Home Asia-Pacific I 2005 Wireless internet access as the key to knowledge-based growth and economic prosperity

Wireless internet access as the key to knowledge-based growth and economic prosperity

by david.nunes
Thomas A. FreeburgIssue:Asia-Pacific I 2005
Article no.:11
Topic:Wireless internet access as the key to knowledge-based growth and economic prosperity
Author:Thomas A. Freeburg
Title:Chief Operating Officer and Director of Strategy
PDF size:44KB

About author

Thomas A Freeburg is Chief Operating Officer and Director of MemoryLink. Mr Freeburg is one of the foremost experts in broadband Internet, particularly in the area of unlicensed wireless platforms. He has 60 US Patents and more than 120 published papers. With one eye on today and one eye on tomorrow, he rallies 39 years of experience at Motorola, where he served as Corporate Vice President, Chief Futurist and Director of Technology. Mr Freeburg earned a BSEE from Bradley University and a MSEE from the Illinois Institute of Technology.

Article abstract

A World Bank study showed that giving a small farmer a telephone could double his income. The Internet gives that advantage to all occupations. Internet penetration in North America is 60 per cent; in Asia Pacific, penetration is only six per cent. Nearly two billion additional Internet connections are needed for Asia-Pacific to reach North American penetration levels. Wireless—operating in unlicensed frequency bands, with per dwelling capital investments as low as US$9—is the only economical way to provide such widespread connectivity.

