Peru could be considered the birthplace of the Last Mile Initiative (LMI) because it provides some of the most conclusive examples that rural telecommunications are not adequately addressed through traditional means. Collecting and expending hundreds of millions of dollars each year through its Universal Service Fund, Peru deployed more than six thousand satellite-based pay phones to some of the most remote locations around the country. Yet after five years of providing that subsidy, more than 90% of the deployed phones are not self-sustainable. Trying to understand why this is the case is precisely the question that gave birth to the LMI.
The lack of context and being a single link to the outside world provides little relevance, and therefore unsustainability, to the single payphone. As any student of network theory can attest, it is the size of the network and the proximity to other nodes that increases its traffic, just look at the recent calls made from your mobile phone and you will come to notice that most of the calls are to people that are no further than 15 km from where you are at any given time.
In partnership with Peruvian technology company Voxiva and the local association Grupo Puyhuan, Alexius deployed one of the first Micro-Telcos in Peru and linked rural communities from the Jauja province in the Junin region using pre-Wimax Motorola equipment that provided a backhaul connection between these previously disconnected communities. Schools, local government agencies, and health clinics were provided with both broadband connectivity and a local loop telephone service.
This pilot project provided a rich example of what is possible in rural telecommunications and identified a number of key lessons learned in terms of what regulatory changes and financial/business incentives are required in order to leverage this business model across the country. As a result, the Peruvian government has allocated over $70 million dollars towards deploying micro-telcos in rural communities around the country and has agreed to making the regulatory changes that will facilitate sustainability for rural operators.
