Mobile for Development Utilities Development Workshop Angola: Missed Calls for Monitoring Community Water Services MAY 2016 The Innovation Fund The Mobile for Development Utilities Innovation Fund was launched in June 2013 to test and scale the use of mobile to improve or increase access to The GSMA represents the interests of mobile energy, water and sanitation services. In two phases operators worldwide, uniting nearly 800 operators of funding, grants were competitively awarded with almost 300 companies in the broader mobile to 34 organisations across Asia and Africa. Seed ecosystem, including handset and device makers, grants were awarded for early stage trials, Market software companies, equipment providers and Validation grants for scaling or replication of internet companies, as well as organisations in business models, and Utility Partnership grants to adjacent industry sectors. The GSMA also produces foster partnerships between utility companies and industry-leading events such as Mobile World innovators. Congress, Mobile World Congress Shanghai and the Mobile 360 Series conferences. The specific objective of the Innovation Fund is to extract insights from the trial and scaling of these For more information, please visit the GSMA innovative models to inform three key questions for corporate website at www.gsma.com growing the sector: Follow the GSMA on Twitter: @GSMA • How can mobile support utility services? • For a mobile-enabled solution to be adopted at Mobile for Development scale, what building blocks are needed? Utilities • What are the social and commercial impacts of delivering community services to underserved mobile subscribers? The Mobile for Development Utilities Programme These insights, as well as grant-specific learning promotes the use of mobile technology objectives, are included in individual case studies and infrastructure to improve or increase access such as this one, as well as thematic reports that will to basic utility services for the underserved. be published throughout 2015 and 2016. Our programme focuses on any energy, water or sanitation services which include a mobile component such as mobile services (voice, data, SMS, USSD), mobile money, Machine to Machine (M2M) communication, or leverage a mobile operator’s brand, marketing or infrastructure (distribution and agent networks, tower infrastructure). The Programme receives support from the UK Government. This document is an output from a project co- funded by UK aid from the UK Government. The Author: Ilana Cohen views expressed do not necessarily reflect the UK Government’s official policies. DEVELOPMENT WORKSHOP ANGOLA CONTENTS EXECUTIVE SUMMARY 4 INTRODUCTION 6 Key Facts about Development Workshop Angola 7 Pilot Objectives 8 Market Opportunity 9 BUSINESS MODEL 10 The Value Proposition 10 Service 10 Use of Mobile: Technology and Partnership 11 EARLY RESULTS 14 Business Model Viability 14 Refinements to Operations 19 Customer Benefits 22 Mobile Industry Benefits 23 Conclusions 24 APPENDIX I: CASE STUDY METHODOLOGY 25 APPENDIX II: DIFFERENT REPORTING METRICS TRIALLED 26 3 GSMA Executive Summary In January 2014, the Mobile for Development • Water point caretakers do not reliably report Utilities Programme awarded the non-governmental water status when other factors outweigh organisation (NGO) Development Workshop Angola incentives. Caretakers who reported regularly (DW) a Seed grant to trial VerAgua, a programme were rewarded with entry into a monthly lottery for mobile-based monitoring of community water for free airtime. However, from August 2014 to points in the informal settlements of Huambo, Angola. March 2016, only 79 out of the registered 120 The majority of the city’s community water points caretakers reported (34% never reported). While are handpumps while others are solar-powered caretakers were supposed to report three times a boreholes and taps from the city network. All provide week, only 8% reported once or twice a week, with unreliable service due to breakages or limited supply. the remainder reporting extremely infrequently or The Provincial Authority of Energy and Water of not at all. The limited reporting rates resulted from Huambo (DPEAH) and the Water and Sanitary several factors: Company (EPAS) are responsible for these services, with support from organisations like DW. However, » Caretakers become unwilling to report they lack a monitoring system to know when repairs without repairs and confirmations. The main or new infrastructure are needed. To address this, deterrent for reporting was that repairs of DW and their technology partner SeeSaw developed reported water point problems took months or the VerAgua programme. This includes SeeTell, a did not happen at all due to failed planning for system for water point caretakers to report water repair responsibilities and financing. In some service status by making free ‘missed calls’ to different instances, caretakers thought the system was numbers corresponding to variable status, and not working if they did not receive the SMS SeeView, a mobile application for field staff to view report confirmation due to problems with the and update the water point status in the database. mobile network or SMS provider.1 Consequently, many caretakers did not see the value in The grant tested the use of these mobile tools to continued reporting. provide reliable information about water service points, which would raise the Government’s awareness » Caretakers struggle to keep functioning of poor service levels and drive a “consumer mobile phones, particularly with high airtime conscience” to demand better services, thereby costs and rapid expiration. In Angola, missed creating accountability to rapidly improve service to calls do not consume airtime, yet a minimum the underserved. The proposed business model was balance of five airtime credits (UTT) or to have DPEAH pay for the monitoring platform that approximately USD 0.292 is required to initiate enables them to better manage services. DW and any call. Additionally, airtime expires if it is not SeeSaw tested this through a pilot of 120 water points used within 30 days and the minimum airtime in Huambo. The key findings include the following: purchase is USD 2.88.3 Despite DW initially giving some caretakers phones with credit, caretakers struggled to maintain credit for reporting. Some did not have working phones after they were damaged, lost, sold, or power was not available to charge them. 1. SeeSaw could not confirm that caretakers received SMS confirmations in 3% of cases, on average. 