From the land of Skype, Kazaa, and other innovations come another potential market disrupting technology: peer-to-peer wireless networks. TerraNet in Lund, Sweden built a system for free local wireless calls, free texting, and long distance VoIP calls. The disruptive part is that the system does not rely on relaying each call through a carrier's base station. They utilize a peer-to-peer protocol over a wireless medium to communicate directly with another phone up to two kilometers away. We use to call these systems walkie-talkies.
The difference with the TerraNet system is that they can use other phones as relay stations to reach their destination without going through a base station. Each call can travel up to 7 hops to reach its destination giving a maximum reach of about 20 kilometers. If there is a TerraNet USB dongle within that 20 km diameter, callers can make phone calls to phones on the PSTN. The dongle plugs into a computer or router that has Internet access creating a self-organizing mesh network with wireline connectivity.
The fact that users do not rely on a carrier's radio access network is a disruptive concept that traditional carriers will likely have a hard time embracing. Traditional wireless carriers typically have every call or datagram travel through one of their base stations so they can charge for the service. Peer-to-peer calls would be free, but that is not different than the plans that Verizon, AT&T, Sprint, and T-Mobile offer now for calling phones on their network. My plan with Sprint includes unlimited calling to other Sprint users.
I recently took a road trip in two cars with my family. My wife and I brought our cell phones and two-way radios to handle our drive through that wireless wasteland in western Nebraska. We made extensive use of the two-way radios the whole trip because of the reliability and convenience. We had a range of about 2 km just like the TerraNet system. With wireless peer-to-peer built into our cell phones, we would have not needed the walkie-talkies especially with at PTT feature. If there were other users in range maybe we could have reached the PSTN on occasion; thereby, generating revenue for Sprint. I see great value to traditional and non-traditional wireless carriers with this technology.
The benefit to a traditional wireless carrier is increased coverage in areas with marginal signal strength. The big 4 wireless carriers all show excellent coverage at my home, but the reality is marginal coverage at best. I frequently miss and drop calls while receiving text messages and voicemail notifications. I always return them by land line because I cannot rely on sufficient call quality or even a connection. Just think if I could leverage the better coverage of other nearby Sprint customers. My cell phone would almost always work at home. If they allowed me to install a dongle in my home network, then I would always have excellent coverage. T-Mobile is already doing this for their customers.
Bidders in the 700 MHz C-block of spectrum could differentiate their service with this technology and get a deployment boost. First it would allow them to quickly increase coverage without a massive radio access network deployment. They could offer customers a phone and USB dongle to augment their radio access network. Secondly they could reduce the cost of operating the network by relying on customer's Internet connections for completing calls to the PSTN or distant users. Finally, Apple could include the technology in their iPhones to share chat sessions, music and video between other iPhones without relying on Wi-Fi connectivity. My guess is that integrating iChat with iTunes would go over better than Zune's implementation. Imagine distributing movies to Apple TV users by copying pieces from your neighbors' boxes. Multi-player role playing games can be organized into teams from only point-to-point connections. The applications are endless.
TerraNet has not announced any partners or customers yet, so their traction remains to be seen. As long as wireless carriers are open-minded about the peer-to-peer aspect of the technology, this company has an extremely bright future. In Europe and other places where handsets are unlocked, TerraNet does not need to rely on the carriers just the handset manufacturers. In the U.S. market, carrier acceptance is a must. There is still the opportunity to work with bidders of the 700 MHz spectrum to provide a truly disruptive wireless service. Let's see who has the vision.