Venture what other operators have not ventured
So far, the Bottom of the Pyramid has been disregarded as an attractive market by operators in developing countries, as infrastructure based on existing solutions has been characterized by relatively high initial costs. Conversely, the average revenue per user (ARPU) at the Bottom of the Pyramid is relatively low, and in combination these two factors have contributed to unprofitable return on investments. This in turn has entailed reluctance among the operators to invest in infrastructure in low income areas - the business case simply has not been cost-effective for the operators so far.
 
Over a period of time RTX Network Systems has further enhanced its efforts to provide innovative and cost-effective alternatives to the existing solutions on the market; thereby, targeting the Bottom of the Pyramid. With a less cost-intensive initial investment it is now possible for operators to leverage their return on investments; thus, making the Bottom of the Pyramid a profitable market for the operators to target.
 
Walk away from the never ending head-to-head competition
The operators in established and mature markets are suffering from the never ending head-to-head competition fighting to win business from the same customers. The offering is constantly increasing with more and more services and the revenue per subscriber reduces over time. The introduction of more and more flat rate accounts with a constantly increasing demand and expectation of higher service level places the operators in a very tough competition.
 
By introducing a competitive solution designed to serve the Bottom of the Pyramid in a cost-effective way, RTX Network Systems now enables operators to walk away from the never ending head-to-head competition, and look for new and extended revenue in an untouched market with a vast growth potential. The operators, who are able to establish themselves in such a market, will be able to operate there more or less alone without significant competition.
 
As a result more and more operators in developing countries are beginning to see the real potential of RTX Network Systems’ Wireless IP Network solutions, as these can help opening up unexploited markets by overcoming one of the major obstacles in providing the Bottom of the Pyramid with wireless telephony and broadband data services. 
 
The Wireless IP Network solution
The solution from RTX Network systems is based on a wireless access network connection, which reaches the last mile with both wireless broadband data and telephony services. The design of the Wireless IP Network solution makes it possible to deploy the system in a flexible and scalable way, where coverage is only supplied to real signed-up and paying customers. This means that the infrastructure investment is scalable and follows the customer base as it grows. As the wireless installations are so simple and scalable in the field, the operators can fulfil their obligations in concessions even without having a fully installed infrastructure in place up front.
 
The Wireless IP Network solution is offered in different configurations:
1. The ‘Connect-to-Satellite’ solution is configured to serve rural areas, where the backhaul is an IP based satellite connection with low bandwidth usage. The solution handles local calls locally even without an open satellite connection, and is thereby only loading the satellite backhaul when an external call or data connection enables the satellite link.
 
2. The Operator solution for public telephony and broadband data services is configured to serve public environments in large scale – this is typically a number of cities in the size of 10-50,000 citizens, where coverage is rolled out as the number of customers grows. The solution is unique for housing developments for low income residents, where typically several thousand of houses are placed within a certain area covered with wireless telephony and internet services. With the increasing demand for offering internet and telephony services in such kind of environment, the solution fills out an open demand for cost-effective solutions with a high level of service offerings.
 
Creating a win-win situation
Apart from the commercial advantages in serving the Bottom of the Pyramid (e.g. vast market size, rapid growth, and a less competitive environment) there are also significant social benefits for the people constituting the Bottom of the Pyramid. Furthermore, the deployment of communications infrastructure in developing countries will have a spillover effect on the development of society in general, presenting poor consumers with opportunities they would not otherwise have had. It is this win-win situation that underlies the sustainability of the market at the Bottom of the Pyramid.
 
The Bottom of the Pyramid constitutes the market made up by the poorest people in the world. These people primarily live in Africa, Eastern Europe, Asia, and Latin America and living on less than $2 per day. Approximately 70 percent of the world population constitute the bottom of the pyramid.
 
For further information please contact Georg Steen Christensen, Operation Manager, gec@rtx.dk.