Solar-Powered Off-Grid Charging Solutions Gain Traction

Rural areas in Africa remain underserved with telecoms services for a number of reasons , including poor social infrastructure such as unreliable power supply and, in some case, complete lack of access to grid electricity. However, with increasing competition and market saturation in most urban areas, network operators across the region are implementing solutions to facilitate their expansion into rural areas as part of their overall growth strategy. One solution that seems to be gaining traction among operators is off-grid, renewable energy systems. BMI believes this solution offers a lifeline to rural phone users in the short - to - medium term, despite the potentially adverse factors that could restrict its uptake.

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Around 70% of the entire Sub-Saharan Africa population live in rural areas and most of them are not connected by grid electricity or telecoms services. We believe the implementation of cost-effective network solutions and adoption of off-grid charging solutions could have a significant impact of subscriber growth in the future.

Off-grid power solutions adopted by operators are mostly solar-powered and can be used to power multiple household electrical items, including light bulbs and radios, in addition to charging mobile phones. Although specifically targeted at rural dwellers, they could also be used as back-up energy solutions for urban dwellers with unreliable power supply.

Zimbabwe's Econet Wireless was the first major operator to introduce an off-grid solar-powered energy solution. The company, through its wholly owned subsidiary Econet Solar, launched portable home power stations and solar lanterns in December 2011. In January 2013, the operator claimed that around 400,000 homes across the country, equivalent to a third of the estimated number of households in the country, own a solar lantern. Econet is also deploying the product in Lesotho and Burundi. For its part, South Africa's MTN launched its solar energy off-grid solution, dubbed Comeka ReadySet, in Rwanda, also in January, as part of its rural expansion strategy. MTN operates in multiple countries across Africa and is expected to introduce the solution to other markets.

BMI notes that various off-grid power solutions have been available for some time from independent vendors. However, it is remarkable that leading network operators are now driving its use by associating their brands with it. While we do not expect every operator in the region to adopt that strategy, the effort of leading players, such as Econet and MTN, is expected to have a positive effect on phone usage in areas where the solution is available. BMI will closely monitor the impact of this development, and other rural expansion strategies, on subscriptions growth in the future considering the likely impact on our growth forecast.

The biggest downside risks to the uptake of off-grid power systems are the cost and likely concerns about durability. Current prices range from as low as US$35 for basic solar lanterns with a single charging point to several hundred dollars for more complicated systems. MTN's Comeka ReadySet costs RWF115,000 (US$183), which is out of the reach of most rural dwellers in the country. However, the operator is positioning the product as a potential avenue for local enterprises to generate additional revenues by running phone-charging services with the system.

This article is tagged to:
Sector: Telecommunications
Geography: Africa, Burundi, Rwanda, Zimbabwe

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