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Wall Street Journal: “Start-Up May Aid Telecoms’ Reach” 22 Jul, 2008

Swedish-Indian Firm Makes Device To Take Service to Rural Areas

By Leila Abboud, Wall Street Journal
July 22, 2008

As the telecom industry gears up to reach billions of potential mobile-phone users in developing countries, a Swedish-Indian start-up has developed an innovative piece of equipment: a build-it-yourself radio tower that consumes about as much energy as a light bulb.

For years, telecom operators have been trying to expand into rural areas in Asia, Africa and the Middle East – a major growth opportunity at a time when urban areas are saturated. Some two billion new subscribers are projected to start using mobile phones in the next five years, and 80% of them live in developing-world markets, according to analyst estimates. Yet wiring villages without reliable electricity, and where residents have little money to spend, requires a technological rethink.

To power mobile networks in remote areas today, telecommunications operators pair base stations – the tower-top radio transmitters that form the backbone of mobile networks – with diesel-powered generators and batteries. These are impractical and expensive: Fuel accounts for 65% of the cost of operating a typical base station.

VNL, which has headquarters in New Delhi and Stockholm, has spent the past four years developing a simplified base station that is powered by solar panels and requires just a fraction of the electricity of typical base stations.

But convincing telecom operators to buy a stripped-down base station made by a little-known start-up won’t be easy. VNL is among many companies trying to develop mobile-phone technologies for poor rural areas. Telecom-equipment giants Telefon AB L.M. Ericsson, Alcatel-Lucent and Motorola Inc. are all looking into how they could tweak existing telecom gear to run on less electricity or on renewable energy sources.

Ericsson and Alcatel-Lucent have separately installed about 400 solar-powered base stations in African countries including Senegal and Uganda. In India, Ericsson has installed some 40 base stations that run on biodiesel, essentially recycled cooking oil. Alcatel-Lucent’s solar base station requires about 750 watts to run, while Ericsson’s solar base station requires about 600 watts. The companies wouldn’t disclose the costs, but both sets of gear require technical staff to install them over a matter of weeks.

VNL’s base station will cost $3,500 and require 100 watts to run, about the same as a light bulb. By contrast, the GSM stations most widely used today can cost anywhere from $40,000 to $100,000. The most energy-efficient models require around 600 watts; others may need several thousand watts.

“We started with a clean sheet of paper, and told ourselves that we needed to design technology perfectly suited for the rural environment,” says VNL Chief Executive Anil Raj, a former executive at Ericsson.

The tower is designed to make it easy for people with little professional training to install. The equipment comes with a pictorial instruction manual similar to those for Ikea’s do-it-yourself furniture. It has just one button, used to turn it on.

Though tested in labs, VNL’s technology is just starting to be tried out on the ground. The start-up recently signed an agreement with Quippo Infrastructure Equipment Ltd., an independent Indian mobile-infrastructure company, to test the VNL solar base station in northern India.

If VNL’s base station takes root, it could make it possible for Indian telecom operators such as Vodafone Essar Ltd., in which Vodafone Group PLC has a majority stake, and Bharti Airtel Ltd. to wire more remote villages at a much lower cost and more quickly. That is one of their main objectives, because most people in India’s cities already have mobile phones and price competition there is intense. India is expected to have the most rapid growth in new subscribers over the next three years, followed by China, according to Pyramid Research, based in Cambridge, Mass.

Beyond boosting telecom companies’ bottom lines, affordable mobile-phone service promises to change everyday life in rural communities world-wide.

As they designed the new base station, VNL officials conducted interviews in and around Deorhi, a village 200 kilometers from New Delhi. VNL also asked about its interviewees’ skills – such as how they repair farm equipment and operate generators – information that helped the company design equipment that can be installed without engineers.

Majid Khan, a construction contractor in Deorhi, said his business’s productivity has soared since he bought a mobile phone, according to a transcript of VNL’s interview with him. Mr. Khan can now call workers, rather than driving to their homes when he needs to speak with them.

With a mobile phone, “I would call my daughter and son every week,” said Kishen Devi, an elderly woman in Deorhi, according to the transcript of another interview.

As VNL Chief Technology Officer Krishna Sirohi and his team started developing the new tower, their goal was to minimize power consumption while keeping costs to a minimum.

Computer chips traditionally used for telecom equipment ate up too much power and were too expensive, Mr. Sirohi recalls. So VNL decided to buy chips designed for cars and consumer electronics, which are less electricity-hungry. VNL engineers then spent months rewriting the chip software to make it suitable for telecom gear.

The company decided to produce two versions of the base station – one for village centers, where voice traffic would be higher, and another for the surrounding fields where traffic would be low. Towers in fields could be put in virtual sleep mode to save electricity when no one was calling on them.

