ICTworks by Inveneo

Village Telco and OpenBTS are different technologies but they have a lot in common. One big thing they have in common is the belief that telephone networks don't need to be run by top-down command and control organisations, that anyone with some expertise and comparatively modest resources should be able to start their own phone company.

I'll give a brief summary of both and then explain the challenges that each face.

OpenBTS Overview

OpenBTS is an open source GSM base station. It is inexpensive. It costs 5-10% of what a commercial base station costs to deploy. It operates on less that 60W of power which means it's OPEX is dramatically lower than a typical base station which can consume anywhere between 2000 - 8000W depending on its age. It has an equivalent range to commercial BTSes (~20km in 900MHz band).

It has an all IP back-end which makes every mobile phone look like a SIP phone. If ever there was a technology that said "instant phone company" this is it. The Daily Wireless posted a great summary of OpenBTS if you need more detail.

OpenBTS Challenges

The big challenge for OpenBTS is access to spectrum. In Africa, most of the available mobile spectrum in the 900MHz and 1800MHz bands have been locked up by mobile operators. They will fight tooth and nail at every turn to block something like OpenBTS disrupting their model. I think the hope for OpenBTS on this continent is to have one of the smaller hungrier mobile operators take up this technology and really focus on rural markets. That said, after Bharti-Airtel's very aggressive moves on pricing in Kenya, perhaps they might interested in something like OpenBTS to further shake up the market. As it happens there is an operator in India called VNL which is using a similar strategy.

From a technological perspective, two limitations to OpenBTS is that it does not yet support GPRS but I gather that will shortly be available, and it does not support handoffs between cells. In terms of deployments, OpenBTS is being deployed for its 4th year at Burning Man but more importantly they have done a deployment on the island of Niue which is more of a real world demonstration of the technology. They may have others that I am not aware of.

Village Telco Overview

The Village Telco by comparison uses low-cost WiFi devices to create a wireless mesh, a cloud of connectivity where each device extends the range of the network. This sort of network has bee commercially deployed by companies like OpenMesh and Meraki in the US. What is unique about Village Telco is the development of a meshed WiFi access point mashed up with an Analogue Telephony Adaptor which is a device that translates the analogue voice signal of an ordinary telephone into digital communication that can be understood by the wireless access point.

This device, which we call the Mesh Potato, then allows you to plug an ordinary phone into it and start making calls. Each device has a range of about 400m on a flat plain or about half that in an urban environment. More on the Village Telco rural voice services business model.

Both OpenBTS and the Village Telco can operate autonomously or even better they can been connected to the VoIP services on the Internet or interconnected with the PSTN and mobile operators.

Village Telco Challenges

With the Village Telco, we deliberately chose unlicensed "WiFi" spectrum in order to drive around the whole spectrum regulatory issue. Although historically this has not been the case in Africa, increasingly Wifi is recognised as unlicensed spectrum by the majority of African countries. This means that you can set up a network without seeking permission from the regulator. Generally, it is only when you start charging money for the telecommunication services that you need to have a telecommunication operators license. In places like Kenya and South Africa you can seek exemption from that as a non-profit. Alternatively, you could affiliate a Village Telco network with an existing VoIP service provider and fly under their wing.

For the Village Telco, WiFi has limitations in that its range is shorter and transmission power is lower. That's the trade-off for being unlicensed. WiFi spectrum doesn't travel through concrete very well, thus WiFi connections ideally have line-of-sight or at least very modest obstacles. That's why we designed the Mesh Potato with a rugged outdoor enclosure so the user can stick the device higher up outside the house if necessary.

For the Village Telco, the deployments to date are quite small because we have been working with a small run of about 200 beta Mesh Potatoes. There is a Village Telco network in Dili, East Timor which is being developed by a local NGO there. And we have small network in Cape Town. Both should grow quickly as soon as the commercial Mesh Potatoes are available. As it happens, they recentlty went on sale if you want one.

This post started as the OpenBTS and Village Telco - low-cost GSM networks email thread

Mobile phones seem to be ubiquitous in the developing world, until you leave the main population centers. Then service drops off fast, and rural residents are left to walk miles to get a signal. But it doesn't have to be that way. There should be a strong business model for the right entrepreneur to deploy a local phone system cheaply, and with a good investment return.

Back in April, the Technology salon studied this issue and we found that micro mobile telco business models are essential, yet elusive. That's before I learned about the Village Telco initiative.

This project aims to assemble and develop the cheapest, easiest to setup, manage, and scale, local telephone company toolkit in the world. Even better, the Village Telco focuses creating a sustainable business model for entrepreneurs as much as the technology.

In awe of such a ambitious goal, I interviewed Steve Song about the Village Telco project, with an aim to understand its business models.

ICTworks:
You say that any entrepreneur with modest resources and technical ability should be able to deploy a Village Telco. What might be the business model that you anticipate them using? And in that model, what are the start up costs? Revenue model? Break even projection?

Steve Song:
We've discussed this a lot within the community. Initially we picked the figure of USD $5,000 and asked whether it was possible to start a Village Telco with that sum of money and could you break even in six months.

The answer is yes but it really depends on your priorities. The above assumes that every user will pay for their own Mesh Potato. Any telco really begins to deliver value when it begins to experience the network effects when the network reaches a certain critical size.

Accordingly, you might want to discount the Mesh Potatoes in order to stimulate roll-out, just as the mobile operators do. In this case you would need more upfront money for roll-out on the assumption that a larger network is going to generate significantly more income because it is delivering higher value to customers.

Here's a fairly simple spreadsheet at which you are welcome to play around with. Don't take any of the existing data in there too seriously as it is really intended as a sandbox to play around with different scenarios e.g. discounted Mesh Potatoes, monthly subscriptions, no monthly subscriptions, free local calls, more or less Internet use, etc, etc.

There are a host of variables and it is not clear until we get some more examples in the field which model is going to suit the market best. This is likely to vary from country to country and from urban to rural areas.

One key selling point of the Village Telco is free local calls. In Johannesburg, Dabba who operate a Village Telco-like operation in Hillbrow in Johannesburg, they have found that 70% of the calls are local on the network.