Summary:

A GigaOM exclusive: A tiny company you have never heard is about to have an outsized impact on the global mobile industry. Global giant Vodafone is using a technology developed by a small Silicon Valley/Madrid startup called InToTally to supercharge its 3G networks.

Vodafone racecar

A tiny company you have never heard of is about to have an outsized impact on the global mobile industry. Global giant Vodafone plans to use a technology developed by a small  startup called InToTally to supercharge its 3G networks starting in June, GigaOM has learned. InToTally claims once the overhaul is complete, Vodafone’s networks will be able to support 40 percent more capacity: for just the cost of some software, the world’s largest multinational carrier will get the equivalent of nearly half a new network.

What InToTally CEO Alvaro Lopez-Medrano has done is solve the outer loop power control problem of CDMA and UMTS/HSPA networks. If sounds complicated, that’s because it is. But let’s break it down:

CDMA towers and handsets are constantly boosting their power to overcome adverse network conditions. So, say you walk behind a building and your signal strength suddenly drops: the tower antenna boosts its transmission power to maintain your data connection or voice call. Whenever that power boost occurs, your connection may improve, but the connection of everyone else in the cell degrades.

“During this period of so-called variance, you’re introducing interference into the network,” Lopez-Medrano said. “More power means more interference.”

Maintaining that balance between the individual connection and the network as a whole is what CDMA networks are all about, but there’s a fundamental imbalance: while the network is quick to react if there is a connection problem, when that problem goes away it takes several minutes for the network to correct itself and scale back its transmit power to normal levels. Lopez-Medrano likened it a thermostat in your air conditioner. If the temperature falls below 70 degrees, the network blasts cool air, but if the temp is well below 70 to begin with it doesn’t do anything at all.

So what we wind up is a network that at any given moment is blasting high-powered signals to bunch of subscribers that don’t need the extra juice, introducing loads of interference in the process. InToTally has developed algorithms that allows the network to react dynamically to those changing mobile conditions, drawing in power just as quickly as it amplifies it. Think of it as your AC and furnace working in tandem, keeping the network a comfortable 70 degrees at all times, no matter how much the outside temperature fluctuates.

With InToTally’s software in place, a congested CDMA or HSPA cell can boost its capacity by as much as 40 percent, Lopez-Medrano claimed. That additional capacity can manifest itself in many ways: A tower could handle more and better quality calls, for one, but most importantly in the mobile broadband age, the tower can pile on the bandwidth, hosting more data connections while increasing the speed available to each of those connections.

Oh, the damage a smartphone can do

The weird thing is Lopez-Medrano figured out the math in 2002 when he first founded InToTally in Spain. By 2005, he and a team of engineers from Polytechnic University of Madrid had perfected the technology and tried to sell it to infrastructure and handset vendors, but no one was interested, Lopez-Medrano said. 3G networks weren’t really overloaded at the time so their inherent power control faults were overlooked. InToTally, now headquartered in Silicon Valley, had raised $1.25 million from friends and family as well as a few angel investors to develop its technology, but for most of the last decade it just sat on its patents and supported itself by offering consulting services to carriers like Telefonica.  Then along came the iPhone.

The smartphone revolution took a tremendous toll on operators’ 3G networks, prompting the mad dash to LTE we’re witnessing today. While LTE has largely solved those power control problem, 3G networks aren’t going anywhere. Carriers are searching for ways to pack as much capacity into them as possible. So InToTally was finally able to bend a carrier’s ear – and not just any carrier. Vodafone is the largest operator in the world in terms of revenue and hosts 439 million subscribers on multiple continents.

How the Big V will shift the wireless industry

Vodafone has ordered two of its four major infrastructure vendors to begin upgrading their networks in June with software licensed from InToTally. Lopez-Medrano wouldn’t reveal which two, but he said together they account for 30 percent of the base stations Vodafone has deployed worldwide. Meanwhile the startup is negotiating with the remaining two. Vodafone will start in its big European markets — Italy, the U.K. and Spain – and then expand to other countries. Vodafone is also making an equity investment of an undisclosed amount in InToTally.

By upgrading its network base stations, Vodafone only gets the capacity advantage in the uplink. In order to achieve big bandwidth gains in the downlink Vodafone will have to get Into Tally’s technology into its handsets. Confused? It would seem that the two should be reversed, but the way network feedback loops work means that the tower ultimately dictates the transmit power of the device and the device dictates the transmit power of the tower.

Vodafone isn’t far behind on the handset side of the equation, though. Lopez-Medrano said a radio chipset vendor has already licensed InToTally’s tech, and that chipset should make it into the first Vodafone devices within a year. Achieving InToTally’s promised downlink capacity increase will be more difficult because Vodafone needs a critical mass of upgraded handsets in the network before it will see any gains. Lopez-Medrano pegs that cross-over point at 30 percent, which will take a couple of years even if every new handset sold were to contain its technology. Vodafone is doing its best to prod its handset makers along. According to Lopez-Medrano it will eventually favor devices that utilize InToTally’s technology over devices that don’t.

Given Vodafone’s enormous scale, handset makers are sure to fall in line. Vodafone’s backing of InToTally also could have much broader implications for the global wireless industry. InToTally isn’t selling software or a chipset to Vodafone’s vendors, which they would then deploy in Vodafone’s network. They’re licensing InToTally’s intellectual property, which means they can incorporate it into all future network infrastructure and devices. So while Vodafone is implementing InToTally first, AT&T, Verizon and every other carrier in the world may not be far behind.

Racecar photo courtesy of Shutterstock user Christoff

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