Wednesday, December 27, 2006

Nationwide Wi-Fi a Success in Macedonia

What began as an attempt to get more computers (and Internet access) into schools in Macedonia, has become, through the unlikely pairing of American dollars and Chinese computers, a successful deployment of a nationwide broadband wireless network. The network is revolutionary, not simply because it is considered the largest hotspot in the world, but because of its impact on the economy and culture of the country it connects.

The project began three years ago, as part of USAID's e-Schools Project. Initially, 460 primary and secondary schools in the Republic of Macedonia were to receive a total of 5300 computers donated by the People's Republic of China. To accommodate the new computers, labs were built in each of the schools. Once the computers had arrived and the labs were built, however, the problem of getting online presented a daunting challenge.

Because of the mountainous terrain, the vast distances between schools, and the sky-high prices being charged by the existing broadband operator, a creative solution was in order. Glenn Strachan, Senior ICT Specialist in Broadband Wireless Technology for AED, was brought in to direct the project.

"I had just done wireless in Romania and Uganda," says Strachan, who has thirty years of IT experience under his belt. "When you looked at the schools on the map, you were really everywhere in the country. So, I suggested that we look at it as a nationwide connectivity project."

While the original goal was only to deliver Internet connectivity to the schools, Strachan says, "it would have been an abject failure" because of the monopoly held by one provider. Basic Internet service was costing subscribers 120 euro per month. The answer was to start, not by building towers, but by changing the laws that governed the telecom business in Macedonia.

"There was no competition to the incumbent," says Strachan. "It was predatory. It was putting out of business anyone who tried to compete against it. There were ISPs in business, but they were just barely in business. If we did a competitive selection of the five that existed, and we guaranteed them a funding base, achieved through the connectivity to 460 schools, that's 545 total sites -- a $2.5 million pool that we could use to help capitalize the selected ISP. This would give them enough income to build out the backbone of their network, and in exchange, we traded service provisioning for 24 months."

Before Strachan and AED arrived, a Macedonian entrepreneur had very few options for funding his or her potential WISP.

"They couldn't go to a bank with a business plan and get a loan," says Strachan. "In Macedonia, there is no concept of that. What loans you can get are at 40% or 50% interest. So the owner of an ISP couldn't say look, there's this new thing called wireless and we're gonna make a go of it. So, we helped fund that growth. We established a competitive process and designed an RFP where we outlined exactly what we wanted: the provisioning of services, the location of the schools. We didn't tell how much we'd pay, but said they had to be competitive and create a business plan that suggested sustainability. Our goal was to create competition and a sustainable solution."

Once the law was changed and competition became possible, four vendors offered proposals. The winning proposal came from who announced plans to use equipment from Strix Systems for the deployment in December, 2005. Within four months the entire network was up and running. Since winning the contract, has gone from 24 staff to 75.

" had to hire 300 people to do the install," says Strachan. "It was pretty amazing."

Since the network went live, nationwide Internet use has risen dramatically.

"In May 2006, we did a survey and we found out that the Internet penetration rate went from 4% to 14% home use," says Strachan. "Not only did people start using wireless, but they started using all five ISPs because everyone had to reduce their pricing structure. became the lowest cost provider, so the monopoly cut its prices by 90%. So now, we have a 10GB download account in Macedonia for 10 euro (about $12.20). We've gone from an outlandishly expensive network, to something that people can afford. Once they can afford it, they can use it."

Phase Two of the project focuses on training the teachers and students who will use the network in the schools, raising awareness within the general population, and adding 95 more sites including NGOs and hospitals across the country.

In Phase Three, AED will teach the schools how to afford to maintain the network and how to sell the services at night. The USAID-funded project, which covers 95% of the country, officially ends on September 30th, 2007.

"Our ultimate goal was to create a sustainable solution," says Strachan, whose work on the Macedonia project ended in October. "If we'd only focused on the schools, it would not have been sustainable. Now the schools can afford it, and they don't have to pay for it until October 2007."

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