A telecommunications tower. Photo by cogdogblog/flickr/cc.
On a hill towering above Port-au-Prince is an array of sky-high antennas visible from much of the city. Each antenna transmits cell phone or wireless internet signal to users in the capital, and there’s a reason the site sticks out so much, other than its conspicuous location.
In the United States and many other countries, a handful of service providers often share telecoms infrastructure. Usually one firm, and maybe a third-party infrastructure company not in the mobile phone or internet business, owns a tower and leases access to multiple companies. It’s cheaper and more efficient than requiring each company to build towers everywhere.
In Haiti, such tower-sharing isn’t allowed, perhaps because the country’s main legislation governing telecoms is a bit out of date for the wireless age—it hasn’t been updated since 1977.
The result is inefficiencies that drive up the cost of internet access, which most users get via wireless 3G or 4G because of the country’s lack of wired infrastructure. Every internet service provider builds towers on the same mountain-top spots, so each site is littered with about four or five different towers. In remote areas, each tower needs its own generators burning fuel to power each station, polluting the environment four or five times over, and increasing the cost of service ever more.
“Who do you think is paying for that?” Allen Bayard asks. Bayard is CEO of Access Haiti, one of the country’s largest internet service providers. “The end user is paying for that.”
When I ask him about challenges of providing internet in Haiti, he responds with a sincere question. “Where do you want me to begin?”
Access Haiti began as a dial-up internet provider in 1999 and offered its first wireless connections for something like $1,200—Bayard can’t recall the exact price but just remembers it was prohibitively expensive for most potential clients.
In addition to the obstacles that anyone doing business in Haiti faces—sporadic power outages, poor roads, having to put up an abundance of collateral to get financing—Bayard cites having to self-supply electricity for every tower station and related site maintenance as huge challenges. Many antennas sit atop remote mountains, so the company routinely tears through several service trucks, which are ravaged en route to service towers while hauling fuel uphill to maintain the sets of generators, inverters, and battery banks that keep them running.
In the past year, 4G WiMAX has proliferated throughout Port-au-Prince. WiMAX is an innovation that allows high-speed internet to be transmitted wirelessly across vast distances, sort of like if you had Wi-Fi that could span valleys rather than simply your apartment. LTE, another type of 4G network used by AT&T and Verizon in the U.S., is a competitor. Before WiMAX was adopted, each company used a proprietary wireless system such as Expedience, the Motorola system Access Haiti used.
Roger Blanchet runs Hainet, Haiti’s largest internet service provider, with a market share of 43 percent according to a Google report from 2010. Hainet started about 10 years ago with dial-up service and now has about 60 internet towers throughout the country. Most of the company’s business comes from residential customers, but Blanchet says Hainet also serves Haitian businesses and a few international NGOs and organizations like the U.N., the U.S. Embassy, and USAID.
Blanchet calls WiMAX “a breakthrough.” It’s enabled the company to sell wireless hotspots that allow up to eight devices to connect to the internet, no router required. Hainet has been selling them since January 2012 for about $100, and Blanchet thinks the model is the future of internet access for the country. Connection plans start at $33 per month for an unlimited data plan with 1024 kbps/256 kbps down-/up-load speeds. The most expensive residential plan costs $204 per month and is four times faster.
Blanchet says competition is his biggest challenge—from not only other ISPs but also Digicel, the country’s dominant cell phone company, which has about 80 percent market share after buying its biggest competitor, Voila, in the spring. In 2011, the World Bank estimated that Haiti had 4.2 million mobile subscriptions, but less than 10 percent of the population uses the internet. If Digicel can bridge that gap by turning more phone users into internet users in a country that lags in smartphone adoption but is BlackBerry crazy, it will gain even more business.
“There’s a big boom right now for the internet business,” Blanchet says, adding that he welcomes the competition. “Everybody will have to be aggressive, provide good service, provide good post-sale service.”
Bayard has similar thoughts. “There’s a lot of pressure there,” he says, “but it’s good to have competition. You have to keep on your toes. It stimulates the market.” He offers an example from the mobile sector to make his point. When Digicel came to Haiti in 2006, Bayard guesses that there were half-a-million cell phones in the country. “Now,” he says, “there are 4.5 or 5 million.” Viola had 300,000 subscribers at the time Digicel entered the market, he adds, and they had “something like 1.5 million” when Digicel acquired them. The competition clearly helped grow the mobile phone market, until Digicel all but gobbled it up. (The country’s other primary remaining provider is Natcom, of which the Haitian government owns 40 percent; Vietnamese mobile operator Viettel owns the other 60 percent.)
MultiLink is another of the country’s largest ISPs. CEO Paolo Chilosi says that the most difficult thing for his company is increasing capital, or rather finding financing to do so. “Nobody wants to invest in Haiti,” as he puts it.
Bandwidth prices in Haiti are extremely high due to a lack of fiber optic cable connections to the wider world—a lot of internet traffic is routed through the neighboring Dominican Republic, which has multiple fiber optic cables connecting it to international networks. Haiti long had only two connections—one to the northern region of the country and one to Port-au-Prince, which was damaged in the earthquake of January 2010. Google’s report estimates that the neighboring Dominican Republic has 35 times more bandwidth than Haiti.
But Chilosi is exaggerating. There may not be many investors willing to come to Haiti, but there are more than zero, which Digicel proves. The cellular company invested $16 million in a fiber optic cable to connect Haiti to an existing cable that links Jamaica to the United States. It went live in the summer, and Bayard expects the new cable to significantly reduce bandwidth costs in the country. The project fulfilled one of the Google report’s primary recommendations—increase international connectivity to reduce costs, increase bandwidth, and ultimately expand access.
Bayard also notes that funding has been a little easier to find since the earthquake. He says he started working with Inter-American Development Bank after the quake and received some funding from them, which had never happened before. Financing remains a challenge, however, because banks require much more collateral from a Haitian company than from a company operating in the United States. Because of risks of doing business in Haiti, Bayard says that he has to put up three to four times the collateral of what a company working in the States would.
Despite all the challenges of bringing the internet, and Facebook, to Haitians, Blanchet says that “the sky is the limit” for the sector. “But if there’s no education and people are not aware,” he adds, “there’s no way we’re going to meet that point where it’s going to help us to develop.”
“A lot of people, they know the word ‘internet,’ but they’re not really familiar with all the advantages of it—what it is, what you can do with it.”
Those advantages are significant. An April 2012 McKinsey & Company report estimated the annual valued generated by the internet in nine advanced economies at $1,488 per person. The study also identified 30 so-called “aspriring countries”—nations that are on the brink of achieving “levels of prosperity approaching those of the advanced economies”—and found that the internet generated only $119 per capita each year. Considering that the report categorized the BRICs and countries including Mexico, Nigeria, and Vietnam as “aspiring,” Haiti’s figure is almost certainly lower.