and music players. But only if they rode up to five hours by bus or motorcycle over muddy roads could they actually use them for their primary purpose: to make phone calls or send messages. And they're not alone.  A study finds that 1.5 billion people lack access to a cellpone signal in Indonesia. — AFP pic This is primarily because cellular operators haven't considered connecting remote communities such as Mambi worth the cost. But with demand for cellphone services in rural parts of the developing world rising, and the cost of the technology to connect them falling, the equation is changing. That means rural folk like those in Mambi will form the bulk of some 700 million new cellular subscriptions in the next five years, reckon the GSMA. "The barrier to entry is no longer the device but the availability of the network," says Prashant Gokarn, chief strategy and planning officer at Indosat Tbk PT, Indonesia's second largest operator. This shift has led to a rash of moves by operators to reach beyond the low-hanging fruit of urban subscribers to connect "the unsignalled". Driving this shift are small companies like Ireland's Altobridge, which offers base stations at a fraction of the cost of traditional ones designed for urban environments. They are powered by solar panels, removing the need for regular shipments of diesel to keep them going, and also reduce the load on traffic back to the network - called backhaul. While installing an urban base station with tower, power and air conditioning in remote areas would cost around US$250,000, says Altobridge's marketing director Peter Tuomey, his solar powered station costs a fifth that. And the monthly costs are reduced in part by routing local calls back through the base station— rather than sending them over the satellite backhaul. Not all such technology is exclusive to smaller players such as Altobridge, but their willingness to share some of the risk has helped them carve a niche away from main players like Nokia, Siemens Networks, Ericsson and Huawei. India's Vihaan Networks Ltd (VNL), for example, has deployed hundreds of thousands of such base stations across the developing world. Says founder and CEO Rajiv Mehrotra of his bigger rivals: "We start where they stop." In Indonesia Indosat and Altobridge have jointly installed base stations in nearly 100 sites, including Mambi. That's only a start: Altobridge estimates 35 million Indonesians — about 14 per cent of the population — do not have access to a cellphone network. But it's already making a difference. In Mambi, for example, Altobridge sent one of its engineers, Australian Sean Heffernan, at the beginning of the year to set up two base stations covering a cluster of villages. He was surprised at what he found: not only was he told he was the first white man many of the villagers had seen, but he observed a relatively prosperous life. Mambi had a paved high street, school and restaurants, all partly funded by thriving cocoa, coffee and rice growing and remittances from relatives working overseas. But soon after the network was up and running, the change was visible. Residents could phone doctors in the regional capital, Makassar, check market prices of goods they sold like chillies and lemons rather than guess them, and order supplies from town instead of trekking several hours there and back. "It basically changed their lives," he said. That may only be the start. In Indonesia's far east region of Papua, where base stations have been in place longer, their deployment has been followed by the arrival of bank branches, government services and retail businesses, says Indosat's Gokarn. That's because such services all rely on communications. Djemi Suhenda, deputy president director of Indonesia's Bank BTPN, said his bank was keen to reach out to such communities, but must first wait for the telephone operators, or telcos. "As the economy grows, as the middle income grows, these are the future customers of telcos," he says. "And for us, it's simple: we're a mass market bank and so these are the customers we'd like to see." Indeed, research indicates the arrival of a cell phone signal does have an economic impact. A study for Nordic telecoms group Telenor by Deloitte in 2008 suggested that a 10 per cent rise in mobile penetration would boost the long-term GDP rate of a developing country by 1.2 per cent. Indian researchers came to similar conclusions in 2009. Key, though, to any wider deployment is going to be whether such moves pay off for operators. Indosat's Gokarn said that while his company recognises the benefits of being the first to arrive in a village like Mambi, figuring out pricing is key. Charge local users too much and you hit "miscall culture" — where users call a distant friend but hang up before he or she answers. That prompts the friend to call back, potentially losing the operator revenue to a rival network. Instead, Indosat cut tariffs. While the average revenue per user didn't necessarily rise, the increased traffic pushed up a more relevant metric: the average revenue per base station. "It's probably not a good model to price it very high," Gokarn said. This seems to match Altobridge's broader experience. "Mobile spend levels in these newly connected rural villages is generally on par with the national average," says Tuomey. "However, in some cases, we are actually seeing average monthly spend in rural villages exceeding the national average." For