Forget 3G: RoamAD delivers cellular Wi-Fi
Submitted by Esme Vos, Managing Director Lemon Cloud BV (October 2, 2002)
3G was supposed to usher in the bright new world of fast wireless data transfer with even faster transfers of cash from the pockets of consumers to mobile operators. Too bad for the operators. They paid too much money for the licenses, ran out of cash to build out the expensive 3G networks and no longer have access to cheap capital. Just when things couldn’t get worse for the operators, here comes RoamAD, a New Zealand start-up, with a new technology that may just hasten their demise. Or come to their rescue.
What RoamAD offers is a cheaper alternative to 3G. The company’s proprietary technology extends the 802.11b standard to allow always-on, non-line of sight mobile broadband connectivity over hundreds of square kilometers. This means that an end user can connect to the Internet and office networks, make and receive phone calls (even to landline phones) anywhere within the network. The cost of building a RoamAD network in a large metropolitan area is a fraction of what it would cost to build a 3G network. Better yet, it is compatible with existing devices, such as laptops, PDAs and mobile phones that come equipped with an 802.11b compatible card. The company’s technology may also provide a way to deliver broadband Internet access, without significant infrastructure costs, to remote areas that still rely on dial-up connections.
RoamAD operates a 3 square kilometer fully-functional demonstration network in the heart of Auckland CBD, New
Zealand. The demonstration network was completed in May 2002
For cash-strapped operators, this may be the way to deliver on the promise of always-on mobile broadband. In Europe, several operators have already announced that they cannot build out the 3G networks. Sonera (Finland) recently wrote off $3.92 billion Euros worth of failed 3G investments and closed down its 3G joint venture with Telefonica in Germany. The Finnish minister of transport and communications even asked Germany to return the fees paid by operators, such as Sonera, who wish to return their 3G licenses. Other operators, such as Vodafone in Sweden, are having trouble meeting 3G roll-out schedules because of difficulties in obtaining radio mast building permits.
The RoamAD network resolves these problems because it costs less to build out and circumvents serious regulatory issues because it does not require the construction of radio masts. Despite the obvious benefits of this new technology, operators may be reluctant to embrace it because it has the potential to turn the entire telecommunications world upside down.
With RoamAD’s technology available to anyone today, former state-owned monopoly telcos that still dominate fixed line and mobile phone services in many countries, with their layers of inefficient management and hundreds of employees, will face new, leaner competitors that can deliver the same services at lower cost. Companies, local government agencies or groups of ISPs can build a city-wide RoamAD wireless network for data traffic and phone calls, and offer consumers far lower rates than those charged today by the operators for voice and data traffic. Moreover, because the spectrum in which the network operates (the 2.4 GHz range) is unlicensed, these new competitors need not buy expensive licenses.
Today’s discussion over wireless networks focuses on hotspots, for instance, Starbucks’s announcement that it would offer wireless broadband connections in thousands of its cafés. RoamAD’s technology goes way beyond hotspots. The company has already turned the central business district of Auckland, New Zealand, an area of three square kilometers, into one giant hotspot. And that’s only the first stage. No matter where you are within the RoamAD network in Auckland (which soon will cover over 100 square kilometers), you can surf the Internet, send and receive data, at speeds approaching that of broadband Internet access, and at a far lower cost than what carriers charge for a GPRS connection. There is no need to buy new hardware. Users can do all this with existing devices (laptops, PDAs) equipped with 802.11b PCMCIA cards. Users can also make and receive phone calls with a plug-in headset or through the laptop’s speaker and microphone, via the network’s VoIP capabilities, bypassing the local wired loop.
But what about security? Paul Stoddart, CEO of RoamAD, says that the company has addressed this issue by requiring each user on the network to have a valid MAC (media access control) address and matching login and password, and ensuring that all data sent and received is encrypted using IPsec (IPsec means “Internet Protocol Security” and is a developing standard for security. The purpose is to encrypt and authenticate at the IP (host-to-host) level; SSL secures only one application socket; SSH secures only a login; PGP secures only a specified file or message; IPsec encrypts everything between two hosts).
Despite having delivered what may be the final blow to dozens of shaky telcos around the world, RoamAD is modest about what it has accomplished. Martyn Levy, chairman of the company, plays down the broad implications of their technology and maintains that RoamAD’s cellular Wi-Fi networks compliment the 3G offering. Maybe it’s because the company does not want to step on too many toes (it is looking for partners among the operators). Maybe they’re just a bunch of modest guys. Still, anyone who reads about what their technology delivers today in Auckland, can’t help but be impressed and shocked.
What does this all mean? When will you find a RoamAD network in your city? This depends on whether the operators dare to adopt RoamAD’s technology in place of their 3G plans. Building such a network will make operators look foolish at first since they paid exorbitant amounts for the 3G licenses. However, it might be the wiser alternative, considering that others may rush in and use the wireless opportunity to take over significant parts of the operator’s business.
No matter who builds out the network, the consumer wins. The price of voice and data communications will drop significantly as competition intensifies. People who have slow dial-up connections will soon have always-on, flat-fee, ADSL-quality, wireless Internet access. Phone calls, long distance and mobile, using VoIP, will become a lot cheaper.
For sparsely populated areas with no broadband service, RoamAD’s technology could just be the thing that brings the Internet to millions of people. This is very appealing to less developed countries and regions that are trying to attract IT businesses and develop a home-grown IT industry.
Despite the obvious benefits, it might be too ambitious to expect the operators to adopt RoamAD’s technology within the short term. However, they may have no choice.
About the Author
Esme is an intellectual property lawyer and managing director of Lemon Cloud
BV, a legal consulting firm to technology-based companies worldwide, with
headquarters in Amsterdam. Se's a gadget freak and in her spare time, Esme writes
technology-related articles and travel pieces. She obtained a law degree from
Harvard Law School, as well as a masters in science in Chemistry from UCLA,
and a BA in Chemistry from UC Santa Cruz. For information about Lemon Cloud,
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