6Speeding Up Rwandan Development
A business proposal focused on enacting the United Nation’s Sustainable Development Goals in emerging markets.
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Recent headlines on the information and communications technology (ICT) sector have heralded the arrival of 5G cellular networks in the United States; 5G networks, leveraging quicker download speeds and reduced latency, promise to catapult the widespread implementation of virtual reality, artificial intelligence, and the Internet of Things. As the United States and other technologically-advanced countries surge toward revolutionary network speeds, countless less-developed countries (LDC) are left in the dust – no region highlights a stark contrast in global network speeds better than sub-Saharan Africa. The most recent industry report published by GSMA Mobile Intelligence projected that the American industry-standard 4G network only contributed to 7% of mobile connections in sub-Saharan Africa in 2019. Even 3G, the next step down from 4G, won’t account for the majority of the region’s mobile connections until 2025. The absence of modern cellular networks in sub-Saharan Africa is not due to a lack of commercial or governmental interest; rather, fundamental technological limitations impede progress. One of Africa’s largest telecommunications providers, Liquid Telecom, has unveiled several broadband projects in Rwanda aimed at scaling household connectivity, distancing themselves from mobile network investments. The indispensable mobile network infrastructure in Rwanda demands innovation to address the lagging adoption of 4G technology in sub-Saharan Africa. Through its massive efficiency, Massachusetts-based ICT startup Altaeros’s proprietary SuperTower solution streamlines the introduction of new mobile network coverage areas; a partnership between Liquid Telecom and Altaeros would enable the extensive rollout of 4G networks across Rwanda, directly combatting the market inefficiencies prevalent in the nation’s telecom sector and kickstarting bottom of the pyramid (BOP) economic activity that would, in turn, address multiple Sustainable Development Goals.
Creating Shared Value
In the last half century, economic models have uncovered the importance of generating “shared value” by adopting “policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates.” The increasing emphasis being placed on multinational corporations (MNC) to address social malaises has brought the stakeholder model traction in the last decade. The stakeholder model of corporate social responsibility replaces Milton Friedman’s shareholder model: stakeholder theory identifies the symbiotic network that exists between a company and all of the parties it affects, rather than just shareholders. In practice, companies that prioritize creating economic and social value for their stakeholders receive increased return-on-investment. The stakeholder model accompanies the BOP model of economic development; BOP refers to the poorest two-thirds of the global economic pyramid as a major economic opportunity for MNC, hoping to draw in business activity and lessen poverty. The ICT-specific opportunities that lay in BOP revolve around finding innovations that address network coverage – not poverty. The main reason telecom companies have strayed away from extensive projects in sub-Saharan Africa is the low population densities that reduce the market penetration gained per investment. The genesis of higher quality of lives in Rwanda directly correspond to the synergies that exist between the stakeholder model and BOP.
Room for Improvement
Rwanda, landlocked by the Democratic Republic of Congo, Uganda, and Tanzania, has been recovering from the infamous 1994 genocide of the ethnic Tutsis. The Rwandan Genocide claimed 800,000 lives and wreaked havoc on the nation’s social fabric and economy. Since then, the nation has seen explosive growth in the last two decades, averaging a 7.9% GDP growth rate – despite the economic expansion, many social issues remain unaddressed. Among the United Nations’s Sustainable Development Goals, the Rwandan government has targeted Goals 4, 8, 10, 13, 16, and 17: Quality Education; Decent Work and Economic Growth; Reduced Inequalities; Climate Action; Peace, Justice, and Strong Institutions; and Partnership for the Goals, respectively. While governmental actions will undoubtedly make headway towards the six SDGs, the private ICT sector presents another contributor to development. Empirical studies have corroborated anecdotal evidence of the positive correlation between mobile network penetration and economic and social growth in LDCs; in 2003, Manobi SA provided Sénégalese fishermen with internet-enabled mobile phones, granting them access to weather reports, market price data, and fleet locations, improving their professional success and overall quality of life. As smartphones emerge with affordable price points, the number of smartphone connections in sub-Saharan Africa is projected to double by 2025. The rapidly broadening smartphone userbase makes bringing 4G network coverage to Rwanda especially appealing for mobile network operators (MNO); Rwanda boasts the third-best Network Readiness Index (NRI) score in Africa, making the country a compelling BOP opportunity for ICT companies. NRI, understanding how ICT can assist in achieving SDGs, aggregates the impact ICT investment would make on three main stakeholder groups: individuals/societies, businesses, and governments. Rwanda’s NRI score highlights the significant influence expanded network access will have on all citizens, be it through e-commerce, security, or communication.
Rwanda’s Telecom Landscape
Rwanda’s telecom infrastructure has historically been heavily dependent on landline connections. While many of Rwanda’s African neighbors’ coastal locations allow them to receive connectivity directly via submarine fiber-optic cables, the landlocked country has limited access through negotiated contracts with neighboring countries that have submarine fiber-optic cable access. Geopolitical tensions in the region present challenges to the fulfillment of Rwanda’s contracts; combined with submarine fiber-optic cable’s inherent capacity constraints and the threat of cable cuts, Rwanda’s reliance on fixed-line connections could be disastrous. Outside of fiber-optic connections, Rwanda lacks essential infrastructure for 4G networks. However, increased direct and foreign investment in the region, alongside technological advancements have led to palpable progress in several sub-Saharan countries. Foreign and private investment, buttressed by liberal government spending, has led to new projects, but completion dates are distant and variable. Additionally, sub-Saharan Africa’s lack of electricity access hinders a “mesh” network consisting of linked hotspots. The low average income in Rwanda remains another limitation – MNOs are forced to shrink costs to remain profitable while charging low rates.
