Britain's Rural Broadband Entrepreneur

By Gerry Blackwell

April 30, 2004

The new company Telabria hopes to blanket the 25 percent of the United Kingdom that can't go online using high-speed, mesh-based Wi-Fi.

After ten years in Silicon Valley, British-born high-tech entrepreneur Jim Baker felt a yearning for his home land. Last year he moved his family back to "deepest, darkest" Kent, a green and pleasant shire in southeast England.

There Baker ran into a slight snag. He discovered it was virtually impossible to get broadband Internet access in the rural retreat he had chosen near the cathedral city of Canterbury.

So despite his vow to take some time off from entrepreneuring, Baker ended up launching another company. Telabria will provide high-speed Internet access to rural communities in Britain using Wi-Fi-based mesh network technology.

The company launched commercial service in its first three markets last month after four months of successful market trials in Kent.

"I looked into various [broadband] options," Baker says, "and in the end I realized there were huge parts of the UK that could not get broadband at all. And that is basically how this company evolved. I recognized there was a tremendous business opportunity here."

A few small companies in the UK had already launched Wi-Fi-based rural broadband Internet services. Most, like Shere Broadband, in nearby Surrey, are community-oriented projects headed by enthusiasts. Baker has something more in mind.

"Telabria is being built to be a sustainable nationwide business for delivering service to rural communities," he says. "With a fully supported back end and a variety of value-add services, including voice over IP and others that leverage the wireless infrastructure."

How big a business could Telabria be? Significant, Baker says -- and he is nothing if not well researched.

Rural folk, he points out, rely on high-speed access-- when they can get it -- almost as much as their city cousins. Rural ISPs in the U.S. have discovered the same thing. Baker cites a study showing that 45 percent of rural broadband subscribers report using their service regularly versus 47 percent in the city.

We may think of England as a compact, densely populated, highly urbanized country, but 25 percent of the population still lives in small towns and rural areas. According to Baker's research, only 51 percent of the population in towns has access to broadband service, 16 percent in rural villages and four percent in remote rural areas.

Part of this has to do with the speed with which telco British Telecom (BT) is converting central offices (COs) to enable them to provide ADSL service. Baker cites one report estimating that there are currently over 500,000 "latent" broadband subscribers waiting for DSL service in unserved areas -- representing revenues of $280 million a year.

Even if all the regions on BT's roadmap for enabling DSL service reached the economic trigger points the company uses to justify spending $360,000 on a CO conversion, about 3 percent of the British population would still be left unserved because they're too far from the central office, Baker points out.

That percentage represents 720,000 households, an annual $400-million market.

Telabria isn't counting on just the leavings of the wireline telecom industry, though. Baker believes wireless has reached a level of maturity where it can compete on a more than equal footing with wireline services.

"We see wireless as having significant advantages over fixed wire," he says. "Especially with the advent of nomadic services that allow users to roam within wireless zones rather than being tied to a cable. We're looking at how to deliver a whole range of services that will be significantly better than what fixed-line ADSL can offer."

It's also now possible to offer very reliable service with wireless, and that will win customer loyalty. Baker says he has asked users in his test markets what there reaction would be if BT launched DSL service in their area -- as it might in some cases within six months. They said they would stick with Telabria.

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