From Rural Village to Global Village

Professor Heather E. Hudson

Director

Telecommunications Management and Policy Program

University of San Francisco

“L’information est la clé de toutes les portes…”

(Information is the key to all doors) …woman using a telecenter in Timbuktu, Mali

Information: Key to Development

“Information is the fuel of medicine. Here we have none. Year by year we are falling behind.”

Physician in Timbuktu

“We have a saying: When the telephone rings, business is coming.”

Rural co-operative manager in China

“We need information – masses of it. Without it, our culture will die.”

Inuit leader, Nunavut

The Information Connection:

Benefits of ICTs (information and communication technologies):• Efficiency:

Saving time and money• Effectiveness

Improving quality of services• Equity

Urban and rural; rich and poor; minorities; disabled• Reach

New markets, new audiences, new sources of supplies

ICTs: Necessary but Not Sufficient

Context: Social, economic, cultural• Need other infrastructure: transportation, power

supply, etc. for many applications• Role of women, elders, youth• Other geographic, economic constraints

“If I learn to use a computer, will I be able to find a job?”

Content• Relevance• Local languages

Capacity• Skills to use and manage information facilities• “Infomediaries: the information broker

e.g. Uganda, Ecuador

Good News: Growth of Mobile Access

0

10

20

30

40

50

60

70

80

90

CellSubscribers/100

Cell Subs/AllSubs

Cell Subs CAGR% 1997-2002

Low Income

Lower Middle Income

Upper Middle Income

High Income

Africa: Cellular Subscribers/All Subscribers

0

20

40

60

80

100

120P

erc

en

t

D.R. CongoCongoGabonMauritaniaUgandaCameroonNamibiaRwandaTanzaniaKenyaEquat GuineaGuineaTogoLesothoCote d'IvoireMozambiqueChadSierra LeoneMadagascarGambiaSenegalBurundiNigeriaSeychellesSwazilandGhanaZambiaBeninAngolaBurkina FasoCentral Af RepZimbabweMalawiSouth AfricaMaliNigerCape VerdeEgyptTunisiaS Tome & PrincipeSudanEthiopia

Mobile Sector Structure:Low and Lower Middle Income

Countries

79 countries

15 countries

Mobile Monopoly

Mobile Competition

Mobile subs vs.GDP per capita:Mobile sector structure:Competitive Monopoly

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

0 10 20 30 40 50 60

mobile subs/100

GDP/c

ap US

$

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

0 5 10 15 20 25

Mobile subs/100

Lessons from the Wireless Explosion Competition is key

• Lower prices• Innovative strategies: e.g. prepaid, microloans, special services

Demand may be much greater than assumed• Farther down the economic pyramid

Old Distinctions no longer Relevant • Fixed vs. mobile:

Cellphones as first and only phones Portable public phones: e.g. Bangladesh, Philippines, Uganda Wireless public phones: e.g. South Africa, Uganda

• What is E-mail? SMS (short message service): Poor person’s (everyone’s?) e-mail?

• Voice vs. data What is voice?

• (Some countries still have monopolies on fixed “voice”) Bits are bits

• VoIP Telephony

Prepaid Mobile Phone Service in Uganda...

Solar Powered Wireless Access: Rural South Africa ...

Bad News: Internet Access

0

10

20

30

40

50

60

70

MainLines/100

PCs/100 InternetUsers/100

Low Income

Lower MiddleIncomeUpper MiddleIncomeHigh Income

World

Price of Internet Access

Internet Price for 20 Hours as % of GNI per Capita

0

50

100

150

200

250

300

Country Classification

Perc

entag

e

Low Income

Lower Middle Income

Upper Middle Income

High Income

Internet Price per Month (est. 20 hours)

57.3

28.9 29.6

23.3

0

10

20

30

40

50

60

70

Country Classification

US$

Low IncomeLower Middle IncomeUpper Middle IncomeHigh Income

Investment Indicators

0

20

40

60

80

100

120

140

Telecom Investmentper Inhab.

Telecom Investmentper Sub.

Country Classification

$US

Low Income

Lower Middle Income

Upper Middle Income

High Income

Fixed Networks:Need New Business Models

Less international revenue• Perceived as “cash cow”

Lower settlements• Revenue exceeding costs may be used to

expand/upgrade infrastructure Competition from wireless• More wireless than wireline subscribers in many

developing countries Competition from VoIP

Increasing Internet Access:Eliminating Bottlenecks

Community access models Payphones (PCOs), telecenters

Resale Phone shops, cyber cafes

Legalizing Bypass• VSAT networks direct to end users

Businesses, schools, telecenters, etc.• Wireless for local access

E.g. WiFi (802.11) for local access• “hot spots” to cover villages, neighborhoods

Other WLL options• IP Telephony

Inexpensive voice-over-data networks Reducing local barriers

• Customs duties• Local fees and taxes

Resale: Phone Shops in Senegal

Community Telecenters in South Africa and Mozambique ...

