Small rural operators techno-economic analysis to bring mobile services to isolated communities: The case of Peru Amazon rainforest

Abstract

A large number of rural communities in developing countries do not have access to communications services, unlike urban areas where these services have rapidly grown. This connectivity gap is mainly caused by the urban-oriented business models of traditional operators, which are not cost-effective in regions that are characterized by isolation, low population density, and scarcity of resources. This paper analyzes a feasible and sustainable strategy to deploy mobile communications services (voice and data) in isolated communities in developing countries with less than 1000 inhabitants by combining appropriate low-cost technologies and an innovative business model fostered by recent regulation. This innovative model is based on the legal figure of the SRO (Small Rural Operator), which is specifically oriented to reach small communities in isolated rural areas. The results are based on a real deployment in 6 communities of the Peruvian Amazon, which was carried out by a consortium of universities, NGOs (Non-Government Organizations), and cellular operators. This deployment allowed us to obtain practical information on the cost structure of mobile networks in isolated areas, characterize the rural demand and the revenues associated with it, and understand how the business model of traditional operators could be adapted. This information permitted us to propose, implement and validate the SRO approach. The paper shows the results of this research and provides some lessons learned. The main conclusion is that the recent Peruvian regulation opened a niche market for SROs who want to offer services in isolated communities with less than 1000 inhabitants.