Mauro Calvi : WLANS in Developing Countires

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WLANS in Developing Countires

How Wireless LAN technology is bringing the Internet to the poor

Mauro Calvi - Social Trends - April 2003

While stuck in traffic in downtown Guadalajara, Mexico, during a recent business trip, I noticed the LED indicator on my handheld computer was flickering. Though this section of the Mexican city is not what I would consider a state-of-the art business district, what my Hewlett-Packard Jornada was telling me was unequivocal: I had come across one of the thousands of wireless LAN public hotspots being deployed every day around the globe.

I was unexpectedly connected to the Internet at the surprising speed of 11 megabits per second, the same connection speed I have in my office back in Menlo Park, CA, and certainly faster than my DSL service at home. More interestingly, I had no idea who was providing me with the service or why I was not being charged a cent for that privilege. I asked the taxi driver to pull over so I could check my email.

Also known as Wi-Fi, or 802.11, Wireless Local Area Networks (WLANs) are an unexpected byproduct of a well-meaning government initiative. In 1989, the Federal Communications Commission assigned the 2.4- and 5-Gigahertz frequency bands to short-range industrial, scientific and medical applications. The purpose of the so-called ISM spectrum was to enable industrial, medical and scientific instruments to share data wirelessly without having to apply for a government license. The only restriction: the power of the radio was to be limited to one Watt in order to minimize radio interference, a power level sufficient to cover an area about 200 mt. in radius. Most Western governments followed suit and adopted similar rules.

What these regulatory bodies did not anticipate was the landslide phenomenon that the free ISM spectrum would set in motion. Entrepreneurs, always eager to satisfy corporations’ need for increased workforce mobility, were quick to realize that WLANs provided a huge business opportunity.

Soon, hundreds of companies began to churn out WLAN equipment. Today, with a $50 card in your laptop, you can access the Internet at high speed from your office, home, and thousands of places providing Wireless LAN access. In 1999, an independent body named WECA was formed and chartered with ensuring that the 802.11 standard would become truly universal.

Research firm Dataquest expects that more than half of all computers sold to enterprises will have built-in WLAN capabilities by 2006. Cell phones will soon include 802.11 support, allowing voice, and not just data, to travel over WLANs when inside an office or at home. 30 million multi-mode wireless chips for access points, laptops and Personal Digital Assistants (PDA) will be shipped next year, and 100 million over the next 3 years.

Wireless LANs are arguably the most remarkable innovation since the advent of personal computers in the 1980s and the Internet in the ‘90s, making this sector one of the few bright spots in an otherwise depressed Information Technology market.

Unintended consequences

The adoption of WLANs went well beyond the intended scope of the ISM standard: today schools, universities, hotels, airport, restaurants, cafes, gas station, theatres, shopping malls, not to mention millions of homes, have become wireless “hotspots”, or places where wireless Internet access is available.

At the hub of every hotspot is a $50-$200 device the size of a desktop telephone set, called an Access Point. The AP’s radio signal covers an area of approximately 200 meters in radius and is connected to a wired network (such as a DSL line or other high-speed link). Most homes use a single AP, while a typical 200-employee office would need a maximum of 4-5 APs.

In their most advanced versions, APs do not require a fixed connection to the network: they can simply communicate with the nearest AP by radio, which in turn connects to another neighboring AP, and eventually to an AP with a wired connection to the backbone. These wireless “routers” form a web of hotspots also known as a “mesh” network. If equipped with directional antennas, Access Points can communicate over tens of miles without violating the legal requirements regarding maximum radio power, or requiring a government license.

The important benefit of mesh networks is to provide high-speed Internet connectivity over a wide geographical area where no wire-line infrastructure is present. Thanks to Voice-Over-the-Internet technology and to the advent of WLAN-enabled cell phones, this network can be used to carry voice traffic, thus eliminating the need to deploy a traditional cellular network. Again, since they use an unregulated portion of the radio spectrum, WLANs do not require cumbersome licensing application processes or paying costly fees.

Bridging the digital divide

By far the most fascinating impact of WLAN technology is its potential to bring low-cost connectivity to the developing world, particularly in rural areas, where the investments required to develop traditional wire-line networks can be prohibitive.

Entrepreneurs, governments and charitable institutions around the world have not failed to take notice: from China to Madagascar, from Peru to the Philippines, not a month goes by without the announcement of another village being connected to the Internet.

What makes WLAN technology so promising as a tool to bridge the digital divide are a number of factors, including:

• The high level of standardization and the huge economies of scale of WLAN hardware manufacturing have rendered the cost of basic equipment orders of magnitude lower than previously existing wireless technologies

• The cost of international satellite Internet connections has dropped almost 70% in the last five years as a result of competition from fiber networks and the global slump in demand for communications services. Satellite links are still the primary way of connecting remote rural areas to the Internet backbone

• WLANs can be used to bring Internet and voice service where deploying millions of miles of copper cable or optic fiber to every office and building would be cost-prohibitive

• Many countries granted the same unlicensed status to the WLAN radio spectrum as the US. This has further reduced the capital investment required to create a network, as well as opened up the field to a multitude of less politically connected players.

• The cost of solar cells needed to power WLAN equipment in rural areas without access to grid power has recently dropped by 50%.
• Most important, rather than being financed by one or a few private companies, the cost of creating and managing the network is distributed among a multitude of participants. Central to the success of mesh WLANs is the fact that, by buying and operating their own wireless equipment to connect their offices or homes, end-users themselves finance and own portions of the network. It is only through this collective investment model that the huge capital needed to connect the 50% of the world population living in rural areas can be made available.

