I felt really weird this morning when I found out about this, only a couple of days after running a webinar on FTTH in Emerging Markets.
The Bill and Melinda Gates Foudation has announced that they were building a fund destined to co-invest in fiber to the home projects in impoverished economies.
It's not all that surprising when you think about it. Gates is an IT man and every fiber of his being knows that broadband and economic growth go hand in hand. He's been working actively on trying to help third world countries and economies in a variety of ways through his foundation in the last few years, and this is the latest scheme.
It's not a tiny fund either, since the foundation is announcing $30bn set aside to co-invest in FTTH projects. It's not clear at this stage if this is only Gates Foundation money or if other wealthy doners like Warren Buffet will be involved. In an approach not dissimilar to Google's recent FTTH announcement (more on that below), Gates is requesting project concepts to evaluate their feasibility and their contribution to economic growth. The foundation says that depending on the project scale and the choice of countries, the number of projects they could help launch will vary.
Says Gates in a youtube video release this morning:
"This is something I've been thinking about for a long time. With our foundation, we have done a lot so far to address serious issues in the third world like malaria. But I can't help but think that if we could help these countries become stronger economically, some of these problems would simply go. In other words, cure the problems, not the symptoms…"
Gates also states that he's not looking for the fund to make money in the short term, but he wants to see this as an investment for the fund that will ultimately repay itself and feed into the fund for further roll-outs:
"I don't understand why telcos don't get this. Sure, you're investing long-term, but if the money is available it's a guaranteed payback and it will keep paying for itself many times over. The issue in many emerging markets is that the funds are not there. What we're hoping to do is initiate the Fiber to the Home deployments with this fund and let the private market take over the rest of the necessary investment and effort. Look at this as seed money on a very large scale."
While the scale of the investments in terms of coverage are hard to estimate, Gates makes a quick calculation:
"A leading Indian operator says the cost per home for them could be as little as $100 because cost of labour is so low. Assume we're funding a third of the endeavour, with $30bn we could bring a billion homes from emerging markets into the digital age, make these people participate into the world economy and society. It won't solve all the world's problems, but it's probably the biggest step towards that ever!"
He's not humble, this Bill Gates, but I gotta say I like what he's doing all the same…
Beyond the huge potential impact of this announcement, what I find really interesting here is the fact that
- this comes only a couple of months after Google made its FTTH play public
- Microsoft hates Google, and even if Gates is no longer a Microsoft man in theory, you can't help but wonder is this is not a roundabout way of positioning Microsoft in the service in the cloud play, maybe with more of an emerging market slant. I don't know quite how, but I'm a little suspiscious of corporate philantropy!
Still, as Gates says himself in the video, this is a momentous announcement:
"This date will be a date to remember… Just like every year!"
See the press release here.