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Almost a year after the earthquake struck Haiti, most recovery efforts are decidedly low-tech. But some advocates and techies argue that technology can address long-term problems plaguing the country. We explore how mobile banking and wireless technology are changing the economic landscape in Haiti.
- Stéphane Bruno Senior Information and Communication Technology Advisor (ICT), HIFIVE (a USAID-funded mobile technology program); Member of the Presidential Working Group on ICT, Vice President of the Haitian Association of Information and Communication Technology
- Maarten Boute Chief Executive Officer, Digicel Haiti
Most Haitians have no direct access to financial services. Now some development experts hope that wireless technologies can be harnessed to expand access to banking. Maarten Boute, CEO of Digicel Haiti, discusses a new mobile money competition, jointly funded by USAID and the Bill and Melinda Gates Foundation:
MR. KOJO NNAMDIFrom WAMU 88.5 at American University and broadcasting live from Radio Metropole in Port-au-Prince, Haiti, welcome to "The Kojo Nnamdi Show," connecting your neighborhood with the world. It's Tech Tuesday. Later in the broadcast, a conversation with the head of the cell phone provider that's ubiquitous in Haiti and the Caribbean and the necessity for green energy in Haiti. But first, 10 months after the earthquake, most of the hard work is still decidedly low tech. But this Tech Tuesday, we're exploring how technology is being harnessed for the relief and recovery effort. Later this hour, we'll learn about green energy projects across the country and the challenge of getting the country's energy grid back up and running.
MR. KOJO NNAMDIBut we begin with a look at wireless technology. Four years ago, cell phone technology was out of reach for most Haitians. Today, more than half the population owns at least one wireless device. Some techies believe cell phones could form a new wireless foundation for short and long-term development, transforming business, banking and everyday life. We're joined in studio by Stephane Bruno. He is vice president of the Haitian association of Information and Communication Technology. He's also a senior advisor for Information and Community -- Communication Technology with a program called HIFIVE, a financial services project funded by the U.S. Agency for International Development. Stephane Bruno, thank you very much for joining us.
MR. STEPHANE BRUNOThank you. And I send my salute to everybody that is listening to the show.
NNAMDIThank you very much. Just four years ago, Haiti did not have much wireless penetration. But today, over half of the people in this country do have a cell phone. Can you give us a sense of how cell phones are used across the country and how these services compare to what we have, say in Washington, D.C.?
BRUNOWell, you know, mostly in Haiti, cell phones are used for communications. And this is very important because, before the introduction of cell phones in Haiti, there are a large part of the population that was out of touch because of the quality of the roads and people living in rural areas. It was very difficult to communicate. So with the weakness of our landlines, when the cell phones arrived, it was an occasion for the majority of nations now to be able to communicate. But more and more now, cell phones are being used for other uses as well that we will see through the show.
NNAMDIIndeed. But before the earthquake, Haiti had a very small landline-based telephone system. Now, it seems that most people think the future of communications in this country is completely wireless. Do you think this country is going to skip the entire process of laying down physical lines altogether?
BRUNOWell, I think that somehow we'll have a mix of both because very soon we'll have one company that will start laying fiber optics cable throughout the country. But, in general, it was always -- wireless technology was very important in the country because it was less expensive to offer communications over wireless signal energy to a vast majority of the population instead of going through the heavy infrastructure needed to layout cables and those kind of things.
BRUNOBecause of the mountainous topography of the country as well, it's very difficult to imagine ubiquitous fiber network throughout the country. But in a few years from now, I think we'll have both. So, probably, wireless could be used as a last-mile solution to reach the most difficult areas, but we'll still have cell phones as being the number one device for people to have access to information.
NNAMDIOf course, it's a Tech Tuesday conversation. We're coming to you live from Port-au-Prince, Haiti, and inviting your calls at 800-433-8850. That's 800-433-8850. Or you can join the conversation at our website, kojoshow.org. Raise a question or make a comment there. Send us an e-mail to email@example.com or a tweet, @kojoshow. Stephane Bruno, Haiti has been hit with two crises, first, a cholera outbreak and then Hurricane Thomas. How was the existing information in information technology harnessed to respond to those situations?
BRUNOWell, I can say, maybe -- I have to go back from after -- right after the earthquake. About one month after the earthquake, we already had a system where people could call in a centralized -- using a centralized number, and people would update information about the situation on the ground. And this information was displayed on a map, in an interactive map. And that same technology that was put into place by a local company here in Haiti is still being used to report the cholera outbreak, for example.
BRUNOAnd this platform is being used by public services and some NGOs who identify where these -- you know, these cholera outbreaks are occurring, so they can follow on the map interactively how the disease is spread. So technology was used in some way. In fact, technology even saved a lot of lives after the earthquake, people texting from under the rubble and this kind of things.
