TerraNet CEO Anders Carlius describes the technology and business model he hopes will bring cellular telephony to remote villages of developing nations.  A TerraNet phone can be used as a standard GSM handset or as a node in a mesh network of nearby TerraNet phones.  The mesh network could be used for disaster relief when the cellular infrastructure was down, campus coverage, offloading cellular traffic when calls were local, etc., but TerraNet has decided to focus on villages in developing nations.

If there were only two phones in a village, they could make voice calls and send text messages whenever they were within 1 kilometer of each other.  The coverage would expand if there were more than two phones, because calls can be routed through intermediate nodes.  Up to 7 hops are practical -- beyond that latency is too great for effective voice communication.

A TerraNet mesh network in a rural village can connect to the rest of the world through an IP gateway consisting of a PC with software that will fit in a USB thumb drive.  The gateway might connect to a TerraNet network in a nearby village or to a cellular base station.  As long as one of the phones is within 1 kilometer of the gateway, every node on the network can reach it.

Major cellular operators cover the larger cities in a developing nation, but rural areas often lack coverage because the cost of marketing and servicing accounts is prohibitive.  Carlius feels this technology has the potential of bringing connectivity  to over 3.5 billion people who are not served today.  He estimates that a village entrepreneur could build a gateway and provide unlimited voice and text service for between $3 and $5 dollars per month per phone -- a micro-finance approach to cellular telephony.  Governments wishing to cross the digital divide have also expressed interest and sponsored TerraNet trials.