Business Profile: the Swedish company making mobile calls free

In the first of a new fortnightly series, Jonathan Ward takes a look at an innovative Swedish company. This week - TerraNet, which promises to bring about the operator-free mobile.

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What is TerraNet?

It's a young, independent Swedish telecommunications company from Lund that aims to use 'peer-to-peer' networking to make it possible to call without an operator, revolutionizing the way telecommunications is run.

History

Founder Anders Carlius came up with the idea in 2004 while on safari in Tanzania, after he found he couldn't call friends who were standing just a few metres away. He realized that the cost of infrastructure had left rural areas isolated from the mobile world.

The sales pitch

Simply that we do not need to pay large amounts of money for operators to run our wireless communications. The attraction of the idea lies in its simplicity: instead of calling via an operator, you use what is known as 'peer-to-peer' networking, in short, using the phones themselves as both transmitters and receivers, cutting out the need for masts.

Each phone can reach any other within 1km, with free calls and texts. A call jumps from one phone to the other to get to phones further away, making each phone part of a network.

The really clever part is that calls can also be made outside this network. All that's needed is a computer with internet access within 1 kilometre of a TerraNet phone. The computer, equipped with a 'dongle' plugged into its USB port, allows users to make free VoIP calls (like Skype) to users in other TerraNet networks, and low cost calls to other normal phones.

TerraNet's innovation also allows for devices other than phones to be connected together, such as hand-held organizers in a company.

The company is performing extensive testing of it handsets and networks in the field, with a commercial network being planned for 2008.

Future

There is extensive interest in their work, and TerraNet has received attention from international media including the BBC.

The attraction is clear: the flexibility and low cost of the system could be a real lifeline for rural areas in developing countries, and for creating emergency networks for disaster relief. There are many recent examples where such a system could have had a real impact. But in the long term, the technology could also be attractive in western countries.

If the field tests are successful, (there were reportedly a few problems with the number of frequencies needed), not only can the licence to the technology be sold, but also the handsets needed for the system to work.

According to the company itself, many phone manufacturers have been nervous about getting involved - mobile operators are their major customers, and it's the operators who stand to lose out. The company is therefore making its own telephones and initially focusing on countries without active mobile operators.

Developments in the world economy could affect TerraNet like any company, but their low-risk, cost-cutting solution may prove attractive, even in the event of a slump. A company to keep an eye on over the next year.

Jonathan Ward