Networker: Modernising

January 26, 2000


Networker: Modernising

Today ships are criss-crossing the oceans of the world, laying fibre-optic cables to meet the expected gigantic demand for communication services in the early decades of this century. New networks in the United States and Europe are being installed which can carry trillions of pieces of information across each segment every second.

Recently, some marketeers have noticed that there are areas of the world which have virtually no such services whatsoever. For much of the Third World, the 20th century telecommunications revolution never arrived. Now the cost of providing many of these services is rapidly approaching zero and some smart entrepreneurs figure that they might be able to make money in even the poorest countries.

But what is the most appropriate telecommunication technology for these countries? At present the marketeers' answer is leaning heavily towards some sort of mobile telephone solution. Cynics may see a connection to an October 1999 report by a health research group, funded by the US mobile phone industry, which finally admitted strong evidence linking cell phones to brain cancer. That sort of problem often precedes the exile of technology to the Third World.

There are two fundamentally different approaches to mobile telephony. First is an extremely expensive satellite-based system. The bankruptcy of two of the major players in this field in the last few months gives an idea of its complexity.

The second, and the one most people are familiar with, is based on a central land-based point communicating with each individual mobile telephone. In order to provide enough users with good coverage and little interference between nearby areas, a system of small "cells" is used.

A cell may cover one or a few city blocks. Each cell has its own transmission equipment, and there could be dozens of cells within a particular city. Each mobile phone carrier has its own network of cells.

It starts to get complicated when people move from one cell to another during the same telephone conversation, and there are issues involved in tracking each user. But the approach is understood and is up to its third generation (analog, GSM, CDMA).

To set up a network you stick transmission equipment at some points around a city, link them to a base station and then anyone with a handset in the city is linked to the world telephone network. No laying of cables, no digging of trenches, no expensive implementation of a large number of house-based connections.

On the face of it this is pretty straightforward. But then things start to get a bit more complex. Those lower technology functions, such as manufacturing copper cable and laying it to houses, were (theoretically at least) within the ability of Third World countries. In contrast, the integrated circuit technology used for current mobile phones is beyond the capacity of all but a few dozen countries today.

There is a completely separate and non-technical problem. The first recipients of phone connections in a town would likely be the military and police, other government offices and the local elite. But at least the phone connections were there in times of emergency. Now the same people are the first to get mobile handsets but when they travel the phones go with them.

Perhaps the most attractive aspect of mobile phone systems for investors is the ability to simply remove almost all the investment if it doesn't turn a profit. You can't easily rip out telephone exchanges and installed cables, but with a mobile system you can just turn up with a truck, unbolt the transmission gear, load up the base station, and move out. A mobile phone system for mobile capital.

By Greg Harris

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