Mr. Sirohi, who was born and grew up in Deorhi, considers efforts to put mobile phones in the hands of hundreds of millions of people in India an endeavor similar to the one his father pursued in 1959, when he built Deorhi’s first school and then served as its principal.

“The needs of people who live here have long been overlooked,” says Mr. Sirohi.

Read the article at www.wsj.com »

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PRESS RELEASE: “First commercial solar-powered GSM system launched to serve remote and rural areas”

VNL re-engineers GSM to help operators provide affordable mobile telephony to new customers in rural markets.

July 22 2008 - Telecom equipment vendor, VNL, has finally cracked the problem facing mobile operators in the developing world: how to provide affordable mobile services to rural people - and still turn a profit.

Launched today, VNL – and its solar-powered GSM system – will change the telecoms market in rural areas across the world. For years, operators and GSM equipment vendors have struggled with the same problem, namely that traditional GSM was not designed for the unique challenges posed by vast rural areas. It costs too much, is too expensive to run, uses too much power and is too difficult to deploy (especially in areas with no electricity, poor roads and no skilled engineers).

VNL has re-engineered GSM technology to reduce its power requirement and make it suitable for a rural environment where electricity is scarce or unavailable.

The result is VNL’s WorldGSM™ system, which includes base stations that only need between 50W and 120W of power to operate (compared to 3000 W for a typical GSM base station). A WorldGSM™ base station is entirely powered by solar energy with a 72 hour battery back-up in place (also charged by solar power).

The system also includes a rural-optimized MSC (Mobile Switching Center), and a compact BSC (Base Station Controller) – making WorldGSM™ a complete, end-to-end GSM network.

Thanks to solar power, WorldGSM™ both drastically reduces the operating expenses for mobile operators, and contributes to a much lower environmental impact. VNL has estimated that mobile networks in India alone require 2 billion litres of diesel every year to just power back-up diesel generators.

India-based Luke Thomas, from the research and consulting company Frost & Sullivan, says:

“India is the fastest growing telecoms market in the world but some urban areas have already reached saturation point. VNL has opened up a whole new area of subscriber and revenue growth for operators by building a commercial – and profitable – GSM system to service remote low-density rural areas.”

Indian infrastructure provider, Quippo Telecom Infrastructure Limited (QTIL, www.quippoworld.com), will be trialling WorldGSM™ in rural areas of India in the near future. Following the successful completion of the trial, QTIL expects to roll out a complete commercial network that will be fully integrated with the networks of existing operators. Agreements with several prominent operators have been reached and are in the process of being finalised.

Probal Ghosal, CEO of QTIL, says:

“Every so often a company comes along that really changes the telecoms industry. VNL is one such company. Not only that, and more importantly, it’s improving the lives of the world’s rural communities.

I know that there will be considerable demand for and deployment of VNL’s equipment in rural India. The villages of India may be remote but the people who live there are ready and waiting for phones. Take an average small farmer, for example. He may often travel half a day just to get to a local market – only to find it is closed or not accepting his product that day. The advent of mobile phones will solve this type of problem at a stroke.”

VNL’s WorldGSM™ base stations have a number of unique features:

Low cost: priced at less than a quarter of traditional GSM base stations and profitable at very low densities and subscriber revenues.
Easy to transport: an entire WorldGSM™ base station packs into two carts and can be transported over rough terrain in something as simple as a bullock cart.
Self-deploying and near-zero maintenance: can be assembled and activated by non-engineers.
Small solar panels: the solar panels used are 2-8 m² and the power required is between 50 and 120W compared to the 200m² solar panel and 3000W required for traditional GSM Base Stations.

VNL’s WorldGSM™ base stations are interoperable with equipment from most major equipment manufacturers and are compatible with all standard handsets.

VNL is packed with telecoms industry veterans, most of whom have vast experience in bringing products and services to entirely new markets. Its CEO, Anil Raj, founded Hutch India in 1994 and served as its CEO before moving to Ericsson as President of its India operations.

Anil says:

“Telecoms operators and equipment manufacturers have traditionally failed to deliver GSM to rural areas for the simple reason that it’s just too difficult and ultimately not sustainable. There’s no power, no engineers, no infrastructure, a difficult terrain, low density – and, most importantly, low subscriber revenues. VNL’s equipment has overcome these challenges and provides operators with a truly viable way to connect the next billion mobile users.”

For more information please visit www.vnl.in or contact VNL’s PR representative Bridget Fishleigh on +44 1273 305 936, bridget@nomadcomms.com or skype: bridgetfishleigh.

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