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.
Mobile Carriers’ Walled Garden Under Siege 7 January 2009
Posted by Steve Blum in Tellus Venture Associates.Tags: cellular data, CES, Clearwire, consumer electronics show, mobile telephony, tethering, WalkingHotspot
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The Consumer Electronics Association identified four major trends that will drive the consumer electronics in 2009. Two depend on the wireless data industry to make it happen: mobile devices that provide the same user experience as in-home or in-office gizmos, and devices with embedded Internet capability. (The other two are evolving display and control technology and anything that’s green. Anything.)
In the long run, it’s good news for Clearwire. They see themselves as providing connectivity to the growing ecosystem of wireless-capable gadgets. Unfortunately, the CE guys aren’t thinking of Clearwire. They want to sell millions of units now. That means going with the lowest common denominator: a 3G, or even 2G, data modem. But it’s not such great news for the current mobile phone business model.
This little beauty ties a 3G modem (this one is running on the Verizon network) to a WiFi router. Lots of people can share one mobile data connection, all at the same time. Netgear thinks they're doing a favor for the mobile phone carriers. Oddly enough, they don't have relationships with any yet.
From the point of view of a mobile carrier, you plug your wireless data modem into one device, such as your laptop, and that’s it. If you want to use a second device at the same time, you get a second modem, pay for a second data subscription plan and away you go, playing happily inside the walled garden.
The CE industry isn’t thinking along those lines. The very concept of a walled garden is foreign to them: the last thing they want is to have to sell a separate data subscription for every device they sell. They treat the mobile market the same way they treat the fixed data market. You pay for a connection, run it to a router, then load up on the gizmos.
It’s early days yet at CES — the show floor doesn’t even open until tomorrow. But judging from the press conferences and product previews, consumer electronics manufacturers (at least the ones who aren’t already playing in the mobile phone sector) are moving full steam ahead on a couple of assumptions:
- Tethering to a mobile phone’s data connection is every consumer’s right.
- Mobile phone companies should thank (if not pay) them for building devices that allow multiple users with multiple gizmos to share a single mobile data connection.
So far, I haven’t spoken with any CE manufacturers who have a deal with a mobile carrier (again, except for the guys who are already selling phones and modems to carriers) . They plan to push the products into consumers’ hands, and let the market sort things out. We saw a preview of that approach at the CTIA show in San Francisco last year, when TapRoot Systems demonstrated WalkingHotSpot.
Mobile carriers control access to their walled gardens via technology and subscriber contracts. They’ve been able to control the technology so far, because they buy the devices from the manufacturers. But that control will break down as consumers buy their own products and ignore the contracts. Carriers might be faced with a choice: cripple or even eliminate generic data modem service, introduce some kind of packet filtering, or cede control of bandwidth usage to consumers.
Given the rough time that terrestrial ISPs have managing consumer bandwidth usage, I don’t expect mobile carriers to have much success filtering or metering usage. Third party technology providers will work hard to defeat any such efforts. Regulators always keep at least one eye on populist sentiment, and judges are none too enthusiastic about holding ordinary consumers to the impenetrable fine print of terms of service.
Easy, widespread mobile data access is a golden ray of hope in an otherwise dismal outlook for the coming year. It’s an opportunity for CE manufacturers to sell consumers a new version of a gizmo (any gizmo!) they’re already buying, using and loving, by making it mobile. Any manufacturer who is outside the walled garden right now will do whatever it can to break down the walls.
Carriers will fight it. But they’re facing powerful forces: CE manufacturers, content providers (who love the trend), consumers and, likely, regulators.
As Damon Runyon wrote: “the race isn’t always to the swift, nor the battle to the strong, but that’s the way to bet.”