CheapInternationalBandwidth:

Major Submarine Cable Systems -

South Asia Source: TeleGeography

International Connectivity:

STM-1 Price Trends

Notes: 1)Prices are median monthly lease excluding installation fees;

2) STM-1= 51.8 Mbps / 672 voice circuitsSource: Telegeography

Case Study: Internet Access and Price: Caribbean

CSME: Caricom Single Market and Economy • Currently 13 members• Total population about 6 million

Main pillars of CSME:Free movement of capitalFree movement of goods, services and people

within the CSMEEstablishment of common trade and economic

policyHarmonization of economic, fiscal and monetary

policiesCommon currency

Opportunity to develop information sector

International Internet Bandwidth: Caribbean vs. Trading Partners and Competitors

0

1000

2000

3000

4000

5000

6000

Int'l Internet bandwidth per 100inhab.

Antigua & Barbuda

Barbados

Dominica

Grenada

Guyana

Jamaica

St. Kitts & Nevis

St. Lucia

St. Vincent & Grenadines

Suriname

Trinidad & Tobago

S. Korea

Hong Kong

Taiwan

Canada

US

UK

Singapore

Internet Access Price as Percentage of GNI per capita

0

5

10

15

20

25

30

CSME

Antigua & Barbuda

Barbados

Dominica

Grenada

Guyana

Jamaica

St. Kitts and Nevis

St. Lucia

St. Vincent/Grenadines

Suriname

Trinidad & Tobago

South Korea

Hong Kong

Taiwan

Canada

U.S.

UK

Singapore

Internet Users per 100 Population

0

10

20

30

40

50

60Antigua & Barbuda

Barbados

Belize

Dominica

Grenada

Guyana

Jamaica

St. Kitts & Nevis

St. Lucia

St. Vincent/Grenadines

Suriname

Trinidad & Tobago

South Korea

Hong Kong

Taiwan

Canada

U.S.

U.K.

Singapore

Case Study: Incentive-Based Subsidies: The U.S. E-Rate Program ...

Discounted Internet access for schools, libraries, rural health facilities

About $2.25 billion available per year• Collected from carriers: surcharge on phone bill

Service may be provided by any telecom provider, • including satellite, wireless as well as local telco

Opportunity for competitive bids Subsidies to end user (school/library) rather than directly to

carrier Suppliers bid to provide service on website Result should be:

• Better pricing than through direct subsidies• New entrants to provide services

Other models typically subsidize carrier directly or require carrier to provide discounted service as term of license

Universal Access in Alaska: The Alaskan Context

Conditions similar to other isolated and developing regions:• Lowest population density in U.S.

only 4 communities over 10,000• Isolated villages and small towns

More than 200 villages Many villages accessible only by boat or bush

plane• About 16 percent of population is native American• Shortage of professionals

teachers, physicians Distance from specialized expertise

• medical specialists• teachers of specialized and advanced subjects

From “Bush Telegraph” to the Internet

Early days: communication by HF radio BUT for more than 20 years, Alaskan villages have had

reliable communications by satellite 95 % of households have telephones Today Alaska remains a Pioneer:• First among 50 states for Online Population• First for Technology in Schools• Highest percentage of school districts in the U.S.

with Internet access• Third in Digital Government Services

Alaska: Rural Access to the Internet

Internet access for schools: Using the E-Rate• Infrastructure already in place: satellite links• Most qualify for 90% discount

Some telcos have helped schools apply for e-rate win-win for schools and phone companies

New markets• Schools and libraries can serve as “anchor tenants” to attract service

providers• New services: education portal: Schoolaccess.net; secure medical

network: ConnectMD Wireless Internet access for villages

• WiFi etc. may be used to extend community access to the Internet (e.g. from schools or libraries)

• Wireless now installed in > 150 villages• May be model for other developing regions

Alaskan children access the Internet in village schools.

Telemedicine in Alaska Today:The AFHCAN Project

Alaska Federal Health Care Access Network (AFHCAN)• Telemedicine for all federally funded health care

facilities in Alaska• 235 sites; 37 member organizations

Village clinics Public Health clinics Regional hospitals Military installations, Coast Guard, Veterans

Administration• Covers more than 212,000 beneficiaries

About 40% of Alaska population Majority are in Alaska native villages

Kotzebue, Alaska: Inupiat village on the Bering Sea...

Telemedicine facilities for consultation between Alaskan regional hospital

and village clinics...

AFHCAN Telemedicine Facilities and Users

Conclusions: Strategies to Increase Investment

Public/private partnerships: • E.g. government to use commercial (public) networks, not

build own networks Government as anchor tenant May drive demand for new services

Economic Development• Strategies to encourage investment in target regions,

services Eliminate restrictions on competitive services: e.g.

satellite, VOIP Use targeted subsidies to encourage investment in

broadband for anchor tenants such as schools, businesses, NGOs, etc.

Increasing Access: Planning Strategies(Lessons for SF Wireless Initiative??)

Separate the goals from the means• e.g. access goals, not technology solutions• E.g. don’t focus on wire or wireless technology but on

cost-effective solutions to provide access Involve users in planning

• Community groups, NGOs, SMEs, etc. Include training

• technical and business skills• SMEs, NGOs, disadvantaged, etc.

Start with “thirsty horses” • Prioritize based on interest, commitment, rather than only

political level or population

Thank you.For more information:hudson@usfca.edu

www.usfca.edu/fac-staff/hudson