2. Mobile operators in Angola use a standard airtime credit, Unidade Tarifária de Telecomunicações , Telecommunication Tariff Units (UTT), which is worth 7.2 Kwanzas (AOA). 1 USD = 125 AOA based on the average OANDA exchange rate during August 2015 which is the approximate midway point of the pilot. At the time of writing in April 2016 however, the value of the Kwanza had dropped to 1 USD = 165 AOA. 3. This smallest top-up is only available at machines (not scratch cards) for one of the operators (Unitel), while the other (Movicel) has a smallest top-up value of 450 Kwanza or about 3.6 USD. 4 | Executive Summary DEVELOPMENT WORKSHOP ANGOLA » Caretaker responsibilities shift and and EPAS’ collection are variable and not recorded, communities use alternative water points and sometimes caretakers directly use this money without DW’s knowledge. Caretakers for small repairs. Furthermore, EPAS revenue goes to sometimes delegated their roles to others but general budgets within the Provincial Government failed to explain reporting responsibilities to and are not reserved for maintenance of water their replacement or notify DW of the change. points. As a result, funds have not been readily Caretakers would also stop reporting on some available for repairs, even though the mobile-based of the water points that were not in use during monitoring solution has added somewhat more the rainy season when shallow household wells visibility into where repairs are needed. provided a free and convenient water source. • Government financing or an interim solution DW attempted to address these issues with more for repairs is required at the outset to sustain frequent in-person follow-ups with caretakers to retrain caretaker engagement and demonstrate them, reiterate the value of reporting and reassign the impact of monitoring. The pilot aimed to reporting responsibilities. This, however, demanded use water status reports to advocate for the more time and resources from DW than expected. Government to improve water services. However, Moreover, DW lacked sufficient in-house technical this meant caretakers were reporting problems expertise to manage small changes to the system and before there was a solution or financing in place depended on remote support from SeeSaw. to make repairs. As a result, the caretakers quickly lost interest. Ultimately, DW had to finance spare • Simplicity in caretaker reporting is key, but the parts and labour to demonstrate the value of trade-off is limited information. The SeeTell reporting although there have been ongoing platform used missed calls to be quick and easy discussions about Government financing and for caretakers. Missed calls were made to numbers EPAS has contributed some labour. Therefore, that each corresponded to a different service future deployments must include an immediate status. The pilot initially tested different reporting maintenance solution. metrics for each of the three types of water points. Reporting water service as “on” or “off,” and These findings highlight the challenges of water point reporting hours of service did not make sense for caretakers reporting service status and the difficulty handpumps, which are only pumped periodically, in using monitoring to drive government to improve and faced other challenges. The reporting services without an interim solution for financing carried forward was simplified to three options - maintenance either by government or a third party. functional, partially functional, or non-functional Although DW and SeeSaw made efforts to address - after removing a fourth option for water quality, challenges, the VerAgua programme in Huambo was and the required frequency was reduced from daily ultimately reduced by half to just 68 caretakers in to three times per week. This kept reporting simple January 2016. Nonetheless, the Luanda Government for caretakers; however, at the same time, reports (the capital city) has shown continued interest in only indicated the possible need for repair, yielding VerAgua and is now supporting the replication of limited information on hours of service or the issue. the services there, with the lessons learned from this pilot leading to improved design and implementation. • Ambiguous policies and opaque financing for Implementation in Luanda began in August 2015 maintenance hinder the impact of monitoring. for reporting on the status of the city’s network of Households make water payments to the community water points. To date, caretakers have caretaker and EPAS takes a portion of this for reported more regularly and funds have been made general maintenance. However, these payments available for timely repairs. Executive Summary | 5 GSMA Introduction Development Workshop Angola (DW) has been and Energy (DPEAH), which oversees the Huambo working in Angolan civil society since 1981. DW Water and Sanitary Company (EPAS), a government works alongside the Angolan Government to support entity responsible for implementing