“White Space” digital dividend to boost M2M and rural broadband

The machine to machine (M2M) market is already comprised of a number of wireless technologies that come together to deliver the final product: for long-haul traffic you have 2G, 3G and most recently 4G technologies; for local connections, Bluetooth, WiFi, Zigbee and other technologies play their role. In the future, spectrum which has been freed up from digital TV switchover - dubbed “white space” - could become one more important M2M technology. There are several advantages of using white space in this regards. First, it is unlicensed, meaning that it is essentially free to use and it uses a royalty free, open standard; second it is cheap; and third, the use of low-bandwidth means that batteries last for 15 years, ideal for M2M use-cases such as smart metering. The fact that it is cheap could be the most important factor. The 'Bill of Materials' is less than $5 in 2012, going down to a $1 chipset by 2014. The pricing of 2G and 3G modules has been going down but chipsets still cost much more than that, typically around the $10 mark for 2G chipsets and perhaps three times that for 3G. Neul, a Cambridge UK company which is still in the start-up stage, plans to target several M2M use-cases such as monitoring passenger vehicles, tracking goods on the move, traffic management and delivering electronic content to the host of devices in the consumer market such as tablets and eReaders. Outside the M2M space, delivering rural broadband could make the company extremely popular for those living in areas where they cannot access broadband. From a technology point of view, base stations with a similar power output to a mobile phone can deliver 10km range and a data rate of up to 16Mbps- that is an improvement on ADSL where capacity begins to reduce after about 6 kiilometres. Importantly, the investment community also believes in the prospect of using white space to plug the gaps in M2M and rural broadband. Venture capitalists DFJ Esprit, IQ Capital, and Cambridge Angels are all backing Neul and Neul’s Chairman Charles Cotton is an experienced director of public companies listed on Nasdaq, Euronext and the LSE.