Google Loon Questions That Need Answers

google is pilot testing the commercial viability of its Project Loon in Sri Lanka. a number of basic questions about its business operations are yet to be answered

The initial excitement over “free Wi-Fi for everyone” since Google Loon announced its presence in Sri Lanka has now been replaced with wary questions about its business operations.

The project is “balloon-powered internet for everyone”. Loon balloons work like radio transmission towers, except they are not rooted to the ground. They float 20km above the earth, and by virtue of their height, are able to provide coverage to a land area of approximately 5,000 square kilometers. Micro cells (somewhat like mini base stations) placed inside a building or device pick up Loon signals and get immediate access to 4G internet.

Sri Lanka has generally been ahead of the rest of South Asia in the internet game. We were the first in the region to get 3G internet on our mobiles phones in 2006, and then 4G in 2014. Telecommunication services on the island remain some of the most reasonably priced globally, and 3G is now available almost island-wide although 4G and smartphone usage is limited to around 30% of the population.

Throwing Google balloons into Sri Lankan airspace makes a lot of sense. It would remove the need to spend exorbitant amounts of money on terrestrial (traditional tower) coverage and provide 4G internet to anyone on the island with a compatible device. The opportunity brings with it the hope that leading the era of balloon internet will help boost the economy.

Sri Lanka’s small landmass, its reputation for leading ICT in South Asia and ambitions for maintaining that lead are an ideal match for Google’s requirement to pilot a business model for the project. A Loon balloon first entered Sri Lankan airspace on 15 February 2016, following discussions initiated by Silicon Valley billionaire venture capitalist Chamath Palihapitiya.

Question 1: Who will bear the cost of Project Loon in Sri Lanka? Will it be Rama Corp, existing telecom providers or the end user?

Google Loon will be brought to Sri Lanka by a company called Rama Corp, which is owned at least in part by Palihapitiya. A 10% stake in the company will be made available for local telecommunication providers to opt in. Rama will connect rural consumers with existing ISPs through Loon. So far, it seems that users will continue with their existing service provider, and have the option of linking to Loon when the home signal drops – how international roaming works. The service provider will pay “rent” to Loon and bill its customers as usual. Sri Lanka’s telecom rates are low, and according to officials, “there is nothing left to share with Google”. Sri Lanka is offering an opportunity for Google to test the commercial viability of Loon before its global launch, and it is not unreasonable to expect the service to be rolled out free of charge, according to experts.

Question 2: Who is Rama Corp, and what are they in this for?

The actual balloons and the technology they bring are provided by Google. Software for managing the location of the 13 balloons, which are said to be needed to provide full coverage to Sri Lanka, are also provided by Google. Radio spectrum for sending the service live is owned by the government and leased to private broadcasters. Rama Corp will be issued a license by the Telecommunications Regulatory Commission (TRC) of Sri Lanka to “deploy infrastructure to lease services to other telecom providers”, according to a telecommunications official who wished to remain unnamed.

During initial planning stages, Google proposed to buy spectrum to run Loon, but decided instead to work with existing telecom providers in a clear win-win deal. However, in the case of Sri Lanka, telecom providers have been invited to partner with Rama and not Google. Rama Corp, which is not a familiar name in the Sri Lankan business context is nevertheless gaining media attention in the US and elsewhere as a telecommunications provider with beginnings in Sri Lanka.

Palihapitiya’s agenda for Rama Corp in the US is reported to be disruption of established carriers.  He also controls LotusFlare, a company with an app by the same name that lets users take charge of their data usage, providing solutions for better management (for example, buying data for “one week” as opposed to ‘x’ number of megabytes). LotusFlare also owns another app, DataEye, through which users can create customized data packages as an alternative to completely switching data off when going out of Wi-Fi range. The only fee LotusFlare charges is a licensing fee for carriers to make its services available to subscribers. Chamath Palihapitiya has undeniably got his fingers in many pies.

Question 3: What will the government give Rama Corp in exchange for a 25% stake in the company?

The Government of Sri Lanka will be given a 25% stake in Rama Corp, and it has been confirmed that this is not in exchange for a financial investment. What Rama needs from the government that it can’t get anywhere else is radio spectrum. Google has experimented with different bandwidths, and the current standard is the 700MHz range, which is ideal for LTE internet. Most of the 700MHz frequencies in Sri Lanka are owned by private television companies. This means that Rama will likely have to negotiate space with these, or with the existing telecom providers who own the less-than-ideal 800-900MHz ranges.

Muhunthan Canagey, CEO at the Information and Communications Technology Agency (ICTA), which spearheads the project in Sri Lanka, was unavailable for immediate comment. Attempts to clarify information with the TRC, and the Ministry of Telecommunication and Digital Infrastructure were also unsuccessful. The Wall Street Journal reported in February that “attempts to contact a spokesperson for Rama Corp weren’t immediately successful”, and that Google parent company Alphabet refrained from “further comment”. Questions regarding business operations were not clearly answered by Chamath Palihapitiya at a media briefing event held recently in Colombo. The trend to not answer questions is potentially worrisome. India recently banned Facebook’s Free Basics because it violated the principle of net neutrality. “Governments should fix up their patchy regulatory regimes first to ensure that everyone—not just Google and its partners—really does benefit,” Sunil Abraham, executive director of the Centre for Internet and Society, a think tank in Bangalore, told the MIT Technology Review.