Malawi Pilot – Prioritizing and selecting districts for UAS Project

Background
This practice note is derived from a pilot project design and feasibility analysis for a universal access (UA) competitive tender, under the World Bank project Creating the Enabling Policy, Legal, Regulatory and Institutional Environment for Improved Access to ICT services in under-served Areas in Malawi. The government of Malawi was seeking to achieve the following objectives:

  • Finalize its UA policy, recommend the best approach to be taken along with the institutional arrangements;
  • Elaborate a detailed implementation strategy for UA and rural telecommunications;
  • Create an enabling legal and regulatory framework for improved access;
  • Assess the overall investment climate and propose actions to deal with current bottlenecks including taxation issues, foreign exchange restrictions import duties, etc.; and
  • Assess feasibility of innovative business models to promote access to under-served areas, such as small business entrepreneurs becoming telecom resellers, the possibilities of supporting micro credit schemes and other innovative methods used in other developing countries.

District selection criteria for the first competitive funding project
All parts of the country need to be provided with UA as soon as possible and from a political and social perspective, all districts should have approximately the same priority. However, from the perspective of scheduling – i.e., which district(s) should have the first pilot projects– some factors needed to be considered. This practice note presents the selection criteria for choosing a district(s) that would be most suitable for a pilot project. Districts to be selected should have the following characteristics:

  • A substantial population not yet covered by mobile signal, e.g., below 75 per cent of existing population coverage;
  • A telecom viability indicator above 0.5 (i.e., revenues estimated from subscriber affordability and willingness to pay should be more than half the level required for commercial viability), which is the strongest selection factor and a prerequisite;
  • A low capital cost per person, i.e., the required subsidy amount divided by the number of people that benefit should be low, e.g., the cost per person for the pilot project in Phalombe is USD 5, whereas the cost per person is USD 34 in Rumphi. Clearly, the project in Phalombe is better value for money;
  • Ideally but not necessarily, the district should be a contiguous area, e.g., if two districts are selected, they are adjoining each other;
  • Include districts and growth centres targeted by a parallel ICT information services project, which are the following ten districts: Zomba, Phalombe, Mulanje, Nsanje, Ntcheu, Neno, Mwanza, Mangochi, Rumphi and Chitipa; and
  • Possess a required subsidy amount that meets the available resources budget (USD 1 million).

The table below provides a summary of the key selection criteria for each district, based on the model findings. Districts which could become commercially viable through a smart subsidy in the short term are shown in blue, and districts which are close to meeting the commercial viability criterion are shown in red. Unviable districts need either be paired with viable districts or need to be addressed at a later date. It also shows a modelling estimate of how many public access payphones would be needed per district to provide adequate service, as per the universal access (UA) policy.

The table excludes seven districts whose populations are already highly covered and subsidy is not required.

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