Telecom Deficit Slows Angola’s Development 21 July 2009
Posted by Steve Blum in Microfinance & Development, Tellus Venture Associates.Tags: angola, development, gates foundation, huambo, microfinance, microwave, mobile telephony, movicel, ngo, rotary, silicon valley telecommunications council, telecom, unitel, world vision
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Steve Blum, Tellus Venture
Associates, doing project
due diligence in HuamboTelecommunications and transportation make the difference between subsistence farming and sustainable commercial agriculture in Angola’s Huambo province, where Tellus Venture Associates is supporting a development project through Rotary International. The physical infrastructure was obliterated during nearly 30 years of civil war, but mobile phone applications could soon provide a life-saving solution.
Potatoes sold in Huambo might earn $175 per ton, but could fetch $500 or more per ton in coastal markets, hundreds of kilometers away. Using fertilizer and improved seed varieties, a smallholder farmer might produce 2.5 tons per crop. But that seed and fertilizer costs about $375, which means selling it locally will net little more than $60, while selling it on the coast nets $875. With two crops a years, that’s the difference between trying, often failing, to survive on pennies day, and earning enough to buy a family basic necessities, including a level of education for the children.
Destroyed military equipment
litters the countrysideIt’s possible to stagger production within and among villages so that some produce can be sold on an annual contract basis. But agriculture is still largely a seasonal business, which makes up to date market information absolutely vital. The Gates Foundation and World Vision are working on filling that gap in Huambo. Lack of telecommunications infrastructure makes it very difficult, though.
The skeletal remains of utility transmission poles and towers are scattered throughout the province. Communications facilities were fought over and heavily mined during the war, and even today Huambo has one of the highest concentrations of landmines and active minefields on the planet.
Trunking within
and out of
Huambo is
based on
point to point
microwaveChinese, Brazilian and Portuguese companies are rebuilding roads and rail lines, and in a couple of places underground fiber optic lines are reportedly going in at the same time. Angola Telecom, the government-owned PTT, provides landlines and phone service. Private carriers are beginning to appear, but it’s hard to tell if claims of progress are supported by facts on the ground. It’s possible to get a POTS line in some towns — after a long wait or a quick, under the table payment — but reliability is low. The bulk of day to day communication in Angola generally, and Huambo province in particular, is wireless.
There are two privately-owned mobile carriers, Movicel (CDMA) and Unitel (GSM). Coverage for both is relatively good in the capital of Luanda, although both regularly experience outages and have significant gaps. As a result, it’s common in urban areas for people to subscribe to both and carry two mobile phones.
In rural Huambo, where the agricultural development project is continuing, mobile network coverage is spotty. But spotty beats nothing at all. The next step in the project is to set up a commodity price reporting service from coastal markets, via SMS and MMS.
Luanda, the capital,
has the consumers,
Huambo has the produceThe Gates Foundation is funding market development programs, which establish contractual relationships with coastal supermarkets, restaurants and other wholesale buyers. Mobile phones could provide the essential link between those markets and smallholders in Huambo.
Longer term the hope is to extend Internet access into villages, to enable ongoing education and technical assistance from agricultural and marketing experts, in addition to current market data. Right now, the focus is on finding a sustainable way of paying for VSAT terminals, but a terrestrial solution – WiMAX, say – is likelier to succeed. Given the ample high ground around the agricultural valley, a handful of base stations, maybe as few as one or two, could service all the current project areas. Backhaul could be terrestrial or satellite-based, although much of the project-related traffic would be local and could be handled through what would be, in effect, a WAN.
Operating expenses have to be tighly controlled. Even taking full advantage of coastal market opportunities, cash flow will be at low levels relative to the cost of international VSAT service. The cost of bandwidth has to be proportional to the actual value added by any given application, which favors keeping as much traffic as possible on a local network.
Handicapping the BTOP Derby and the BIP Stakes 12 July 2009
Posted by Steve Blum in Tellus Venture Associates.Tags: ARRA, BIP, broadband stimulus, BTOP, california emerging technology fund, california public utilities commission, cetf, CPUC, NTIA, RUS
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The California Public Utilities Commission (CPUC) put on a great show in San Francisco on Friday. Hosted by Commissioner Rachelle Chong, and featuring State of California CIO Teri Takai, Susan Walters from the California Emerging Technology Fund (CETF), and several very well prepared staffers, the workshop covered the essential details you need to know in order to apply for NTIA’s BTOP (Broadband Technology Opportunities Program) grants or RUS’s BIP (Broadband Initiatives Program) money, and to have a hope of getting matching funds from either CPUC via the California Advanced Services Fund (CASF) or CETF.