some the technology has more ways to go. University of California, Berkeley, PhD student Kurtis Heimerl has spent the past few months in a remote Papuan village testing a base station he helped develop that powers down when it's not in use, saving up to 80 per cent of the energy usually required. Incoming calls automatically wake up the unit, while outgoing callers can activate it with modified cellphones. "It's not about the cost of the base station anymore," he said. "It's power." Others would like to see telecommunications spread to rural areas more quickly by turning to open source software that in effect replaces much of the traditional hardware needed for cellular telephony. Indonesia technology activist Onno Purbo, for example, has been pushing the government to allow his open-source base stations to connect to existing providers. Deploying such technology is not only cheaper, he says, but it means communities don't have to wait for operators. "The long-term goal is to bring connectivity to those who don't have it," he says. "The normal strategy is to ask commercial operators to do these things." Onno has had little luck so far. More promising is the commercial deployment of technology allowing faster 3G connections to rural areas. While most solar-powered base stations only support voice, short message service and very rudimentary 2G services, the next step is to add more power-hungry 3G data. Altobridge's Tuomey says he's working to commercially deploy mobile broadband with Malaysia's Maxis. Whether its 2G or 3G, says VNL's Mehrotra, there's no question that there's pent-up demand. "We see the traffic and it's unbelievable," he says. "They talk, talk, talk. They want to talk to everyone." — Reuters |
| Diamonds are a German’s best friend this Christmas Posted: 20 Dec 2012 06:22 AM PST  A model holds the "Archduke Joseph" historial diamond. — AFP pic Demand for diamond rings and gold watches is also being fuelled by an uncertain economic outlook, which is making shoppers in Europe's largest economy seek out gifts more likely to retain — and possibly increase — their value. The BVJ German association of jewellers and watch retailers is forecasting sales of 5 billion euros (RM20 billion) this year, matching last year's record despite the euro zone crisis, and with over a third of that to come over the Christmas season. "If the trading we have seen in the last few days keeps up we may even improve slightly on last year," BVJ managing director Joachim Duenkelmann told Reuters. The BVJ says Germans are looking for security against the backdrop of the euro zone debt crisis, political uncertainty in the Middle East and continuing low interest rates. "People are investing in two things these days — diamonds and property," said one shopper admiring diamond rings and a single 2.1 carat diamond costing 63,000 euros in a window on Frankfurt's exclusive Goethestrasse shopping street. Interest rates in the euro zone are at an all-time low of 0.75 per cent, and many economists expect the European Central Bank to cut them further in early 2013 to try to revive the bloc's ailing economy. While European neighbours are tightening their belts, low unemployment and rising wages are also encouraging Germans, traditionally a nation of savers, to spend their cash. Data from the Bundesbank shows the proportion of disposable income that Germans put into savings stood at 8.8 per cent in the third quarter of this year, down sharply from 13.7 per cent in the first quarter, and compared with 10.4 per cent in 2011. "Consumers are therefore tending to put their finances into purchases that will keep their value, instead of leaving them in banks," market research group GfK said. The BVJ says gold, platinum and diamonds are seen as especially safe investments, and that while market prices of these metals have soared, that has not necessarily translated into sharply higher prices for jewellery. Gold prices are up around 7 per cent this year and set for a 12th consecutive annual rise, driven by low interest rates, concerns over the euro zone and diversification into bullion by central banks. HSBC on Tuesday raised its forecast for platinum prices in 2013 and 2014. Enduring value A study by Ernst & Young shows that 26 per cent of shoppers in Germany were planning to buy jewellery as gifts this year, up from 23 per cent last year. "No matter what happens to the piece of jewellery or to the economy, the material value of precious metals and stones will remain," the BVJ's Duenkelmann said. German retailer Douglas may be battling stiff competition from online retailers like Amazon at its book stores, but says its Christ chain of 209 jewellery stores is a bright spot. "Sales of diamond jewellery are currently on the up — whether as an investment or simply as a piece of beautiful jewellery," Chief Executive Henning Kreke told Reuters In the first nine months of its 2011/2012 business year, Douglas' jewellery arm saw a 10 per cent rise in sales to 291 million euros, with core profit up 7.6 per cent to 34 million. Staff at high-end jewellers in Frankfurt reported good demand for classic rings, necklaces and watches, especially those with diamonds. "People are looking for items that keep their value. We're definitely doing more business than last year," said a sales assistant at one jeweller who declined to be named because of company policy. — Reuters |
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