The epicenter of the next phase in the ­software-defined radio revolution is likely to be De Leon, Texas, a town of about 2400 people that is roughly 220 ­kilometers southwest of Dallas. De Leon’s main attraction for the last 92 years has been its annual Peach and Melon Festival. The town also is the home of a rural mobile-phone provider called Mid‑Tex Cellular, which three years ago became Vanu’s first commercial customer.

“We were looking for new ­technology, something that was more flexible and maybe would allow us to avoid constant hardware changes,” says Toney Prather, Mid-Tex’s CEO. The company’s existing network was based on older, TDMA (time-division multiple access) technology, and to move to a newer standard, such as GSM or CDMA, the provider faced hefty upgrade costs. Standard base stations run about $50 000 apiece—which can add up fast. AT&T Wireless reportedly spent $10 billion to give its TDMA network a GSM makeover.

In early 2003, Prather agreed to let Vanu supply Mid-Tex with GSM software-defined base stations on a trial basis. At the time, Vanu didn’t actually have a working GSM base station, but its engineers got busy, and within seven months they had software that was good enough for a field trial [see “Mobile Phone System Passes Texas Test,” IEEE Spectrum, February 2004].

Since then, Mid-Tex has deployed 29 Vanu base stations, which all run on Hewlett-Packard ProLiant servers and handle about 6 million minutes of calls each month [see diagram, “Inside the Anywave”]. The carrier has since shifted most of its 11 000 customers from TDMA to GSM. In addition, more than 20 percent of its revenues come from the major ­carriers, through roaming agreements that give their users cell coverage when they travel through Mid-Tex’s 21 000-square-­kilometer territory.

In all, Prather figures he has spent about $2 million on his Anywave network. That’s about what he would’ve paid for traditional GSM equipment, but now he won’t need to buy an entirely new network when he adds CDMA. Nor will he need to lease additional T1 lines to get the signals from the cell site to the switch—which can run several hundred dollars a month per line. That’s because the base station architecture is IP-based, so the same T1 can handle any type of call from any carrier. A single T1 could even handle multiple sites, Prather says.

What’s more, the company can now perform diagnostics remotely over the Web, cutting maintenance costs. Eventually, the new network may even save Prather’s business. Rural cellphone providers always worry that one of the bigger carriers will extend its network or “overbuild” their territory. “You’re battling the giants,” Prather says. “But if we can provide a network efficiently and cheaply, then they won’t want to overbuild it.”

At press time, Mid-Tex was field-­testing the new dual GSM-CDMA software at two of its sites, and Prather was eager for Vanu to give him the go-ahead to upload the CDMA code throughout his network. “I hope it’s any day,” he told Spectrum. “We’re ready now.”

Anywave deployments so far have been limited to rural areas such as De Leon and certain military installations. But Bose expects to land some much bigger fish within the next year or two. Vanu executives have recently been getting a warm reception when they’ve demonstrated the new multistandard technology for some of the major carriers.

Another promising area is in smaller base stations, sometimes called “femtocells,” which are designed to offer wireless coverage within an office building or household. The worldwide market for femtocell products is expected to reach nearly 19 million units by 2011, according to ABI Research. “Our technology is a great fit for that,” Bose says.

But wait, there’s more: Bose says his ­company’s technology could just spark a restructuring of the  wireless-­infrastructure in­dustry. At present, it’s still mostly vertically integrated, with companies like Ericsson, Huawei, and Nokia producing nearly all the components, from the base stations to the antennas. Rather than having a single company do everything, Bose suggests, the “horizontalization” of the industry would result in more agile companies—­including Vanu—doing whatever they’re best at.

It sounds like a big leap, but that’s precisely what happened in the computer industry 20 years ago, when Digital Equipment Corp., IBM, and other giants gave way to upstarts like Apple, Intel, and Microsoft.