and maintaining decentralisation, with a focus on improving the infrastructure. This includes the limited piped water provision of basic services, developing community network that directly connects 30% of the population, economies and rehabilitating social infrastructure and while another 30% is served by community water settlement following Angola’s civil war. Through DW’s points. The remainder of the population relies on development of a community management model informal water resellers and unimproved shallow wells for water points (referred to locally as MOJECA), DW at some households. identified the need for monitoring water services to establish accountability between the Government and The approximately 300 community water points communities to drive improved services. in Huambo are made up of three different types of systems as depicted in Figure 1, with the large majority Background on Huambo’s Water Services being wells with handpumps. Water services and policies in Huambo are the responsibility of the Provincial Authority for Water FIGURE 1 Different types of community water points in Huambo Wells with manual handpumps such as the Solar powered boreholes that pump water Taps from the city water network AfriDev pump shown here from the ground into storage tanks 6 | Introduction DEVELOPMENT WORKSHOP ANGOLA DW previously constructed many of these water Need for improved Water Services points with financing from the Government and international donors, and has established community Water supply from the community water points is management associations4 at 230 of the water points. unreliable; the piped network is intermittent with The management associations include the caretaker low pressure and all systems suffer from breakages who opens and closes the water point and oversees or stolen parts. This forces people to either rely on collection of payments and general operations, as well as informal water vendors selling water at prices inflated a treasurer. The associations collect payments from each by 10-15 times the normal price, according to DW’s household. The payment amount varies by community, observations, or use unsafe sources. Due to a lack seasonality and whether households use water for of human resources and funds, DPEAH/EPAS do domestic consumption only or for laundry as well. On not collect information about water service status average, a caretaker might collect 5,000 Kwanzas (USD at community water points and do not have regular 40) a month, retaining about 15% (USD 6) for salary maintenance operations. Nor do they have oversight while the remainder is intended for DPEAH/EPAS to pay on the performance of community management and for the bulk supply of water in the case of taps and for their collection of payments. general maintenance of all water points. Key Facts about Development Workshop Angola FIGURE 2 Organisation overview as of December 2014 Name Development Workshop Angola Sector Water services, with broader focus on economic and social development Year Established 1981 Country Footprint Angola Water point monitoring via caretaker reporting through missed calls and mobile application to support Service field investigations (software developed and operated by partner SeeSaw). Market Segment Informal settlements relying on community water points in urban and peri-urban Huambo. Total Systems/ 120 water point caretakers trained with each water point serving approximately 700 people; however, a Customers Served maximum of 79 caretakers carried out reporting at least once. • Missed calls to different numbers indicate variable water status at designated water point • SMS sent to caretakers to prompt reporting, confirm received reports, and communicate about the lottery Use of Mobile: • Mobile application for DWA staff to review recent reports and update water point status Technology and Partnership while in the field • No partnership with a mobile network operator; however, DW awarded mobile airtime through a lottery to caretakers who reported regularly 4. Locally referred to as “GAS” based on a Portuguese acronym Introduction | 7 GSMA FIGURE 3 DW’s water-related work in Angola DW established DW and SeeSaw replicated community managed water the VerAgua programme in points in the municipalities Luanda of Cachiungo (Huambo) 2015 and Chinguar (Bié) 2013 2011 2013 2014 2015 DW worked with partners to install water systems DW implemented this pilot equipped with solar for monitoring 120 water panels managed under the points in Huambo using MOJECA framework mobile technology 2011 2014 Pilot Objectives The objectives of Development Workshop Angola’s • The role of airtime to incentivise reliable reporting. Seed grant were to firstly trial a system of free missed calls and a mobile field application to monitor • The potential for field-level, real-time information water services. Secondly, the pilot sought to test if to empower water users, an NGO, and government the reported information could lead to improved to demand and deliver improved services by water services by giving DPEAH/EPAS the real-time bringing attention to informal settlements and information needed to promptly make repairs and the poor communities. evidence needed to allocate more resources toward maintaining water infrastructure, while also enabling • The extent to which poor communities are water users and NGOs to advocate for better services. both willing and able to pay for services and how this can lead to informal settlements The expected lessons to inform the broader water being mainstreamed within normal municipal sector, as defined by DW and SeeSaw at the outset of service provision. the pilot included: • The testing of a business model of creating value • The potential for mobile reporting of service from data on water services that governments and/ delivery issues in low-income areas to lead to or NGOs are willing to support financially. service improvements for attainment of the Millennium Development Goals. 