The typical rural village set-up comprises a satellite station providing a connection to the Internet backbone. The connection is shared among the community through a local wireless network connecting a number of buildings. The set-up requires an initial investment not greater than $20,000 for the satellite base station equipment, plus a few hundred dollars for each wireless station (typically the school, a government office, electric and water utilities and businesses). The lease of the international satellite channel represents in most cases the largest financial commitment for the community, ranging anywhere from $500 to $2000 a month for a channel serving tens of simultaneous users.

Email, market prices and government applications

Following are just a few examples of how wireless connectivity is being used to the benefit of the have-nots in developing countries:

• Infocentros, a Latin American variation of the Internet kiosk, are appearing in many Latin American countries, providing local entrepreneurs with the ability to sell access to email and market information on the Web, often in partnership with local micro-financing institutions. Email appears to be much in demand among the millions of Latin Americans with relatives overseas, quickly replacing traditional mail. The local entrepreneurs will often deliver email printouts directly to the home, sometimes helping the illiterate by reading the content to them. Electronic remittances from overseas relatives over the Internet are also gaining momentum, as they are significantly less expensive than traditional bank-wire services. Farmers and fishermen are using international commodity pricing information to negotiate more effectively with wholesale buyers.
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• The government of the Indian state of Andhra Pradesh is setting up government Internet kiosks in urban villages in hope of bringing what they refer to as “electronic government” to the people. The initiative is aimed at bypassing the local bureaucracies and expediting the processing of government applications. The Indian government has also recently announced a plan to bring fiber into thousands of villages by the end of 2005, and using wireless LANs to connect homes and businesses to the fiber termination point in the village.

• A village in Laos has recently been awarded a charitable foundation grant to set up a wireless network. Given the lack of an electricity grid and the difficulty in using solar power in the middle of the jungle, the village will use a generator powered by a bicycle and a number of enthusiastic villagers.

• Wireless ISPs (WISPs) are setting up shop in Egypt, Eastern Europe, Malaysia and many other locations, connecting homes and business using commercial equipment. Because of the highly standardized nature of the WLAN equipment, a wealth of information is available on the Internet, making it easier for these local entrepreneurs to develop the necessary know-how.

• A small Utility Management company in Kenya is considering using wireless LANs to connect electricity and water meters in a number of cities and villages.

• Government and non-government Relief Organizations, such as the World Food Programme, are studying the feasibility of transitioning their costly emergency response telecommunications equipment to local authorities and commercial WLAN infrastructure

• Even in highly developed economies such as the US, charitable foundations and non-government organizations are turning to WLANs to provide Internet access to under-served communities in rural areas. For instance, libraries and schools in Indian reservations around the US are being linked to the Internet by satellite and WLANs.

Is the model sustainable?

Are Wireless LANs the key to economic prosperity for struggling developing economies? Perhaps, but some fundamental issues suggest that caution is in order:

• Quality of service and security: Who will control and manage networks that are by definition owned by millions of individuals and enterprises? Who will manage radio interference in an unregulated market? Who will guarantee the right level of data security, privacy, and quality of service in a shared network model?

• Government regulation: Will governments in developing countries allow WLAN networks to operate without licenses? Will they resist the temptation to regulate the frequency spectrum, or will they cave in to the pressure of local telecommunications companies wanting to capitalize on their past investments and preserve their monopolies?

• Business model: What successful economic model will drive the proliferation of WLANs? Do rural consumers and businesses in developing nations have the purchasing power to support the ongoing costs of operating the networks?

There are encouraging signs: companies around the world are working to improve the service quality and security of these highly complex, highly decentralized, self-configuring and self-adapting networks. Countries like India and the Philippines have recently announced liberal policies regarding the use of WLAN frequency spectrum, and many other forward-looking governments, particularly in Asia, are following a similar approach.

The history of personal computers and the Internet also shows that when a new technology enjoys such quick and widespread adoption thanks to the compelling benefits it brings to businesses and consumers, those that try to stop the phenomenon will most likely be pushed to the wayside.

Last, but not least, remarkable examples of entrepreneurial success in impoverished areas, such as Grameen Telecom in Bangladesh [1], are demonstrating that one can indeed create profitable telecommunications services even where few people believed it was possible.

Mauro Calvi is Vice President of Business Development at CGNET Services International, in Menlo Park, CA, a company specializing in connectivity solutions for humanitarian, Digital Divide, biodiversity and Emergency Response applications. He has published and lectured on the subject of wireless wide-area networks. His career includes a number of management positions at Microsoft, Ashton-Tate and other Information Technology companies.

Additional resources:

[1] “What works: serving the poor profitably” C.K. Prahalad, Allen Hammond – World Resources Institute, Digital Dividend (http://www.digitaldividend.org/pdf/serving_profitably.pdf)

[2] “Spanning the Digital Divide: Understanding and Tackling the Issues.” bridges.org, June 2001 (http://www.bridges.org/spanning/index.html).

[3] “The Global Information Technology Report 2001-2002: Readiness for the Networked World.” Geoffrey Kirkman, Managing Editor. Oxford University Press, March 2002 (http://www.cid.harvard.edu/cr/gitrr_030202.html).