NNAMDIYeah, because it's my understanding that in the aftermath of the earthquake, Digicel, Haiti's largest mobile phone company, was able to map where phone calls were being made and extrapolate exactly where their customers were.
BRUNOYeah, and, also, people that were in -- on their networks, using SMS, they would -- they were sending these messages to people, to their friends and family. And some of these messages were appearing on Facebook, and people were compiling these messages to send them to rescue workers. So that's how they knew exactly where to go to find people that were still texting from under the rubbles. And they saved a lot of lives like that. So there were a number of initiatives here using cell phones, using smartphones as well, to record the exact location of things and mapping them on a map that is being done locally by some local friends.
NNAMDIIn case you're just joining us, it's Tech Tuesday. We're coming to you live from Port-au-Prince, Haiti, and we're talking with Stephane Bruno. He is vice president of the Haitian Association of Information and Communication Technology and a senior advisor for information and communication technology with a program called HIFIVE, which we'll talk more about later. But, Stephane, the earthquake took a horrible physical toll on Haiti. It was a drama that also played out in cyberspace. You've written about a very unique transnational network that emerged in the hours after the earthquake. It's a complex story, but suffices to say you were part of that huge transnational emergency relief network. Talk about that.
BRUNOWell, what happened is that after the earthquake, since a lot of communications were relying on wireless technology, a lot of cell towers were -- have collapsed, but the core network of communication -- and also of the Internet -- was still intact. So that's why we perhaps, more or less, rapidly, the operators were able to restore communication because it was just a matter of putting in places cell towers that have collapsed. So there was coordination on the ground from people that were on the ground coordinating, you know, the reestablishment of the network, and also some NGOs that came in the country, like Invinio, that helped reestablish communication.
BRUNOBut what happened during a short time frame is that, since there were chaos, some networks were established in an abrupt manner, and so there was a lot of interference. And, you know, those networks started to -- I would say, step onto each other toes, in fact...
NNAMDIInterfere with one another.
BRUNOExactly. So after that, the situation was stabilized. The Invinio network started to use localized space as well to buy bandwidth and to coordinate the efforts to restore communication. So, now, after this period of chaos, the situation was normalized after that.
NNAMDIDo you have any questions or comments about the wireless infrastructure in Haiti? Do you have relatives in Haiti, and were you able to use technology during the course of the earthquake to communicate with those relatives or help them in any way? You can call us at 800-433-8850. Send e-mail to firstname.lastname@example.org or a tweet, @kojoshow. Stephane, Haiti receives roughly $2 billion a year in remittances, sums of money sent back by Haitians living and working abroad. Traditionally, this went through companies like Western Union. Now, it's my understanding that cell phones are often the preferred mechanism.
BRUNOWell, what happens is that now we are working on mobile payment platforms in Haiti, which will enable Haitians to be able to use their cell phones to make payments. We really see this tool to be the number one tool to allow Haitians to conduct transactions with each other with higher security and enabling even the mom-and-pop shop and the merchant at the corner of the street to be able to participate in mobile commerce. Because what happened is that today a company that wants to do electronic transactions, the requirements are very high to accept credit card, et cetera. And the credit card is not accessible to the majority of Haitians because of the buying power of Haitians. So, now, that enabling the mostly widespread -- the most widespread tool to become...
NNAMDIFifty-five percent of Haitians own cell phones.
BRUNOExactly. So, automatically, all those people will be part of the formal economy and be able to use that tool to conduct transactions. And this will also create new opportunities, new entrepreneurs that will think about other services that will be possible now that you have this tool. So in the few -- I mean, I think any -- as a second phase, you will start seeing remittances sent directly to the phone of the recipient, which is a good thing because there is more intimacy. You don't have to walk to go to a specific place to get your money. So I think that this will enable, also, enterprises to conduct business with people even if they live very far from where they are. So I think that there are a lot of opportunities that will be created with those payment platforms.
NNAMDICell phones being used to get remittances from relatives and friends abroad. We're coming to you live from Port-au-Prince, Haiti. And if you'd like to see photos of what we've been doing over the past day or two, you can go to our website, kojoshow.org, and look at some of the photos there on our Facebook page. Stephane Bruno, you work for a program called HIFIVE, which stands for the Haiti Integrated Finance and Value Chains Enterprises project. Can you tell us exactly what that is?
BRUNOHIFIVE is a USAID-funded project, that the main objective is to increase access to financial services to enterprises in rural areas, in agricultural production, et cetera. And one of the sub-objectives of this project is to use information-communication technology to increase access to finance and to reach financial inclusion. Because we have made a map of all points of financial service in the country and realize that in most of the country's -- in most parts of the country, people have to walk more than four, five hours to reach a point of service.