Transatlantic Collaboration
Liquid Telecom, international ICT juggernaut Econet Global’s sub-Saharan subsidiary, has its current service in Rwanda focused on fiber-optic expansion, rather than 4G. Chief executive Sam Nkusi explained that, due to the substantial costs of employing 4G equipment, fiber-optic remains the most affordable network. Rwandan MNOs that do provide 4G have seen unimpressive penetration, attributed to the limited coverage area and pricing. Given Liquid Telecom’s robust presence in Africa, they have the existing operational knowledge to successfully push 4G with the right resources; this wouldn’t be an entirely new venture for them, either, having already established 4G services in South Africa and Zambia. Liquid Telecom’s large buying power and economies of scale would only be a plus in such an endeavor. A successful launch of 4G in Rwanda by Liquid Telecom would drive their residential and business-to-business (B2B) sales as the network speeds 4G bring make a stronger argument for purchasing network access. Altaeros’s flagship product directly clears the logistical roadblocks for Liquid Telecom’s 4G network development in Rwanda.
SuperTower, SuperImpact
Unveiled in 2015, the SuperTower is an autonomous aerostat tethered to a rotating ground station. The aerostat, controlled by algorithms and a remote crew, if necessary, deploys radios and antennas over 800 feet above the ground; the high operating altitude allows the SuperTower to service the same area as 15 cell towers – for roughly a third of the cost. Sub-Saharan Africa’s geopolitical instability has additionally dissuaded private companies from undertaking large-scale infrastructure projects, like constructing cell towers. The SuperTower makes establishing a new network a streamlined process: MNOs simply have to input their desired bandwidths in the aerostat’s hardware-agnostic platform. The plug-and-play platform reduces the time between inception and operation from years to days. Not only does the aerostat’s mobile design enable relocation in case of regional threats, it allows MNOs to seamlessly modify their network area. With its marginal physical footprint, the aerostat effectively eliminates the need for detailed site selection, exponentially increasing where networks can function. The SuperTower’s tiny footprint extends to its carbon impact: the power supply required is a fraction of the energy to erect and power 15 cell towers. By using an autonomous model, the maintenance costs of both human and fiscal capital associated with cell towers are erased. The reduced costs make rural telecom expansion a profitable BOP growth opportunity for Liquid Telecom instead of the traditional loss-making venture.
Domino Effect
A partnership between Liquid Telecom and Altaeros would provide several micro and macro benefits to stakeholders. The SuperTower’s efficiency creates a novel market opportunity for Liquid Telecom that traditional ICT could not; expanding the 4G network in Rwanda at a low cost would have an immediate impact on the ballooning smartphone user demographic. 4G speeds unlock countless prospects in all sectors of the Rwandan economy, simultaneously working towards the country’s SDGs.
Quality Education
Rwanda’s National Strategy for Transformation (NST 1), released in 2017, extended the scope of the education system and pushed for further-reaching education programs. Increased cellular network speeds make online education possible and elevates the quality of education nationwide. 4G facilitates the integration of immersive interaction education, making curriculum more engaging.
Decent Work and Economic Growth
Despite the nation’s convincing e-commerce readiness grade compared to similar countries, in 2017, only 1% of the total Rwandan population participated in e-commerce. Introducing network connectivity to underserved locales catalyzes online and offline economic activity, in turn driving commercial growth. E-commerce creates new jobs in transportation, technology, and trade; person-to-person (P2P) commerce rises the demand for clerical and managerial positions. An accessible 4G network would persuade MNCs to enter the Rwandan marketplace as corporations have a new medium for conducting business.
Reduced Inequalities
Rwanda’s class disparities remain one of its most pressing issues. The vast majority of Rwandans work in agriculture and the lack of marketplaces for trade hinder the potential for significant economic growth as most transactions occur locally. The consumer banking vacuum would also be mitigated as mobile networks open the possibility for microfinancing and loans for the population. The culmination of economic activity results in social activity; providing local farmers with more network-based resources will create wealth for the lower class, helping them join the middle class.
Climate Action
Countries that developed at unprecedented rates (i.e. India, China) did so with significant environmental costs. The SuperTower has a drastically lower carbon footprint in the long run. The speeds provided by 4G technology also allows for real-time traffic/infrastructure monitoring and control, reducing external costs commonly associated with urban development.
Peace, Justice, and Strong Institutions
The notion that knowledge liberates makes 4G ever-more important. Faster network speeds proliferate information more effectively, presenting users with more local and global awareness. “E-governments” are a new initiative promoted by the United Nations in recent years for countries that lack the infrastructure to execute administrative duties. Creating an e- government in Rwanda would reinforce the organizational capabilities of the government in areas where they lack a physical presence.
Conclusion
Liquid Telecom has the potential to yield complementary economic and social benefits in Rwanda with a move into the 4G distribution. The company’s strong regional presence provides substantial advantages: Liquid Telecom’s existing business operations lower costs and their connections with administrative groups limit regulatory complications. Altaeros’s SuperTower is the missing link for 4G in Rwanda; the aerostat’s low cost and high output tackles the primary problem that traditional cell towers pose. Through a partnership with Altaeros, Liquid Telecom will be able to deliver life-changing network speeds at a discount of the usual cost. The 4G service will have a direct, positive effect on both Liquid Telecom and Altaeros’s profits while enhancing the lives of all Rwandans; Liquid Telecom’s stakeholders at both the bottom and top of the pyramid reap profits. Accomplished properly, news headlines will chronicle the radical skyrocketing of Rwanda’s network speeds – and quality of lives.
(Works Cited)
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SDG Business Proposal / 2020
Written for Professor Jessy Hsieh, Business and Society