Tag Archives: silicon valley telecommunications council

Telecom Deficit Slows Angola’s Development

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Steve Blum, Tellus Venture
Associates, doing project
due diligence in Huambo
Telecommunications 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.

Landmines and destroyed military equipment litter the Angolan countryside
Destroyed military equipment
litters the countryside
It’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.

Microwave trunking
Trunking within
and out of
Huambo is
based on
point to point
microwave
Chinese, 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
Luanda, the capital,
has the consumers,
Huambo has the produce
The 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.

When they say shovel ready, they mean real shovels

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Notes from the Silicon Valley Telecom Council’s Policy Luncheon

The prevailing view amongst the private sector people who have been talking to contacts with the Obama team is that the lion’s share of the broadband money will go to incumbent carriers. “Jobs are created through the existing structures,” was how Mike Masnick put it, quoting a highly placed source in the administration.

Yesterday’s Silicon Valley Telecom Council policy luncheon in Santa Clara was sponsored by AT&T, but big carriers by no means dominated the panel. Speakers represented a wide variety of sectors and areas of expertise, from both inside and outside the Beltway:

With $7.2 billion specifically earmarked for broadband projects, the stimulus package is the largest U.S. government disbursement for telecom purposes ever. That’s the good news. The bad news is that the panelists were 100% in agreement: the priority is job creation, not broadband build out, and incumbent carriers can create — or protect — more jobs more quickly than start up companies or community-based projects.

The audacious hope is that once the dust settles from the stimulus extravaganza, a genuine broadband and telecommunications policy, with money attached, will make its way through the administration and congress. That program, should it ever come to pass, would address how to upgrade the U.S. national broadband infrastructure and extend it to unserved areas. The stimulus package, though, is about something else.

There’s a lot of detail that is still uncertain, not least who will be running the National Telecommunications and Information Administration and the Rural Utilities Service, the two agencies that will be ladling out the grants. But the consensus yesterday was clear: whoever is appointed will be answering directly to John Maynard Keynes.

It’s not doing the great man justice to focus on a couple of his quips, but he put the awful truth very succinctly. If you hire hire a bunch of people to dig a ditch, you’ve stimulated the economy. If you hire more people to fill it back in, you’ve doubled the stimulus. It doesn’t matter that nothing of value was created in the process. What is most important is that people are receiving pay packets and spending the money.

The bottom line is that the Obama administration would rather fund a project that puts a thousand people to work installing ten miles of fiber, than pay ten people to lay a thousand miles.

Of course, a thousand miles of fiber will support many thousands of jobs in the long run. But, according to yesterday’s private sector expert view, the administration will be thinking about the here and now when it hands out the cash. The first, and maybe only, question for applicants will be “how many people will you hire today with this money?”

Short term thinking perhaps, but as Professor Keynes put it, “this long run is a misleading guide to current affairs. In the long run, we are all dead.”

Real-time tweets from the Silicon Valley Telecom Council’s Spiffy Awards Gala

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  • At Silicon Valley Telecom Council Spiffy awards, a comedian is warm up act for a venture cap presentation. Who will be funnier?
  • VC won’t have to be too funny to win, I think.
  • Tim Chang, Norwest Venture Partners up now, says trends are good for telecom.
  • Says U.S. consumers are spoiled, over-entitled and living beyond their means. Recession is good time to reset.
  • Says in recessions “good enough” is good enough for consumers, hard times for premium or leading edge plays.
  • Says social media are features and functionality for other businesses, not a biz model.
  • Series A ventures need a go-to-market, major channel partner in hand to even hope for VC money.
  • Says strategic investors might be the only game in town right now.
  • Gaming – app store & micro-payment plays particularly – looks good, so does enterprise market.
  • On to the Spiffys!
  • Edison award for most innovative start up goes to 4Home.
  • San Andreas award for most disruptive technology goes to Bling Software.
  • Fred & Ginger award for most supportive carrier goes to Swisscom.
  • Core award for best fixed Telecom opportunity goes to Brilliant Telecommunications.
  • Zephyr award for best mobile opportunity goes to Bling Software, two awards for them tonight.
  • Alexander Graham Bell award for best communication solution is a tie: Trutap & Amika Mobile.
  • Ground Breaker award for engineering excellence goes to Morpho.
  • Prodigy award for most successful SPiF alumni goes to 2Wire.
  • That’s the 2009 Spiffy awards, time for cocktails!