BRUNOThat's why we believe that cell phone and mobile technology -- since the cell phones cover about 98 percent of the territory -- will help. You know, this creates the distance in access and to reach those people wherever they live. Now, part of that project is also a partnership with the Gates Foundation that happened after the earthquake that we call now the Haiti Mobile Money Initiative.
BRUNOAnd this partnership specifically addresses the mobile money projects, which is an incentive fund that we have put in place to encourage mobile operators and banks to introduce their mobile money projects very soon and to reach mass scale at adoption. So the...
NNAMDIThis is really an interesting mechanism. It's increasingly popular with the U.S. government, the idea of creating a competition for funds. I guess the idea is to stimulate innovation by providing a big carrot for private companies and NGOs.
BRUNOExactly. So, now, most of the mobile operators, like Voila, Digicel, even Haitel, seem to be interested on participating in the contest. The first prize is $2.5 million for the first company to launch its service and $1.5 million for the second one. Now, if they don't redraw those targets by December, they still have an additional six months, but now the prize is lower to $1.5 for the first one. And there's the second phase of the contest, which we call the scaling award, which -- where we will reward them proportionately to the number of transactions that -- if people are doing it -- using the system. So we designed it in a way to accelerate the introduction of these services in the country, and secondly, to reach mass scale at adoption on a national -- in national coverage very rapidly.
NNAMDIThank you very much for joining us, Stephane Bruno.
NNAMDIStephane Bruno is vice president of the Haitian Association of Information and Communication Technology. He's also a senior advisor for information and communication technology with the program called HIFIVE, a financial services project funded by the U.S. Agency for International Development. We're going to take short break. When we come back, a conversation with the head of the cell phone provider that's you -- you'll find everywhere in Haiti and the Caribbean. I'm Kojo Nnamdi.
NNAMDIWelcome back. This Tech Tuesday, we're exploring technology in the Haitian recovery. This week, "The Kojo Nnamdi Show" is broadcasting from Port-au-Prince. Before the earthquake, Haiti was a place with limited technological infrastructure. Now, many hope that new technologies can be leveraged to help the recovery effort. Everywhere you travel across Port-au-Prince, you see signs for competing wireless providers. Everyone, it seems, has a cell phone or a BlackBerry. An international company called Digicel is Haiti's biggest wireless provider. It's figured out how to operate and make money in a poor, developing country, setting up and maintaining cell towers in remote corners of the country with no electricity and no roads.
NNAMDIIt's also been leading a private sector force in the rebuilding effort, with a particular focus on schools. "Kojo Nnamdi Show" producer Brendan Sweeney sat down with Digicel Haiti CEO, Maarten Boute. Before coming to Haiti, he helped build wireless networks in Asia, Eastern Europe and Africa, including the Democratic Republic of the Congo. He discussed the future of wireless technology in Haiti and the challenges of operating in a country like Haiti.
MR. MAARTEN BOUTEDigicel launched in Haiti in 2006 -- May 2006. We very quickly grew to be the largest operator here. Before us coming into the market, there was about 5 percent mobile penetration. We're at 40 percent now for the whole market. And Digicel has roughly 2 1/2 million customers, which is twice the size -- more than twice the size of the second player in the market, a company called Trilogy. We came in with very low pricing. So from a handset perspective we -- you know, prior to us coming in, the handsets were costing $70 to $100 apiece.
MR. MAARTEN BOUTEWhen we came in, we came in with $10, $12 handsets. So that was one element of success. The second element is that we covered more than 85 percent of the population, which wasn't the case before. Prior to Digicel coming in, Haiti was covered primarily in Port-au-Prince and one or two of the major cities. I can say that wherever you will go in Haiti, when you go into the provinces, you'll have Digicel coverage now. So that definitely helped out as well.
MR. BRENDAN SWEENEYI mean, obviously, this is a pretty mountainous country.
SWEENEYI'm curious from a technical infrastructure perspective, what kind of challenges that presents.
BOUTEWell, the challenges are -- the mountainous part is a challenge, obviously. The biggest challenge is the lack of infrastructure. And also, it's the roads. There's no roads at all. There is no electricity anywhere out there. So that means that every single one of our cell sites or transmission sites needs to have its own power source, and that is, today, primarily with generators. So every cell site has two generators and a battery bank. The challenges are to keep all that running, so especially the generators and the diesel. That means, in some cases, having to walk up hills with donkeys to go and fill up the diesel tanks. That also means having security on -- or near or on most of the sites 'cause diesel is rare resource and, you know, tends to be stolen. So we have various systems in place to avoid that and to check that that keeps going.
SWEENEYI mean, across -- it seems -- the developing world, mobile technology has been sort of a possible, sort of, leap point from going from wires to wireless. And I guess I'm sort of curious based on your experience. You said that you had previously worked in the Congo and a number of other places sort of -- will you read us about what those technical challenges, how Haiti compares to other developing countries?
