02 January 2009

A Lie Agreed Upon: Getting Hybrid Cellular into the Field

I just got back from 25C3 in Berlin. Thanks to Delta, I had a miserable time getting there, but I'm still glad I went. I met a lot of good people. I tried Club-Mate. I tried my best mangled German with the Reisegep├Ąck staff at Flughafen Tegel. On the last night, Harald Welte treated me to a steak dinner, one of the few proper sit-down meals I had on the whole trip.

I met a lot of telecommunications professionals and we discussed the problem of carrier acceptance of the OpenBTS approach: providing a simple set of services at minimal cost and replacing the GSM "core network" with collection of peer-to-peer SIP applications.

There was a general consensus that the OpenBTS approach was technically feasible, even on large scales, and could be integrated into existing GSM core networks if needed.  There was also a general consensus that most incumbent carriers would reject the technology, even if integration into core networks is easy, largely on economic grounds.  The simple truth is that nobody in the telecommunications industry is really interested in making a modest profit by serving large numbers of very poor people.  The typical cellular executive would rather talk about extending 3G or 4G networks into rural Africa and then not do it.  Talking about bringing scorching fast networks to the poor is much more exciting than actually building a 2G system that they can afford to use.  

This consensus is not new to me.  I have had nearly the same conversation several times over the last two years with a handful of ex-employees from African cellular carriers. The big carriers will continue to concentrate on squeezing more revenue from their more affluent customers by offering more complex services. In the meantime, these big carriers will continue to sit on spectrum that is completely unavailable to the people who live under it, or, in the case of South Africa, cover the whole country with services that only a small minority can actually afford to access.  To borrow a phrase from Mark Twain, universal service is "a lie agreed upon" for the telecommunications industry.  It won't happen, even at modestly profitable levels, unless regulators force it.

This does not mean that OpenBTS will not find a commercial market.  It just means that it will not find a market with incumbent commercial carriers until regulators force them to get serious about universal service. That won't happen until early adopters, most likely small rural carriers, use OpenBTS to demonstrate that self-sustaining universal service really is possible.  So we're looking for early adopters.

1 comment:

  1. I don't remember the name or the company, but I was at a UN telecom event (don't ask, long story) and I met a really cool guy. This guy runs a company that provides internet/phone service to people in the rural western areas of the US. I believe they are based in OK City.

    I mention this because it suggests that there are people--in the telecom industry!!--capable of thinking about how to make profits from less densely populated areas with less affluent customers.

    At the same conference, I met with several senior officials (ok, I sat next to them on a bus) of the government of Nigeria. They are desperate to fund projects that might help them roll out uber-cheap wireless services... because they feel that this is a huge gain in terms of overall economic growth.

    If you want to get hooked up with these folks, perhaps the UN folks in Geneva at the Telecom talking shop might be worth a visit....