Is this the answer for rural broadband?

Stuart Corner
Monday, 20 March 2006 17:08

Business IT - Technology

The New Zealand developer of a proprietary broadband wireless mesh technology believes it could find ready application in Australia providing high bandwidth services in rural, or urban areas at much lower cost than current technologies.

The company behind the technology, Indranet, has been developing it for a number or years and previously announced large-scale commercial rollouts have all failed to materialise through lack of capital In its latest move to take the technology commercial an associated company, IT Mainland is seeking $NZ5 million to build a full commercial network in Christchurch and Ashburton County.

The Indranet technology consists only of customer premises devices which act as both the users' interface to the wireless network and as nodes in a wide area wireless network. Traffic is routed among the nodes until it reaches one with an external connection to the Internet.

Mesh networks based on the IEEE 802.11 standard are widely deployed in hundreds of US cities, primarily to create a wide area WiFi 'hotspot' for use by local government agencies and in some cases the general public. The IEEE is now close to finalising a standard for wireless meshing. Indranet, however believes its technology has an edge in terms of deployment cost and bandwidth.

Indranet chairman, Russell Fitts, told iTWire that with demand for highspeed bandwidth soaring there was a clear need for a new approach. "The older networks are not able to deliver broadband at a price most people can afford. There is an urgent need for a new type of network."

He said that once IT Mainland had build a demonstrable commercial network "we will certainly be able to raise more capital once people can see how quickly and cheaply these networks can be deployed compared to other networks."

In its investment statement and offer of shares, IT Mainland says that it expects the average cost per user of the CPE costs to be $NZ1000 per year, including equipment and overheads, and returns to be $NZ1200. It believes there is a potential market in New Zealand's South Island for 300,000 units, 170,000 in Christchurch and aims to capture 25 percent of this market within five years.

Its share offer would put 59 percent of IT Mainland in public hands, leaving Indranet with 28 percent and the founding investors in IT Mainland 13 percent. The offer closes on 31 March.

Fitts told iTWire: "I doubt if we will get $5 million, but the offer has been well supported by Indranet shareholders who understand mesh networks and have an affiliation with them.

"However, we will have sufficient funds to deploy our networks in Christchurch and Ashburton County and use those as a stepping stone."

He is very keen to develop opportunities in Australia where he believes the market to be well suited to the Indranet technology. A small trial at Varsity Lakes in Queensland has been completed but announcement for much larger commercial rollouts have so far come to nothing.

"We can rollout rural networks very cheaply and very efficiently," Fitts claimed. "We are very keen to do that over the next six months and we have been doing a lot of groundwork [in Australia] but we cannot spread ourselves too thinly and it has been important to demonstrate the commercial model [in Christchurch].

'We know there are huge opportunities in Australia and we expect the progress we have been making here [in Christchurch] will enable us to form business relationships. We are very keen to meet people who are interesting in doing that with us.

www.indranet.co.nz   www.it-mainland.co.nz