BOUTEWell, the difference with Haiti and a place like the Congo is the size. The big challenge in the Congo is that you have population coverage pockets, like in (word?), which are, like, 10 million people, and you can cover that quite easily and get a reasonable market out of it. In Haiti, there is a concentration of population Port-au-Prince, but the rest of the country is very spread out. So people are, you know, living on hills left and right, so it becomes economically difficult and not as viable to go and cover those areas, okay? Now, the advantage for Haiti is that it's smaller. So in terms of transmission, we don't have to go up to satellite for each individual site.
BOUTEWe go through -- you know, we have a transmission network over the air, which then comes to a central point in Port-au-Prince and other cities. And from there we go out internationally where we handle local traffic. The challenge of Haiti is that it's an island, and, today, there is no working international backbone of fiber optics coming into the country. Congo was the same until a few years ago, too. That's been solved, which means that we have to take our traffic out through to the air and then into a fiber which goes out or up into satellite, which is extremely costly.
SWEENEYYou said you've been here for two years. So you were here when the earthquake hit.
SWEENEYI know that there's been sort of a charitable focus with the Digicel Foundation. But I'm assuming that the programmatic focus has shifted quite a bit as it's moved towards reconstruction. I mean, can you tell me a little bit about the foundation and sort of what your priorities are in that context?
BOUTETraditionally, the foundation works in education. So, you know, every single Digicel country in a developing market has a foundation. We built -- when we started off, we built 20 schools. This was way, way back in 2006, 2007. After the earthquake, there was slightly -- a slight refocus, more in terms of what Digicel was doing than the foundation. The foundation said, okay, a lot of schools collapsed. Hundreds of thousands of children were without schools, so we decided to rebuild 50 large schools around Port-au-Prince and most of the, you know, affected areas, Leogane, Maritza and all that. And Digicel itself said, okay, let's have a look at what we can do, first, in terms of relief aid.
BOUTESo we spent 10, $15 million on relief aid, free credit, supporting some of the biggest organizations here on the ground with, you know, immediate needs, cash needs 'cause the countries and donors weren't coming in as fast as private companies could. And we're also doing the biggest reconstruction project in downtown Port-au-Prince now. There is a very emblematic market called the iron market -- the Marche de Fer -- which hosts about 1,000 merchants. It's one of the oldest buildings in Port-au-Prince. We started that project, like, a week after the earthquake. Dennis O'Brien, our shareholder, came in, and he's -- you know, we're talking in the car, what can we do fast? And he said, this is what we have to do, and this is what we're going to do.
SWEENEYI'm actually curious about the profit margin aspect of this because it seems like for an international corporation to be investing in a country like Haiti, I mean, you would be talking about based on individual users, probably, smaller profit margin than if you were operating in Europe or in the U.S. I guess I'm kind of curious about how and why this is a market that Digicel is interested.
BOUTEOkay. Well, first of all, yes, it's true, that the individual -- the revenue per user for a developing market is obviously much lower than you'd get in Europe, absolutely. The returns on the customer are much lower as well, given the fact that, you know, they just don't have the money to do it, to use the phone now. The reasons we come into these type of markets is -- for Haiti, that's a bit particular, I could say for -- especially for Dennis O'Brien. It's more of a -- it's almost like a CSR thing, you know. There's a lot of CSR to it, more than it is, you know, purely about making profits. We do create a lot of jobs here. You know, we have -- I have 1,000 direct employees, and we have roughly 50,000 indirect jobs created through people setting top-up stores, et cetera.
BOUTEWhat you see, though, is that you're actually helping the economy grow as well. So we have a -- we've done a study with -- which was funded by Proparco, which is one of our initial investors, which showed that they say that 20 percent of the GDP growth since 2006 has been -- can be allocated to Digicel and to telecoms. Because of the mobile penetration increasing, people are better off. You know, they're more efficient in doing their business -- let's put it that way -- and, therefore, you know, get more revenues and get, you know, better contact. Democracy also increases because communication increases.
BOUTESo you're right. It's not as profitable as it would be to go into a developed market. It is -- from a licensed perspective, it is a little bit less costly than going into a developed market. If you want to enter, I don't know, Germany or the U.S. today, you'd spend a few billion dollars on licenses. That is more in millions in a developing market. Now, the challenges are very high -- are very big as well. That's why there's an opportunity for people with, you know -- with guts to come into a country like Haiti and do it. It's a risk, obviously, 'cause, you know, that the -- with the challenges, security challenges, infrastructure challenges. But once you do it and you have the guts -- well, we're lucky.
NNAMDIThat was Maarten Boute, CEO of Digicel Haiti.
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