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6287: NYTimes.com Article: A Cell Phone Surge Among World's Poor in Haiti (fwd)

This article from NYTimes.com 
has been sent to you by Philippe Charles pgcharles@hotmail.com.

A Cell Phone Surge Among World's Poor in Haiti

December 19, 2000


PORT-AU-PRINCE, Haiti   Cellular telephones may be an increasingly
popular convenience in the United States and other prosperous
countries. But demand is growing even faster in the world's poor
nations, including in Haiti, where wireless phones are considered a
necessity for those who can afford them.

 With financially distressed governments often unable to provide
adequate public services, including telephones, people are turning
to privately built wireless networks as a way to communicate over
extended distances.

 "My cell phone allows me to dream of romance," said Remarais
Brunel, a 24-year-old assistant director of a computer school here.
He has learned Spanish to be able to speak with his girlfriend, who
lives in the Dominican Republic, which shares the island of
Hispaniola with French- and Creole-speaking Haiti. "My only problem
is that I must budget my calls to just a few minutes each month."

 Amid new political and economic tension in Haiti, where
presidential elections recently returned Jean-Bertrand Aristide to
power, one of the few systems that works reliably is the privately
run cellular telephone network built by the local unit of an
American company. 

 Less than 1 percent of the country's nearly eight million people
have conventional, fixed-line phone service, compared with more
than 95 percent in the United States. And while regular telephone
service is less expensive than wireless service, there are 400,000
Haitians on the waiting list for a conventional phone line. The
wait can last as long as five years, local people say, and the
bureaucracy is such that the social and political standing of the
person seeking service outweighs other considerations. 

 The delays, and the scarcity of phone lines, help explain why the
number of mobile subscribers in Haiti climbed 150 percent last year
compared with 1998, to about 25,000, enabling cellular phone users
to account for more than a third of the nation's telephone

 Haiti is not alone among poor countries in witnessing the growth
of wireless communications services, according to figures from the
International Telecommunication Union in Geneva. 

 In some Latin American countries, wireless subscribers now
outnumber customers of traditional fixed-line telephone companies.
Wireless customers, for instance, account for almost 60 percent of
phone subscribers in Paraguay, where the number of mobile phone
users increased 88 percent last year, to 436,000. In Venezuela,
some 57 percent of telephone subscribers use mobile phones.

 And while the number of wireless users was growing by 24 percent
in the United States last year and 70 percent in Europe, the growth
rate in Africa was 116 percent. To be sure, the number of cell
phone users in rich industrial nations is still higher.

 Still, Zimbabwe had the fastest- growing wireless industry in the
world in 1999, with wireless subscribers increasing by more than
800 percent, to 174,000. In Botswana, Rwanda and the Ivory Coast,
wireless phone subscribers already outnumber users of the
traditional telecommunications network.

 "The advantage is that the existing infrastructure in these
countries is often terrible," said Kent Lupberger, manager of
communications investments at the International Finance
Corporation, the investment banking arm of the World Bank. "And
even in the worst places, there are people with money that are
desperate for a viable communications network."

 There are other reasons behind the growth of mobile communications
systems in poor lands. The cost of adding a wireless line has
declined to less than $600 from as much as $1,500 five years ago,
said Mr. Lupberger, whose group has invested in more than 20
communications projects.

 But perhaps the most important factor has been the eagerness of
public officials to allow private companies to build and operate
wireless networks, even as some governments try to maintain control
over dilapidated fixed-line networks.

 "Wireless is much less of a politically charged issue than
wire-line in most countries," said Marc Beuls, president and chief
executive of Millicom International Cellular, a company based in
Luxembourg that operates wireless systems in Vietnam, Pakistan,
Paraguay and even in war- devastated Sierra Leone.

 "There's also the fascination with wireless technology that eases
entry into new markets," Mr. Beuls said.

 If there is any country that embodies the opportunities and
challenges of adding mobile phone users, it may be Haiti.

 In the last few years, government officials   like those in some
other poor countries   have studied the possibility of privatizing
the state- controlled phone company, T l communications d'Haiti.
But the effort has been shelved because of the political
uncertainties associated with Mr. Aristide's imminent return to

 "It's run like the fiefdom of a select number of bureaucrats with
no interest in improving service," said François Benoit, a former
Haitian ambassador to the United States, who now manages the
nation's main Internet service provider. In addition to cellular
phones, Mr. Benoit relies on an elaborate walkie- talkie system to
communicate with his staff.

