Providing internet access to rural areas
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ISOCEL aims to provide affordable internet access to all of Benin through a public-private partnership model. It plans to establish ICT Community Centers in six rural cities to provide training, internet access, and technology services. The government will support this by providing building space and subsidizing training costs. ISOCEL will cover infrastructure and ongoing services. These community centers will help lower barriers to rural internet adoption by improving ICT skills and access while also serving as sales and support hubs. If successful, this model could profit ISOCEL through new subscribers and goodwill while also achieving social goals of digital inclusion.
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Providing internet access to rural areas
- 1. Providing internet access to rural areas 12 November 2009
- 2. Introduction to ISOCEL ISOCEL is a leading and innovative provider of Internet services in Benin that offers unparalleled quality, service and value at an affordable price. Mission ISOCEL : “ Affordable and reliable internet for all.“ The company uses a combination of Wi-Fi and Motorola Canopy as access network. ISOCEL provides customers with low cost entry packages such as a refurbished Pentium 4 computer, CPE, installation and one month internet for a total of FCFA 134.000 (US$ 300).
- 3. Key company data License obtained in 2007; Operations launched in February 2008. ISOCEL currently is the second largest ISP in Benin: 3,300 subscribers, a market share of 20%, over 80% market share of the Broadband ISP market in Benin. ISOCEL network covers all departments of the capital city Cotonou. The company is in the process to increase network capacity to 45,000 customers and roll out services to six secondary cities in Benin.
- 4. Benin internet market The Benin internet market is still in an early stage 160,000 internet users in 2008; market penetration of only 1.7% Around 15,000 internet subscribers High growth rate is expected – Internet users 1 - 2.5 million in Benin by 2015 90% internet connections in Cotonou Forecast Internet Subscribers 0 50000 100000 150000 200000 250000 300000 2009 2010 2011 2012 2013 2014 2015 base case worst case
- 5. Economic effect of broadband is huge Source: World Bank; Qiang 2009
- 6. Hurdles to growth internet penetration High level of illiteracy: In Benin 60% of the population is illiterate. Lack of physical ICT infrastructure: Virtually no broadband access networks outside Cotonou. Lack of ICT skills and knowledge: People in rural areas have no experience with computers. High costs of Internet connections and equipment: High costs of computer, High costs of CPE’s, High costs of international bandwidth.
- 7. The hurdles are expected to be lowered because of: Strong government focus on education Only 7% of the under 15 years population in Cotonou is illiterate. Increased disposable income of the Beninese: Annual GDP growth ranges between 4% and 6%. Increasing availability of refurbished computers, netbooks and cheap CPE’s: Refurbished PC prices are available for US$ 75, CPE’s and dongles become available for US$ 20, and US$ 40. Decreasing international bandwidth prices due to expected competition and buying bulk: With ACE, GLO and SAT 3 upgrade, there is sufficient capacity available. In Benin, hurdles are getting lower
- 8. Internet penetration almost exclusively in the biggest city of Benin. Market potential rural areas remain untapped. Despite lowering hurdles, rural penetration stays behind because of: Limited ICT knowledge, Lack of availability of computers, Lower literacy levels. Through a public private partnership with the government, ISOCEL is expecting to break the existing barriers and bring internet to the rural communities. Rural internet penetration
- 9. ISOCELs answer: Community Centers The ICT Community Center will be the place where people can experience the benefits of information and communication technology.
- 10. ICT Community Center concept Create a network in the rural areas to connect these areas to the Internet. Establish ICT Community Centers where people are trained in to use computers and internet. Government support: supply the six community center buildings free of charge, subsidizing 50% of the € 40.00 training costs. Isocel will provide ICT infrastructure and services. The ICT Community Centers can function as a sales outlet for internet subscriptions and related ICT products and services.
- 11. ICT Community Center Services Diversified portfolio of services directed at its target groups will be offered:
- 12. ICT Community Center USP’s Unique Selling Points ISOCEL Community Centers: The main distribution channel close to the local people, Turnkey ICT solutions provided to businesses and institutions, Outstanding customer support level, Strong support from the national government and municipalities. The combination of services offered by the Community Centers creates opportunities for ISOCEL as well: ISOCEL will be able to reduce roll out costs through public private partnership, ISOCEL will be able to benefit from a first mover advantage and get additional subscribers, ISOCEL will create a lot of goodwill within the local communities.
- 13. Roll out plan ISOCEL Community Centers The coverage expansion will be targeted at six secondary cities: Djougou Porto-Novo Parakou Natitingou Ouidah Bohicon
- 14. Roll out plan ISOCEL Community Centers 51 fixed broadband wireless base stations linked to backbone. Base stations linked to ISOCEL’s unique NOC in Cotonou. Substantial resources and management attention required Hire a new staff, Train local employees. Development time: 12-18 months
- 15. Roll out plan ISOCEL ICT Community Centers The ICT center requires three main resources (in order of importance): Bandwidth Benin Telecoms has built a fiber backbone from Cotonou to the North. Power SBEE (National Power Company). Knowledge and Training materials Internationally accredited training companies. Materials to be applied in more advanced training programs by training suppliers.
- 16. Summary Mission ISOCEL “ Affordable and reliable internet for all.“ Community Centers provide an opportunity for ISOCEL to profit from ICT in the broadest sense: ISOCEL Community Centers facilitate s social development Enable communities to develop computer skills and knowledge, Ensure internet access for rural areas, Stimulate social development. While at the same time, resulting in revenue growth for ISOCEL. ISOCEL Community Centers ensure a both profitable and sustainable business model.
- 17. Thanks ! Questions ?