Low power GSM operators in the UK are going to drive down the cost of mobile phones for everyone, but businesses will see the benefit first.

The technology - for which Ofcom will issue licences next week - combines the best aspects of licensed radio spectrum such as cellular phones, with license-exempt equipment such as Wi-Fi, according to Martin Wren-Hilton, one of its leading proponents.

"It's a third way between licensed and license exempt spectrum," says Wren-Hilton of Coffee Telecom, whose appointment to Carphone Warehouse should be confirmed shortly. Low-power licences allow many operators to exist in the same spectrum (like Wi-Fi), but because they have a licence agreement, interference will be sorted out (read How GSM pico-cells work)
"If it were uncoordinated there would be chaos," said Wren-Hilton. "We can offer guaranteed quality of service, and the scheme allows many new entrants to the UK mobile phone market."

The wind is changing
Carphone - and the other licence holders announced yesterday by Ofcom - will be able to set up short-range, low-power GSM cells, either in public spaces, in offices or, eventually, in homes.

Businesses will get the cells first, because they are able to bear the cost of installation, and the cells will be installed one-by-one, instead of the nationwide roll-out that a public service would imply, says Wren-Hilton.

This is a change from the public service originally envisaged by his company, Coffee Telecom, where public hotspots provide cheap calls to those with a special SIM card.

Easier to use than we expected
Some commentators are concerned that, though the services are technically possible, they may be fiddly to use: "Does anyone know what happens when a phone's 'network selection' menu has 10+ options shown?," asks Dean Bubley in his blog. "Were the menus even designed to cope with that many, perhaps scrolling onto another page?"

According to Wren-Hilton, the technology is already there to cope with this. "The original Coffee Telecom idea was to use manual selection, but we are more focussed on a fully automatic service now." Users will buy a SIM that includes an application that chooses the most favourable network, he says. The phone will then make calls either over a local GSM station if one is in range, or use a normal cellphone network otherwise (Carphone Warehouse has three MVNO relationships, says Wren-Hilton)

Other big players, including BT and O2 also have licences. Both are likely to use them to extend their existing offerings - for BT it marks their return to being a mobile operator, and could more or less replace the BT Fusion service.

"This has all the advantages of BT Fusion," points out Wren-Hilton, "but you can use any handset."

It has other benefits too: indoor cells will take traffic currently carried by outdoor cells (traffic which they have to handle on full power to reach inside buildings), so the existing mobile networks will become less busy.

Phones connected to a pico-cell will operate at a lower power level, so their battery life will be longer and they will not run so hot.

Better than converged phones?
If services do arrive before the end of the year, they will hit the market while converged GSM/Wi-Fi handsets and services are still scarce or difficult to operate. Even after converged services arrive, low-power GSM will still have many benefits, says Wren-Hilton.

"With low power GSM on the scene, the raison d'etre of dual mode phones goes out the window," he says, conceding that people will still want them for use at hotspots while abroad, or for handling large amounts of data.

Even these caveats are not necessarily there for ever. Low-power GSM pico-cells can handle GPRS data, and even Edge, so Blackberrys will work - in fact, Balckberry users will make big savings in the office, since their devices will connect through the pico-cell directly to the corporate Blackberry server, without going over the public network. "We've been looking into that quite closely," says Wren-Hilton.

And international use could also happen, if regulators in other countries follow the UK's lead. Already one of the operators with a UK low-power licence is from the Philippines, so it is clear that international eyes are on the possibilities of the service.

The rest of Europe has a guard band for DECT, so it could happen there easily. Elsewhere, there are other bits of spectrum which could be given to low power use, some of it within the existing abilities of cellphones. "Low power mobile can go global," says Wren-Hilton. "In most territories there is some spectrum that hasn't been allocated."

Any problems?
There isn't much to say against low-power GSM, but Dean Bubley (actually an enthusiast for the technology) has a go: "It'll probably take longer to get things up and running than everyone expects," warns Bubley. "There will be technical glitches and delays in network rollout, service development and (as always) user experience tuning."

He has one last worry to lob at us - rogue pico-cells could be a security risk, allowing devices to hack into the business network from GSM-connected devices: "Remember the fuss a few years ago when people were plugging 'rogue WiFi access points' into enterprise networks & PCs? Welcome to guerilla wireless v2.0 , only this time with cellular."