Tag Archives: PACNOG

PACNOG Talk

One of the items in yesterday’s brain dump was a talk I presented to the Pacific Network Operators Group (PACNOG) at the Sebel Hotel. It’s titled ‘Network Effects: Social Significance of Mobile Communications in Vanuatu‘. It explains Network Effects and how they manifest themselves in village life, then looks at some obvious and not-so-obvious implications for network providers in the Pacific. Briefly, my point is that village life features very tight communication loops from which no one is exempt. The one-to-one (but not the one-to-many and many-to-one!) aspects of village communications will be enhanced by mobile comms, and smart network operators should do what they can to enhance this effect. The result will be that our island geography (and gestalt) creates more value per user than traditional business analysis might lead us to believe.

One of the questions that came up regularly when I asked for feedback on my talk was how people would be able to afford mobile services. Given that 5000 vatu (about USD 50) per month is not an unusual family income in the village, even topping up with 200 vatu credit (currently the smallest increment available) would be a burden, would it not? The answer is yes and no.

There’s an interesting relationship between commodity prices and agricultural production here in Vanuatu. When the price of commodities like coffee, copra and cacao rises, production actually decreases rather than increasing. The reason for this is that the need for cash in rural areas is quite limited. Once a villager earns enough to pay school fees, clothing and a few staples, there’s no more need to sell their crop. So when they can earn the same amount of money for less effort, they do so.

This is one of the factors leading to a kind of economic insulation for the average ni-Vanuatu. I wrote a bit more about other aspects of this phenomenon in this article for the Daily Post.The bottom line is that the cash economy remains small in rural Vanuatu because the cash economy is only a small part of the whole picture.

When mobile communications are introduced, the perceived need for cash increases. In the short term, this puts stress on the pocket book, but things can probably work themselves out through a nominal increase in the amount of cash being generated (e.g. through cash crops). Add to this the increased efficiencies that come hand in hand with better communications, and we’ll likely see more prosperity and economic activity – in cash terms – than less.

In other words, this is not a zero sum game.

That detail is still lost in many traditional planning processes. In fact, ignorance of this dynamic is a bigger inhibitor to growth than many other external factors. If people can’t forecast capacity properly, their estimates come out consistently low, and because products and services don’t meet the need, they don’t have the effect they’re intended to, so people don’t invest in them.

Very often, taking the last few years’ numbers and extrapolating linear growth creates a self-fulfilling prophecy in which growth remains linear only because that’s as much as it can grow. Unfortunately, it allows analysts to sit back and say, ‘See? I told you so.’

Update: Looking a little further down this continuum: Once the inherent economic elasticity in this system is used up, however, poverty sets in. An example would be people planting cash crops in places once reserved for food crops. It’s a fine line between building the cash economy and building dependence on the cash economy in such as way that a person’s outputs can’t meet their costs.

Hodge Podge

Here’s a quick and dirty list of geeky things that I’ve been stewing over recently:

  • Greg Ross’ delightfully intelligent Futility Closet features a very interesting map. Memorising it should be a pre-requisite for any technology discussion. Understanding it should be a criterion for sainthood.
  • Jan Chipchase is exploring that map. He’s a poster boy for the the new geek chic: rambling around the world, finding out how people live their lives, then trying to find ways to make technology that fits. I’d be more condescending about his rock star status, but hey, that’s mostly what I do, too. If he’s the rock star, then I’m the wandering minstrel. I suppose each of us is good for the other.
  • I say it below, but I need to set the proper emphasis here: Mobile communication devices are the application platform for the rest of the world. Power, cost, literacy, localisation and different approaches to network management (i.e. more entrepreneurial space in newborn networks than in established ones) all contribute. 2G, 3G, NG are all great, but think about SMS interfaces first. There’s a huge opportunity space there.
  • Digicel launched their mobile phone service  last week, making a bigger splash than anything I’ve seen since I arrived here.
    • Photos of the mad queuing (and a couple from the party) here.
    • They’ve done admirably in the first 90% of the job, which was getting the network up and running. Let’s see how they do on the other 90% – keeping it running.
    • I bought myself a 2000 vatu (USD 20) phone and a separate SIM card for my Motorola in order to test the service. I’d been using the Digicel service for barely two days, and when I ran out of credit, I swapped in my TVL SIM (with nearly 4000 vt credit in it) and had an important call fail 5 times in a row. I immediately put my Digicel card back in and stumped up another 1000 in credit. In less than two days, I’d come to assume that calls would actually work. This in spite of the fact that I’ve been using TVL’s services (and working closely with them on occasion) for years. I should have been inured to their level of service and surprised by the improvement that Digicel provided, but the opposite was true. Lesson: We only think about the network when it’s not working.
    • I heard rumours that Digicel had to fly a replacement generator to Ambae by helicopter on their first full day of service. The story might be a case of the Coconut Wireless running a little hot, but if it turns out to be true, I would be interested to know whether the machinery died of natural causes or of bush knife. There’s a whole article in here, but briefly stated, here’s the equation: A radio tower is of no value until it’s turned on, so nobody objects to its existence until the service starts up. From that moment on, people have something they can hold hostage, so however generous the initial agreement, there’s almost always a re-negotiation, usually with a metaphorical knife to the throat.
    • Update: I’ve also got reports of an outage in Tanna in the South. How does it go again? One is an accident, two is incompetence, three is enemy attack. Or heck, it could just be birthing pains.
    • Double Update: Turns out it wasn’t outages, per se; it was delays commissioning some of the systems. Sources with a clear view of the proceedings told me that Digicel could not have turned up their service at all even a few before the launch date – that’s how close to the wire things got. To be clear: This doesn’t reflect poorly on Digicel at all. Quite the contrary. I’ve seen projects that were trivial in comparison lose months (even years) because of minor technical or logistical problems. The fact that one or two of the generators weren’t 100% ready on the day does nothing to diminish the fact that they increased communications coverage nationally by an order of magnitude; and that, to my knowledge, is unprecedented anywhere in the Pacific since 1942.
  • On Monday at 09:00, I presented a talk to the Pacific Network Operators Group (PACNOG) at the Sebel Hotel. It’s titled ‘Network Effects: Social Significance of Mobile Communications in Vanuatu‘. It explains Network Effects and how they manifest themselves in village life, then looks at some obvious and not-so-obvious implications for network providers in the Pacific. Briefly, my point is that village life features very tight communication loops from which no one is exempt. The one-to-one (but not the one-to-many and many-to-one!) aspects of village communications will be enhanced by mobile comms, and smart network operators should do what they can to enhance this effect. The result will be that our island geography (and gestalt) creates more value per user than traditional business analysis might lead us to believe.
  • The telecom licensing regime will be opening up a little further some time before the end of the year. I need to find a way to convince local operators to take advantage of this opportunity. It won’t be easy because:
    • There are a bunch of better-funded outsiders who want in, and are willing to sit on losses in order to get market share; and
    • Capital investment for Vanuatu companies can be really, really hard. Most companies here live hand to mouth, so asking them to amortise any kind of investment is a huge demand.
    • Hopefully, the Universal Access Fund will help mitigate the problem. It’s not clear yet how it will be administered, and there will be a lot of flies buzzing around that particular pot of honey, so I’m not willing to get enthusiastic about the opportunity just yet.
  • Now that we’ve actually got the beginnings of truly nationwide communications, we need to deal with power generation. The toughest part will be hardware. See, we’ll never generate enough power to run a desktop computer in every house, and community telecentres are expensive and of limited usefulness, so we need to see how suitable things like the Asus eEe, OLPC and smart phones are to use in the islands.
    • On that front, Wan Smolbag Theatre will be getting about 25 XO laptops soon for their young people’s literacy project. Yay! They’ve also sent an eEe up to their youth center in Loltong on Pentecost island for evaluation.
    • The Mac Minis we first sent there performed in a less-than-stellar fashion due primarily to hardware problems. Even trivial problems (like a stuck CD) can take weeks or months to resolve.
    • The biggest challenge we face is the assumption that being in the tropics means we have lots of sunlight. Uh, maritime climate, anyone? Jungle? Mountains? Solar panel not work good on cloudy day under tree with no flat places. Okay, there are places in Vanuatu where solar power is fine, but unfortunately, it’s least reliable right when you need it most (e.g. hurricane season).
    • One way to mitigate power requirements (and decidedly non-trivial UI/literacy issues) is to leverage SMS-based apps as a computing platform. See above. There’s a lot of work going on in this area in India and Africa. We need to do more here. See this and this for previous rants on the subject. Must find more sponsors….
  • UNDP has finally released funds for the Vanuatu leg of the People First Network. Only 5 years late. (Yes, you read that right: 5 years.) I’ll be doing a little consulting to try to re-frame the project to reflect the changes that have occurred in the last half decade.

Somewhere in here, I eke out a living, write 2000 words a week and try to have a life. I’d love to be a rock star just like Jan and find a Daddy Warbucks to take all my mundane worries away, but I’m not starving, so I can’t complain.