Full Article

Emerging technology in the Asia Pacific region is much like a gigantic field of flowers about to burst into full bloom. Imagine a field where a handful of these flowers are already providing a glimpse of their beautiful colours; we see much of the same in our view of the region’s economic and social landscape—a future that will advance dramatically as communications technologies unfold. Information and communications—knowledge-based power—is increasingly recognised as the key enabler in promoting growth, creating jobs and improving life, for both developed and developing nations. Access to information and knowledge stimulates economic growth by creating new products, increasing productivity and promoting new commercial and administrative methods. A decade ago, a study by the World Bank sought to rank industrial applications against investment priorities in Asia-Pacific’s emerging nations. The study pointed to a union between agriculture and telephony; by giving a small farmer a telephone, one could expect to double his income! The Internet and its associated applications extend that principle to all occupations that have a knowledge-based component. In Asia Pacific, as in many other parts of the world today, communication connectivity is made up of three broad, yet distinct groups: entertainment, classical telephony and the Internet. Entertainment in the form of radio and television is typically one-way, over-the-air broadcasting. The balance of the entertainment market is shared by cable and satellite. Over-the-air broadcasting has maintained a major presence in Asia Pacific for a long time. Initially subsidised by the respective governments, over-the-air broadcasting also has been regulated substantially. In the meantime, cable and satellite are becoming more and more important and are gaining new ground. Classical telephony has two groups: wired and cellular, both of which are true network technologies because they provide for two-way communication. In Asia Pacific as in most other parts of the world, a large percentage of the wired telephony networks continue as monopolies and considering the economics of installing new wire, it is easy to see why a second wired network would be difficult or even impossible to build. The cellular side of the scale is balanced by privatisation and competition—lots of competition. Twenty years after the breakup of the world’s largest communications monopoly—American Telephone and Telegraph—many consumers in the US have no fewer than eight distinct sources of wired and wireless telecommunications services available to them and at historically low prices. Also today a huge number of competing Internet Protocol (IP) carriers have become telephony players connecting customers via cable, fibre, telephone wireline-based DSL or dial-up. Finally, there is the Internet, which is dramatically different from either the entertainment group or classical telephony. Both the entertainment and classical telephony models house vast amounts of network intelligence within the networks themselves. Devices void of intelligence—televisions and telephones, for example—are placed at the outer edges. The Internet’s intelligence, on the other hand, is situated at the extreme outer edges of the network. The network, in fact, offers no intelligence whatsoever, a key differentiator structurally and a significant underpinning for supporting the Internet’s continued global proliferation. The borders of the Internet are as unique as they are diversified. They are fashioned from copper twisted pairs for dialup, Digital Subscriber Line (DSL) over twisted pairs, high-speed fibre, Multipoint Microwave Distribution System (MMDS) satellite, cellular, broadband over cable, or wireless broadband, both licensed and unlicensed. In short, the Internet has become the undisputed master of network interconnectivity. Given the diverse nature of its interconnectivity, with all that intelligence spread out along the outer edges of its network, the Internet offers the lowest barrier to entry of any communications technology. Combined with man’s insatiable appetite for information, it is extremely easy to see why the Internet has grown at such a rapid rate and to such mammoth proportions. Technologies that use wire, cable and fibre are destined to remain as integral parts of the communications technology mix, but most likely will never again experience the growth rates they once did. These types of networks are least likely to see substantial new growth, due to the high cost of installation. In Asia-Pacific, just as in Europe or the Americas, it is not unusual to incur an average near-urban installation cost of US$3,000 for every dwelling passed, even before the dwelling itself is connected to the network. In urban areas, though population density is greater and suggests increased economies of scale, the costs are typically higher. In rural areas, an obvious lack of population density fails to justify the substantial capital investment required for wired or fibre network expansion. For Asia-Pacific’s communication and information technology to advance throughout the region at a rate commensurate with its growing appetite for knowledge and information, affordability is paramount—both for the provider and the subscriber. An unlicensed wireless approach—wireless that operates in frequency bands that can be used without licensing—provides the only reasonable solution, especially when the typical near-urban, per-dwelling capital investment can be as low as US$9. Beyond capital expense, modern equipment deployments associated with unlicensed wireless require minimal intersystem coordination, which in turn helps minimise planning and management. While there has been much discussion about back office efficiencies such as billing, the fact is that a back office operation in an unlicensed wireless setting plays a minor role at most. The unlicensed wireless approach to last-mile delivery of the Internet strongly suggests a new economy of scale. Yet the economic reality actually is a diseconomy of scale—the most cost-efficient wireless Internet network is one that serves a few hundred to a few thousand dwellings. Networks of this size operating in a typical near-urban environment can be profitable even where some neighbourhoods have market penetrations as low as two or three per cent. Unlike wired networks burdened with US$3,000-per-dwelling capital investments, their unlicensed wireless counterparts do not have to get every person in every dwelling to sign up for service. Asia-Pacific’s insatiable appetite for information and knowledge, just like the flowers preparing to burst into full colour, forms the basis for all kinds of new opportunities, as well as new challenges. On one side is the requirement for network expansion so that more people throughout the region have access to the Internet. On the other side is the bandwidth requirement. As demand for more content and new, more complex applications grows, so does the challenge to ensure that enough bandwidth is available to deliver all of what people want—to all of the people who want it. Around the world today there are more than 600 million Internet users. The largest group—some 190 million—is in Europe. The second largest group—187 million—is in Asia Pacific. North America ranks third with 182 million. However, the data paints a much different picture when Internet users are presented as a percentage of population. Across Europe, about 37 per cent of the population has Internet access, whereas in North America, nearly 60 per cent of the population is connected. In contrast, in Asia Pacific the 187 million Internet users account for only six per cent of the region’s total population. If that were to jump suddenly to the level of North America, nearly two billion additional people would require Internet connection! To accommodate effectively Asia Pacific’s hunger for Internet-based knowledge and information, as well as the broadly anticipated increased bandwidth requirements, wireless—specifically in the form of unlicensed wireless broadband—appears to be the only logical approach to a common solution. Not only does wireless broadband use unlicensed spectrum, equipment costs for delivery of the Internet to countless households is minimal. In all likelihood, telecentres—most typically public kiosks with Internet-connected terminals—will begin to appear on street corners throughout most Asia-Pacific urban centres. In near-urban and rural areas, fixed wireless broadband will become the primary means for Internet connectivity. Municipalities are becoming Internet service providers. Emerging economies in particular already recognise the value of the Internet for its ability to promote knowledge-based economic and social growth. The Internet is a tool that promotes literacy and has the ability to help lift a community’s citizenry from poverty. It looks for a growing number of municipalities across the region to provide Internet access to its citizens who yearn for a higher quality of life. Economic growth will accompany and ultimately support these efforts to provide a fertile ground for the rapid expansion of wireless broadband throughout the region. Rapid growth of wireless technology provides the perfect opportunity for a new variety of carrier. As traditional telecom carriers fade into the background, along with their high-cost infrastructures, new entrants such as power utilities, railroads and major real estate developers will use their land holdings and rights-of-way to take advantage of low-cost wireless technology. These new entrants to the communications knowledge-and-information delivery mix are well suited to provide the ‘big pipe’ needed to transport the vast amounts of bandwidth to a growing number of last-mile wireless broadband service providers and their customers. Those who search for the perfect cause-and-effect example need not look beyond the Asia-Pacific region: the cause—mass Internet connectivity—is destined to produce a spectacular effect in the form of individual knowledge and prosperity.

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