Peru rural communication services project : final evaluation report

Utilizing beneficiary interviews and site visits, this final report evaluates the Rural Communications Services Project (RCSP), a pilot project to establish a telecommunications network in San Martin, an isolated high jungle area in northeastern Peru. RCSP, as implemented by the Empresa Nacional de Telecomunicaciones del Peru (ENTEL), installed earth stations at three major cities in San Martin, and linked four secondary towns to the stations through radio telephone service. While project duration was expected to be three years, site selection and installation alone took three years, and the project itself lasted six years. Cost underestimates also contributed to the delay in implementation, and once the equipment was installed, technical problems caused further delays. The radio telephone equipment was especially prone to failure, although it should be noted that performance of the system improved markedly over the course of the project. Despite these problems, there was immediate demand for the systems, especially from business and commercial interests. During the project's first two and one half years, some 207,441 calls were placed, generating $272,000 in revenue. Audioteleconferencing (ATC) services, developed in cooperation with the Ministries of Agriculture, Health, and Education, were used by the Ministries and ENTEL, primarily as a substitute for face-to-face training. Despite demand, however, system revenues were unable to cover operating costs, let alone contribute to capital recovery during the first two years of operation. Benefits to individuals and communities were harder to assess, although communication alternatives (e.g., letters, telegrams) were more expensive than phone calls, and interviews suggested that the value of the call exceeded its price. Similarly, the cost of face-to-face training far exceeds that of a typical ATC seminar. While the evaluation concludes that the RCSP makes a good argument for projects of this type, it warns that transfer of sophisticated communication technology is very difficult and requires thorough planning and innovative management practices to be successful.