The presentations and audience questions shed some light – sometimes intentionally, sometimes not – on what’s going on behind the scenes as the mad scramble to file applications by the 14 August 2009 deadline continues. The presentations, handouts and other items of interest are posted on my website.
Here’s how I see it…
BIP Loans and Grants
The Rural Utilities Service is out in front by furlong, before they’ve even hit the first turn. RUS has more than 70 years of experience milking Washington on behalf of its clients and it shows. It’s going nearly all in on this round, offering $2.4 billion now and leaving only $300 million for future rounds. That way, the rural carriers it supports can come back for NTIA money in the second and third rounds. And its written its rules to favor the good old boys. Existing recipients of RUS pork get explicit priority for funding, and the grantmaking criteria – which look impenetrable to the uninitiated – are as familiar as a dead armadillo to those in the know.
BTOP Broadband Infrastructure Grants
If you’re a regional telephone company, you live and breath the detailed documentation required to submit an application. Broadband availability and subscribership levels down to the census block level? No problem, we have a junior analyst keeping our database warm just in case someone asks. Plans certified by a professional engineer? Financials done to GAAP standards? Long list of people we won’t fire, I’m sorry, of jobs created or preserved? No worries, it’s already posted on our web site. And so it goes.
For well prepared community broadband proposals – projects that are well along the pipeline – there’s a glimmer of hope. Everyone else, get in line and expect to stay there, even if you’ve kept your project under the $1 million threshold because you thought it meant an easier ride. $1.2 billion is on the table this round. Here’s how I see the applications shaking out:
- Rock solid proposals, written almost as if they knew in advance what the questions would be: 500 to 1,000, mostly incumbent telcos and big MSOs (okay, in innovative coalitions and public/private partnerships with blah blah blah).
- Arguably complete applications that might or might not withstand several rounds of reviews, including a 30 day challenge period when the telcos can rip them to shreds: maybe 2,000 applications, covering a mixed bag of CLECs, cable companies, cities, middle mile providers and eternally optimistic entrepreneurs.
- Hail Mary requests for $999,000 written by the summer intern: 5,000 requests from middle managers who want the boss to think they did it by working through lunch hour. Caveat: this estimate is subject to revision. There might not be 5,000 middle managers still employed in America.
Infrastructure projects funded: 100 to 150, mostly to the big telcos, with some small fry included to make it look like the fix wasn’t in.
BTOP Public Computer Center Grants
Every school, community college, local government, Boys and Girls Club and Elks Lodge with a grant writer will apply for this one. Expect 10,000 or more applications for the $50 million available, with maybe 500 awarded. The bulk of the money will go towards program costs, not hardware, which means something like 1,000 jobs funded for a year or less.
BTOP Sustainable Broadband Adoption Grants
Huh? Oh, you mean you didn’t know we’re giving priority to projects that are allied with larger ARRA-funded stimulations? Sorry about that, but if you’ve scored a big health services or education grant, be sure to stop by the BTOP desk on the way out to pick up a few million for a telemedicine or distance learning add-on, after all we have $150 million that’s shovel ready this round. Everyone else, well, thanks for sending in those 20,000 applications, and we apologize for not explaining what sustainable broadband adoption means. We figured it would be really funny to just let everyone guess.
Don’t forget to reapply in round 2!
Tellus Venture Associates does hands-on development work in Angola 7 July 2009
Posted by Steve Blum in Microfinance & Development, Tellus Venture Associates.Tags: angola, development, european union, gates foundation, huambo, infrastructure, microfinance, ngo, rotary, world vision
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Tellus Venture Associates is supporting a comprehensive development effort in Angola’s Huambo province. The project combines agricultural and marketing education, infrastructure building, seed (literally) capital, market development and microfinance. I became involved a couple of years ago when I helped my Rotary district raise $250,000 for the project, amounting to 25% of the first phase. The remaining 75% is from World Vision, a development and relief-focused NGO, and the Angolan government.
