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Rural broadband: the next frontier

There was a time when rural broadband was too costly and difficult to take on. But that is not the case anymore. In response to growing worldwide demand for such services in sparsely populated areas, Ericsson has introduced a number of high-performance broadband products to help operators establish themselves in this emerging market – and make them a profit in doing so.

March 28, 2006

Ericsson's rural products are aimed specifically at reaching profitability in a short time in areas with low numbers of subscribers. The products will be presented in Rio de Janeiro under the theme "Extend your Broadband Reach" from March 13 to April 2, coinciding with the Ericsson Racing Team's arrival in the Brazilian city at the end of leg four in the Volvo Ocean Race.

Among the products that can stimulate operator interest in exploring the rural broadband market is Ethernet DSL Access (EDA). Jonas Stålhandske, director of marketing at Ericsson, says: "With EDA, operators can make a profit from as few as 10 users, and that's unique. Previously, they would need several hundred users to have a solid business case."

EDA is small and modular, addressing smaller installations, and is used when copper quality is good. When copper is non-existent or the quality is poor, wireless solutions such as WiMAX or HSDPA are good options.

A common problem is the lack of backhaul capacity in rural areas. To solve this, Ericsson offers MINI-LINK, microwave transmission networks. Stålhandske says: "EDA and WiMAX are the products used to reach end users, while MINI-LINK is used to backhaul these two products. Basically, we take traffic to EDA and WiMAX via MINI-LINK.

"The benefit of a microwave transmission network is that it can be rolled out for as little as one-tenth of the cost of a fiber transmission network over the same distance."

Stålhandske says operators not only save money by adopting Ericsson's rural broadband technology, but also get superior products that have the potential to create new and better business opportunities. "Our EDA solution is very advanced and we are at the forefront of this market. And when it comes to MINI-LINK microwave equipment, we are the leading supplier. The portfolio we offer for rural broadband is very adaptable and you don't have to pay a lot. There is a sort of pay-as-you-grow thinking behind all our products," he says.

There is already great interest in Ericsson's products. Several operators have signed up; among them Türk Telekom, Turkey's biggest wireline operator. Jan Kemvall, president Ericsson Turkey, says the MINI-LINK portfolio is the most reliable and cost-efficient system on the market for rolling out broadband connections in rural areas.

Stålhandske has no doubt there are huge profits and market shares to be gained by operators focusing on rural areas. "We see a lot of interest from emerging markets where you often have a large proportion of small communities with no broadband access. But the digital divide is big in all countries. In Sweden, for example, only 40 percent of the population has access to broadband," he says.

Offering rural broadband products brings Ericsson a step closer to its vision of providing broadband for all. Karl Thedéen, vice president for Product Area Wireline at Ericsson, says: "The fixed broadband market is very important and our aim is to provide end users with as much coverage as possible in rural areas."