Britain’s Rural Broadband Entrepreneur

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.

The company will grow "organically" to meet demonstrated demand,
but Baker says it will be rapid growth. He expects Telabria to have "several
thousand" subscribers within 12 months, probably spread over 100 or more
communities.

The company is currently in the process of converting trial customers to
paying customers in its three test markets. It has additional community implementations
underway, and it has also had "a large number of enquiries [from other
communities] since our public launch."

Telabria’s strategy is to work with county councils (roughly equivalent to
state governments in the U.S.) and borough councils (municipal governments)
to identify communities where there may be sufficient demand for broadband
Internet access to warrant a marketing push.

Telabria is both network operator and service provider so it ultimately markets
to end-user subscribers. It is just about to start a local radio and newspaper
campaign in southeast England to raise the company’s profile. The work with
local councils, however, is vital. "It’s a very valuable partnership,"
Baker says.

The benefit is not all Telabria’s. Many rural regions in Britain want to
revitalize to retain the population they have, attract new people, and most
important, attract businesses. "Bringing broadband in is really helping
with that," Baker says.

Telabria is counting to some extent on pent-up demand in these communities.
Part of its pitch is that if the community can drum up 20 paying subscribers
willing to commit to buying the service, it will provide service – and it
can provision within 30 days.

Another key part of the marketing strategy is to establish hotspots — and
ultimately hot zones — in the communities so that subscribers can use the
service elsewhere than in their homes or businesses.

Telabria worked with Britain’s oldest brewer, Shepherd Neame to establish hotspots
in pubs and hotels it owns in communities where Telabria was trialing the
service. Shepherd Neame, founded in 1698, owns hotels and pubs across southeast
England. Most British brewers own pubs.

"We’re already talking to other brewers that own rural pubs who have
seen what we’ve done with Shepherd Neame," Baker says.

Service at the hotspots is entirely free for now. Baker favors keeping it
free for short-term usage, but possibly charging users beyond a certain time
online.

For the first three communities, the company used satellite for backhaul,
but Telabria is "completely backhaul agnostic," Baker says. "It’s
whatever is most suitable for the community and it’s decided on a community-by-community
basis."

Satellite broadband is suitable when there are only a limited number of subscribers
— 30 to 40. The company will also consider bringing in a dedicated line or
using fixed wireless.

"We think fixed wireless is where the future is," Baker says. "As
that whole market matures with the advent of WiMax and other technologies,
it’s going to play an important role for us."

For the last mile, Telabria is committed, at least for now, to Wi-Fi-based
mesh technology, though it is keeping its options open as far as vendors go.
It used mesh network equipment from WaveWireless (now a P-Com company) for the first three communities.

The "deepest, darkest" characterization is only partly a joke.
England in general and southeast England in particular is topographically
challenging for wireless — lots of low hills and lots of trees and foliage.
Much of the year rural southeast England is almost jungle-like. Mesh is the
best solution available.

"We love mesh," Baker says. "We are seeing huge flexibility
from mesh in rural areas where line of sight is very difficult. We haven’t
had one deployment yet where that hasn’t been an issue — there are no towers
in the country."

"Mesh is also highly scalable and it allows us to get out fast. It’s
been great for us. If the customer has uninterrupted, high quality service,
he doesn’t care what the technology is, it doesn’t matter to him — but it
does matter to us."

Telabria has so far been funded with private money. Baker says it will need
additional outside financing to execute its aggressive business plan. He hopes
he can find it in Britain, though he still has business interests in the U.S.

The company, of course, has proven nothing yet. The next 12 months will tell
the story.

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