Manuel de Sousa, president of the Rotary Club of Luanda (left), and Steve Blum (right) at the EU/World Vision agricultural training center in Huambo province
Building a potato seed warehouse at EU and World Vision training facility
In June 2009 I traveled to Huambo, with several fellow Rotarians, for due diligence on the current project as well as future needs assessment. The trip began for me in Cape Town, South Afica, where I met with District 9350’s leadership. Worldwide, Rotary is organized into about 500 districts, and the one that covers Angola is headquartered in Cape Town.
From there I went to Luanda, Angola’s capital, to meet with the project managers and join the rest of the Rotary team. World Vision, a Seattle-based NGO, has overall management responsibility for the Huambo project, collaborating with Rotary as well as the European Union, the Gates Foundation, the Rockefeller Foundation, the Angolan government and others.
Once everyone was in country, we flew to Huambo, located about 600 kilometers from Luanda, in the central highlands of Angola. It was ground zero for a 27 year civil war, that began in 1975 when the Portugese government abandoned its Angolan colony.
Party flag still slies over bombed-out UNITA headquarters in Huambo
The fighting was primarily between the U.S.-supported UNITA, based in Huambo, and the Soviet-backed MPLA, which counted Luanda as a stronghold and eventually achieved international recognition as the national government.
South African and Cuban troops supported the respective sides, as fighting swept back and forth across the province. The town of Huambo, Angola’s second largest city, changed hands several times and suffered heavy damage. In 2002, the last remnants of UNITA were defeated. The province is still inundated with landmines, despite years of de-mining operations by international organizations.
NGOs, such as World Vision and Rotary, the Angolan government and the international community are cooperating to rebuild Huambo, and develop a sustainable economy that can support the 3 or 4 million people who live in and around the province.
Planting Rotary-provided seed, a woman works with her baby on her back, a common sight in Huambo
Rotary’s $250,000 bought seed and fertilizer for 25 agricultural associations. These associations are based in villages that have access to a year-round source of water for gravity-fed irrigation, and have suitable soil and climate conditions for potato cultivation. Potatoes are transportable and can fetch up to $500 per ton in coastal market towns, making it an ideal cash crop for Angola.
Each association received extensive agricultural training, sponsored by the EU and World Vision, and planted test plots to determine the best potato variety to use and the optimum level of fertilizer application.
Off main roads, rough dirt tracks and makeshift bridges link farms to markets in Huambo province
The Gates Foundation and others are funding market development programs for the village associations. Lack of transporation makes it difficult to reliably serve coastal markets. Roads and rail lines were devastated by the civil war, and the extensive mine fields make rebuilding a slow and careful process. Even so, the road to Luanda is nearly all re-paved and a rail line to the coast is scheduled to open in 2010.
Much of the civil infrastructure is being rebuilt by the Chinese government, and Brazilian and Portuguese companies are also very much in evidence.
Angola is not a destitute country. It is one of the major oil producers in Africa, sometimes ranking as the top producer. But severe structural inefficiencies and trade barriers created by the formerly Marxist government, combined with what is reported to be (and, to the extent of my experience, appears to be) endemic corruption means relatively little money benefits ordinary Angolans.
Reviewing results from fertilizer application testing in Quinze
We reviewed the tender documents for the seed and fertilizer, verified it was in warehouses with proper inventory control procedures, and saw the beginning of planting by one of the associations. We also met with association leaders and government officials, visited the marketing, training and test plot programs, and saw a microfinance program in action.
I took the overland route back to Luanda, traveling nine hours in a Land Cruiser. Most of the road had been repaved since the war, but some sections, particularly river crossings, are still under construction.
Kwanza River is Luanda's lifeline
Once we left Huambo, the countryside was mostly undeveloped and sparsely settled, if not completely uninhabited. One reason was readily apparent: I saw minefield warnings and the remains of destroyed armored personnel carriers and light tanks most of the way.
Only when we crossed the Kwanza River and approached Luanda did we see large towns and extensive development.
Our local Rotary team, from the Monterey and Fresno areas, will meet soon to plan next steps. At this point, we hope to raise another $250,000 that can once again be leveraged up into a million dollar project in Huambo.
