Africa - Operators selling excess electricity in rural areas to supplement revenues

[idg] The falling pace of rural electrification projects and the desire of mobile network operators to raise average revenue per user have pushed the GSM Association to partner with Lighting Africa to sell excess power to communities.

The falling pace of rural electrification projects and the desire of mobile network operators to raise average revenue per user have pushed the GSM Association to partner with Lighting Africa to sell excess power to communities.

Lack of electricity has forced mobile operators and tower-sharing companies to generate alternative power from diesel generators, solar and wind, and so they usually have up to 5 kilowatts of excess power. The Community Power from Mobile (CPM) initiative pulls resources from the GSMA Development Fund and Lighting Africa, a joint World Bank, IFC program.

"While the rest of the world is enjoying increased electrification levels, Africa's non-electrified population is growing steadily, projected to reach 700 million by 2030. The situation is particularly acute among the rural poor, who account for 88 percent of those without electricity," said Arthur Itotia Njagi, Lighting Africa's program manager. "Partnering with the mobile-phone operators promises to develop new business models and delivery models for modern off-grid lighting and related energy services."

Operators such as MTN and Safaricom have been permitting base stations to charge devices such as mobile handsets, lanterns and household batteries, mainly to curb theft. The new initiative is the first time excess power will be used for businesses, clinics, vaccination refrigerators, schools and homes.

"The mobile industry is experiencing unprecedented infrastructure growth in off-grid regions in the developing world, where nearly 1.6 billion people live without access to the electricity grid, and we estimate that 485 million of those have access to mobile-phone services," said Chris Locke, managing director, GSMA Development Fund. "As base stations are typically the only powered infrastructure within walking distance of the community, the Community Power from Mobile initiative can simultaneously improve the business case for off-grid telecoms and have significant societal impact."

According to a 2009 report by GSMA titled "Community Power -- Using Mobile to Extend the Grid," operators will deploy 640,000 off-grid base stations by 2012 across the developing world in close proximity to off-grid populations. By mid-2012, the partners expect CPM will have developed commercially viable business models and assisted 10 mobile network operators to expand their rollouts across the developing world.

"Availability of off-grid handset charging has been demonstrated to raise average revenue per user by 10 to 14 percent, equivalent to an additional revenue opportunity of $2.3 billion if the 485 million off-grid subscribers had access to handset charging," added Locke.

The project is expected to lower cases of theft and increase security, but the idea of increasing ARPU is also likely to attract more operators.

GSMA, Lighting Africa to sell excess power in rural areas