GSM WLLs and Carrier Acceptance

The biggest challenge to the deployment of OpenBTS is that all of the world's cellular spectrum is already licensed, most of it to very big companies.  These big companies don't have strong motivation to deploy low-cost services in rural areas.  First, their actual cost of operation is fairly high in rural areas.  Second, even if that cost of operation could be lowered dramatically, it would create a marketing problem.  Solving the first problem will only magnify the second.

Suppose you're "Big Cellular" and you run a GSM network in the developing world.  It costs you $4-$8 per subscriber per month to operate, costing less in urban areas and more in rural areas.  But the people who actually live in rural areas can only afford about $2/month, so you mostly avoid those areas, unless a major road happens to pass through them, carrying your richer urban customers between cities.  Government regulators may pressure you to serve the rural areas, but you can always just show them your balance sheets and argue (honestly, even) that you are already giving the broadest service that can reasonably be expected for a profitable network.  Everyone's happy -- expect for the rural poor who, will never get telephone service under this model.

This is all cozy until a disruptive technology makes $2/month rural service a real possibility.  If you're Big Cellular, that's not good news.  You already have a legacy network that you're still paying for and the new technology is not directly compatible with it.  Even if it were compatible, the new technology creates a marketing problem because your urban customers paying $12/month will soon be demanding to know why they can't get $2 service like their country cousins.  You can try starting a second brand, but that's very expensive and you fear that your new, cheap brand will simply erode your existing market along the urban-rural edge.

The solution here is to make sure that the new service is not a viable substitute for normal cellular.  I'm not saying give the rural poor broken service.  I'm saying give them what they really need, which is reliable telephone service at a very low price, which is not the same thing as cellular, even if the "subscriber terminal" was built to be a cellphone.

The purpose of the new network is to provide basic telephone service in rural areas.  You don't need full cellular functionality to do that.  For example, maybe you don't implement handovers of active calls between cells.  Maybe you don't allow your rural subscribers to roam into "real" cellular networks.  If you are really cheap, maybe you even bind each SIM to a specific cell site, eliminating all of the mobility management functions.  This functionality already has a name: wireless local loop (WLL).  You use GSM like you might use DECT or WiFi, but with much larger service areas and much cheaper handsets.

Operating in WLL mode offers several advantages in this scenario.  There is the technical advantage of a much simpler core network, although a carrier can still support roaming for conventional cellular subscribers if it chooses.  There is the business advantage of no longer being a direct competitor to legacy cellular networks.  And depending on what country you are in, there may be regulatory advantages as well.

If you are Big Cellular, this new low-cost WLL is not a particular threat to your existing business.  It serves a market you would rather not deal with.  Maybe you can open a new subsidiary to operate WLL networks, or, depending on your local regulations, you can lease your fallow rural spectrum to a WLL carrier.  The WLL becomes a modest source of profit.  Universal service can be someone else's problem while you, Big Cellular, can do what comes naturally: market ever more complex services to the cities and gouge tourists with crazy roaming fees.  Everyone is happy again, and maybe this time we can spread it around a bit more.