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Viewing cable 06LIMA1587, INAUGURATION OF DFI MICRO TELECOMMUNICATIONS

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Reference ID Created Released Classification Origin
06LIMA1587 2006-04-25 17:30 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Lima
VZCZCXYZ0021
RR RUEHWEB

DE RUEHPE #1587/01 1151730
ZNR UUUUU ZZH
R 251730Z APR 06
FM AMEMBASSY LIMA
TO RUEHC/SECSTATE WASHDC 0024
INFO RUEHBO/AMEMBASSY BOGOTA 3309
RUEHQT/AMEMBASSY QUITO 0273
RUEHLP/AMEMBASSY LA PAZ APR SANTIAGO 0450
RUEHCV/AMEMBASSY CARACAS 9349
RUEHBU/AMEMBASSY BUENOS AIRES 2353
RUEHME/AMEMBASSY MEXICO 3313
RUEHBR/AMEMBASSY BRASILIA 6701
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAFCC/FCC WASHDC
RHEHNSC/NSC WASHDC
UNCLAS LIMA 001587 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
DEPT FOR WHA/AND, WHA/EPSC, EB/CIP 
COMMERCE FOR 4331/MAC/WH/MCAMERON 
COMMERCE FOR KEN FERGUSON 
AID FOR NOREEN JANUS 
USTR FOR KENNETH SCHAGRIN, JONATHAN MCHALE 
FCC INTERNATIONAL BUREAU FOR ETALAGA 
 
E.O. 12958: N/A 
TAGS: ECPS ECON EAID PE
SUBJECT: INAUGURATION OF DFI MICRO TELECOMMUNICATIONS 
COMPANY 
 
REF: Lima 1158 and previous 
 
1.  (SBU) Summary.  Ambassador Struble, accompanied by an 
official from USAID Washington, the Vice Minister of 
Industry, and the General Managers of Voxiva, Motorola, 
Telefonica and Cisco, inaugurated on April 19 the first 
micro telecommunications company established under USAID's 
Last Mile Initiative and the Digital Freedom Initiative. 
The company, located in the rural highlands, established a 
local loop to provide internet and telecommunications 
technology to more than 25,000 people in a 300 square mile 
area.  Currently, 34 families and 13 institutions receive 
service, and the company plans to expand its services in the 
next three months.  End Summary. 
 
Providing a Necessary Service to 
A Previously Underserved Area 
-------------------------------- 
 
2.  (U) For the past two years, USAID offices in Washington 
and Peru, working with local partners Voxiva, Motorola and 
NGO Citi Puyhuan, have developed a pilot plan to provide 
local internet and telephony service to the rural highlands 
as part of the Last Mile Initiative and Digital Freedom 
Initiative programs.  USAID chose Molinos, a small town in 
the district of Jauja approximately 300 miles from Lima, due 
to its location and lack of rural connectivity.  Molinos, 
which has a population of 10,000, covers a wooded and hilly 
70-mile area.  The district of Jauja covers a 300 square 
mile area with a population of 25,000.  The area, like most 
of the highlands, has only recently begun its economic 
expansion and is highly dependent on agriculture. 
 
3.  (U) In September 2005, local entrepreneur Fermin 
Torrejon, using USAID funding and technology from Motorola, 
established a micro telecommunications company (microtelco) 
called Televias Puyhuan in Molinos to provide a full package 
of services, including a local telephony loop using voice 
over internet protocol (VoIP), internet and television. 
This microtelco now provides telephony coverage to 34 
families in Molinos, as well as 13 institutions, including 
the municipal government.  Prior to the installation of the 
microtelco, Molinos boasted one pay phone for every 3,000 
inhabitants, no internet connections and limited television 
broadcasts. 
 
4.  (U) Although the company officially opened its doors in 
September, the Ambassador, accompanied by a representative 
from USAID/Washington Noreen Janus, Vice Minister of 
Industry Antonio Castillo, and the General Managers of 
Voxiva, Motorola, Telefonica and Cisco, traveled to Molinos 
on April 19 to inaugurate the company.  During a four-hour 
inauguration ceremony held in the Molinos town square, the 
Ambassador and Peruvian Government officials emphasized how 
this microtelco will improve the connectivity between the 
people of Molinos and the rest of Peru.  The Ambassador 
highlighted that in addition to promoting the sharing and 
development of ideas, the inhabitants of Molinos and Jauja 
will be able to establish linkages to promote trade and 
foster economic development. 
 
Next Steps:  Nationalizing 
The Pilot Project 
-------------------------- 
 
5.  (SBU) According to entrepreneur Fermin Torrejon, 
Televias Puyhuan plans on expanding its services to the 
neighboring towns in the Jauja district, most of which lack 
internet and telephone capabilities.  By the end of 2006, 
the microtelco hopes to service 300 users, which will allow 
the microtelco to break even financially.  Torrejon will 
coordinate with Voxiva representatives to refine the 
 
business model to lower costs and attract new users. 
 
6.  (SBU) The Digital Freedom Initiative (DFI) Working 
Group, headed by the U.S. Embassy, is working closely with 
the Ministries of Production and Communications to establish 
Internet access in more than 1,000 rural areas.  Telefonica, 
Cisco, Motorola and Voxiva have pledged their support to 
roll out microtelcos in 50 rural areas in 2006-2007.  The 
DFI Working Group will also meet with officials from other 
U.S. companies in Peru, many of which work outside the 
information and telecommunications sector, to obtain their 
support for the establishment of microtelcos in their 
regions.  The goal is to promote a sustainable 
entrepreneurial microtelco model that can be deployed in 
underserved areas throughout Peru. 
 
Comment 
------- 
 
7.  (SBU) Although telephone and Internet usage in Peru has 
increased dramatically in the past five years, 70 percent of 
users are located in Peru's coastal areas.  Because of 
Peru's rugged terrain, local telephone companies find it 
difficult and costly to expand their services to the rural 
areas in the Andes.  The microtelco model, established under 
the Last Mile Initiative and the Digital Freedom Initiative, 
encourages local entrepreneurs to promote economic growth in 
rural areas through the provision of information technology 
to local users.  This USAID project, which is still in its 
infant phases, has the potential to be a model for the rest 
of Peru.  Our DFI Working Group will continue to monitor 
Televias Puyhuan's progress and may assist the company with 
its business model.  The microtelco entrepreneur has offered 
to advise other entrepreneurs in Peru who wish to copy this 
model.  Our coordinated efforts, along with the continued 
support of key Peruvian Government Ministries, should enable 
the expansion of local loop services to some of Peru's most 
rural areas. 
 
STRUBLE