Tuesday, March 30, 2004

Daiwa Eurotelcoblog No. 7、Friday, 12th September, 2003: Virtually free 4G (original email blast 10:38 AM Friday, 12th September, 2003)

One of the themes we have been tracking consistently this year is the potential for incumbent revenue leakage to alternative network structures, both at the municipal (Westminster Council, Paris Metro Wi-Fi projects) and grassroots level. Today brings the launch of an initiative in Ireland, called RoamFree.info (http://roamfree.info/php/index.php), which proposes to create a national 4G network based on a meshed 802.16 architecture. Management of the entity would be entrusted to a charity organisation, and the proponents claim that the deployment and running cost of the network nationwide could be covered by a donation of EUR2 per week from every citizen. At the heart of the network architecture are MeshBox APs from Locustworld (http://www.locustworld.net/), a UK start-up we wrote about some months back. Given the recent track records of EU and regional development agencies in funding regional/local alternative projects (and the frequency with which Cisco seems to be popping up in supporting roles in such initiatives), we think it would be unwise to dismiss such a project at this point.

Highlights from the introductory e-mail we received this morning were:

"New developments in wireless technology have presented communities with an opportunity to banish the phone bill forever and replacing it with a flat rate fee of between EUR2 - EUR3 per week. The system uses the new wireless networking cards (802.16) and modifed routers from LocustWorld.com which puts deployment costs at EUR500 per node."

"The backbone would operate on the 802.16 standard capable of a throughput of 70Mbits at a range of 30Km. This means that 4 nodes can provide a coverage of 900 sq km (30Km x 30Km grid). The island of Ireland is 84,288 sq km (32,544 sq. mi.) Ireland's greatest length is 485 km (302 miles) and it is 304 km (189 miles) at its widest point."

"To provide a single 70Mbit backbone for Ireland, 94 routers are required at a cost of EUR47,000. To provide a 10Gbit backbone of 142 10Gbit 'lines', that would take 13,429 routers at a cost of EUR6,714,786 (unit cost EUR500). Ireland has about 4.5 million residents, so that equates to around EUR1.50 per citizen to purchase outright. 2 million subscribers paying EUR1 per week would generate EUR104 million a year. This would allow a backbone of 154Gbits (142, 154Gbit lines) capable of effectivly delivering, under 100% loading, 710Kbits (over twice as fast as BT broadband) throughput to each of the 2 million connections of network/internet access. This can also be bought each year! After 5 years there would be 770Gbits providing, at 100% loading, 3.55Mbit guaranteed minimum."

"If we then asked for an additonal EUR1 (EUR104 million per year) per week, we create a lot of jobs, 1,700 to be exact, at EUR20,000 per year (total EUR34 million), With 1,000 engineers that provides a 20:1 router to engineer ratio, with an 84.3 sq Km area to cover, in a worst case scenario and 700 staff in administration, support, and numerous other areas. In Ireland that would provide a maximum response time of 2 hours to any incident."

"It doesn't get much simplier than this, EUR2 a week, no phone bill, free 710Kbit dedicated Internet access at least, free live video & video conferencing, free mobile phone calls, free instant messengers, free SMS, free MMS, etc, etc..".

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