8 | Introduction DEVELOPMENT WORKSHOP ANGOLA Market Opportunity Addressable Market Market Assumptions The market opportunity for DW and SeeSaw’s service As outlined in their grant proposal, DW and SeeSaw is characterised by Angola’s low rate of access to launched their service in Huambo based on the piped water services and high dependence on other following assumptions: improved sources.5 For example, handpump usage is 34% nationally, 43% in urban areas and 26% in rural • The 70% of people who rely on communal water areas.6 This means about 7.5 million people, out of the sources live near or below the poverty line. total population of 22 million,7 rely on improved sources that are not piped to premises, with the majority • Community water points will remain the most of those being in urban areas. However, if these equitable and cost-effective service. sources are unreliable, as seen in Huambo, even those considered to have “improved access” are forced to rely • Consumers at public water points typically pay on unsafe or distant alternative sources. a rate of 25 Kwansas (USD 0.20) for 1000 litres of water. By contrast, over 60% of the population has access to GSM networks.8 This means about 20%, or 4.5 million • DPEAH/EPAS take the majority of water revenue people, are within the addressable market that has collected by the caretakers to cover their bulk access to communal water sources considered to be supply and maintenance services; the remainder is “improved” and are covered by GSM networks which used to remunerate caretakers for their service. could be leveraged for monitoring to ensure reliable services. This pilot targeted urban and peri-urban areas • DPEAH/EPAS deprioritise supply to informal that depend on improved community water sources; settlements in favour of household connections however, there could be a potential to trial this service because the community water points are not in rural areas as well. metered to support revenue collection. Mobile Ecosystem • DPEAH/EPAS seek to improve their financial sustainability and require monitoring of services in The Angolan mobile ecosystem is still nascent in terms order to improve them and be able to collect more of mobile services, yet Angola’s penetration of unique of their expected revenue. subscribers, at 39% of the population, is on par with the Middle Africa9 regional rate of 34%.10 Of the two • The vast majority (90%) of the population in mobile operators in Angola, Unitel is currently the Huambo has access to mobile phones and network mobile market leader, with a market share of 71-73% in coverage is 100% between both Unitel and Movicel. 2015.11 Neither Unitel nor Movicel offer mobile money deployments at present; however, in late 2014, the Angolan Investment Bank (BAI) launched a mobile money service that can be used with either operator. 5. The WHO/UNICEF Joint Monitoring Programme specifies improved and unimproved sources as follows: “An improved drinking water source is one that, by the nature of its construction, adequately protects the source from outside contamination, particularly faecal matter.” A full list of sources considered improved and unimproved can be found here: http://www.wssinfo.org/definitions-methods/watsan-categories/ 6. WHO/UNICEF Joint Monitoring Programme, 2015 Update: http://www.wssinfo.org/ 7. World bank Data Bank, 2014 http://data.worldbank.org/country/Angola 8. GSMA Intelligence Data for 2015 Q2. 9. A grouping that includes Angola, Cameroon, Central African republic, Chad, Congo, Democratic Republic of Congo, Equatorial Guinea, Gabon, Sao Tomé and Principe. 10. GSMA Intelligence, Data for 2015 Q2. 11. GSMA Intelligence, Data for 2014 Q2 – 2015 Q1. Introduction | 9 GSMA Business Model Value Proposition VerAgua’s proposed business model would more customers, making the organisation more create value for DPEAH/EPAS by providing timely financially sustainable and less dependent on national information on which water points have been Government subsidies. Therefore, DW and SeeSaw operating in order to maintain reliable supply and proposed to eventually charge DPEAH/EPAS a fee for yield revenue. Indeed, DPEAH should draw more the information service based on the number of water revenue through providing reliable service to points benefiting from it. Service and Pricing DW and SeeSaw’s monitoring service to • Repair of water points. Maintenance of water DPEAH/EPAS included the following components points is the responsibility of DPEAH to fund during the grant period: and EPAS to implement. However, DW found it necessary during the pilot to initiate maintenance • Baseline status of water points. DW carried in order to demonstrate to all stakeholders the out a baseline functionality survey for 289 water value of the monitoring service (see results section points in Huambo and discussed the results with for more information). DPEAH/EPAS. It was expected that the Government would not pay • Status reports to the Government. DW sent for the monitoring platform during the pilot, but a monthly report to DPEAH/EPAS, which would eventually pay for the service on a per water summarised the weekly status of each water point basis following successful demonstration of its point, and met to discuss the level of reporting added value. The anticipated pricing was based on the and need for repairs. The content and frequency number of water points and was between USD 5-15 of this report was developed through early input per annum per water point, for between 2,000 and from DPEAH/EPAS. 10,000 water points. 10 | Business Model