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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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