5G for Remote Areas: Challenges, Opportunities and Business Modeling for Brazil

Abstract

Globalization, digitalization, and urbanization are progressing at a fast pace in cities and regions across the world. New technologies and innovations typically reach urban regions first, where Return on Investment (ROI) tends to be higher than in remote or rural areas, which are characterized by low population densities, low potential revenues, and large distances to urban clusters and societal service. This process has consistently increased the digital urban-rural gap. As an example, the Fifth Generation of Mobile Network (5G) has recently started to be rolled out, starting in the cities. Many challenges remain to bring broadband connectivity to the rural and remote regions. Particularly in Brazil, there is still a big digital gap between urban and rural areas. Urban areas have an internet penetration of around 65% while the rural figure is at just 34%. There are also important differences concerning the geographical location in the country. The North and Northeast regions of Brazil have lower internet penetration than the South, Southeast, and Center. In this paper, we present opportunities for connecting the unconnected in Brazil by defining a new alternative and scalable business model to deploy networks in ultra-low density areas. We present an analysis of show stoppers, rural opportunity sizing, business case, including deployment model for a 5G network, costs incurred, and generated revenues. A central element to bring scalability and sustainability into the business model for rural connectivity is the association between a Mobile Network Operator (MNO) and Rural Mobile Infrastructure Operator (RMIO), in which RMIOs run their network on a slice of a network that is connected to incumbent operators. Profit and Loss (P&L) analysis shows that a fair split of the value generated between the MNO and RMIO can be achieved.

Keywords

• 5G
• remote areas mobile network
• business model