 The cellular network was built and is operated by a unit of
Western Wireless of Bellevue, Wash., whose executives were early to
recognize the commercial potential of bypassing a precarious
state-controlled communications network that showed few signs of

 After three years of negotiations that began in 1995, Western
Wireless was finally granted a license, and the unit, ComCel, which
was formed with Haitian investors, completed the construction of a
network here in the capital, Port-au-Prince, late last year. Since
then, it has been competing with a locally owned company, Haitel,
and has succeeded in signing up more than 18,000 subscribers. 

 "This was a rare chance to build a viable private enterprise in
Haiti," Bernard Fils-Aim , general manager of the Western Wireless
operations in this country, said in an interview here. The building
is guarded by half a dozen men with assault rifles who search all
visitors for firearms. "The country doesn't have a long history of
putting something like this together," Mr. Fils-Aim  noted. 

 Despite impressive growth in the first year of operations, Mr.
Fils- Aim  said there were substantial challenges to operating a
wireless carrier in Haiti. For instance, some subscribers have
complained that they do not have enough electricity in their homes
to recharge the batteries for their cell phones. So Mr. Fils- Aim 
allowes them to plug in free of charge at company headquarters.

 Such quick fixes aside, Haiti's fragile economy remains an
impediment in various ways. The Haitian currency, the gourde, has
declined in value this year by nearly 40 percent, to a rate in New
York just over 23 to the dollar   squeezing ComCel's profit margins
as most of the company's equipment costs are in dollars. 

 And metered service   the standard, pay-for-what-you-use billing
method in the United States   is not practical here. Bill
collection is simply too iffy in a nation where few people have
bank accounts and the postal system is unreliable. The payment
system involves prepaid service cards that are sold by a network of
more than 80 local dealers. 

 With the average annual income, according to some United States
data, only about $350, and with 70 percent unemployed, the cards
are still out of reach for most people. The least expensive
provides 200 minutes of time for the equivalent of $24. A
600-minute card, with a 5 percent discount, runs about $68.

 Still, Western Wireless is pressing forward with its business in
Haiti and several other countries. In fact, the company, which also
focuses on under-served rural areas in the United States, has one
of the most adventurous business models in the wireless industry. 

 So far, in addition to Haiti, Western Wireless operates networks
in Bolivia, the Ivory Coast, Ghana and the former Soviet republic
of Georgia. The company complements these operations with systems
in higher-income nations like Ireland, Iceland and Croatia. "We go
where the big guys fear to tread," said Brad Horvitz, its president
of international operations.

 The experience of companies like Western Wireless shows how third
world areas are adopting some technologies faster than others. 

 Poor countries, where perhaps four-fifths of the world's people
live, had about 40 percent of mobile phone lines in 1999, up from
20 percent in 1995. But those same countries had only about 5
percent of the hub computers of the Internet, according to Emmanuel
Forestier, an economist at the World Bank.

 "It's undisputed that wireless technology has had a far greater
impact on people's lives in developing countries than the
Internet," Mr. Forestier said.

 Of course, income levels and other economic and political
uncertainties are limiting the expansion of wireless systems in
some places. In Pakistan, for instance, the government shut down a
European company's wireless system for 18 months in 1995 and 1996
out of concern that separatists were using the network. 

 "You need to know how to operate a business in places without the
basic structures of commerce," said Joseph Gatt, president of
InterCel of Reston, Va., a company that operates wireless networks
in Congo, Madagascar and Guinea. 

 Still, the startling growth in some markets has created unforeseen
opportunities. Brazil, for instance, has more than 15 million
wireless subscribers, outnumbering the number of users in Finland,
Sweden, Denmark and Iceland combined. 

 "The publicly traded cellular companies in Brazil are the most
attractive stocks in Latin America," said Peter Gruber, president
of a hedge fund in the Virgin Islands that invests in Latin
America. "Who would have predicted it a few years ago?"

 In Port-au-Prince, the cell phone can be necessary baggage for
other sorts of entrepreneurial aspiration. 

 Consider François Emmanuel Carlyle-Courtois, who dreams of fame as
a rap star. Mr. Carlyle- Courtois, a 32-year-old graphic designer
who works at a cultural center in a crumbling gingerbread house,
has a wireless phone he shares with his brother to cut costs. 

 He raps in a rapid-fire mixture of Creole, French and English.
"With a cell phone, I can talk to my producer in New York," said
Mr. Carlyle- Courtois, or Elylrac by his stage name. "I can even
rap on demand into the cell if he wants something fresh. The
Americans love it when I do that." 

The New York Times on the Web



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