Q-Free toll solutions:
Clear roads all the way to Sydney
Small-town company became world-class technology developer and outcompeted the USA thanks to the Norwegian Public Roads Administration who took a chance on local talent.
The story of Q-Free ASA is an extraordinary one: a small-town company that became a world-class technology developer and outcompeted the USA – thanks to the fact that the Norwegian Public Roads Administration dared to take a chance on local talent. Q-Free is also a testament to the value of participating in international research and standardisation projects.
Q-Free’s trajectory has been phenomenal. In just over 20 years the little electronics firm originally based in Selbu (population 4 004), in central Norway, has become a leading global supplier of technology for electronic toll collection. It is a classic rags-to-riches tale, with a touch of David and Goliath.
Thanks to the company’s solutions, vehicle traffic today is flowing far more smoothly in the world’s major cities – London, Bangkok, Rio de Janeiro, Lisbon, Sydney and more. Q-Free has also been able to influence the technological standard adopted by most of the world for this enormously important niche market. The company’s involvement in standardisation efforts has put it in a strong position to win new contracts in a global market whose growth, thanks to the worldwide upsurge in vehicle traffic, looks to be unlimited.
Norway foremost in radio technology
In 1986 the two-year-old electronics firm Micro Design (Q-Free’s former name) received a phone call that would change its future: an enquiry from Trøndelag Bomveiselskap – a new company established to organise local tolling on behalf of the Norwegian Public Roads Administration in connection with financing the planned motorway to Trondheim. The tolling organiser had already looked into the available technologies of international firms and felt that they offered too little performance at too high a price.
“At that time, no such technology existed in Norway, and the international solutions were very costly,” explains Steinar Furan, Advisor to CEO at Q-Free. “What’s more, traffic had to be slowed to 50-60 kph for the vehicles to be registered. Slowing down that much during the morning and afternoon rush hours was a major drawback that would cause unacceptable congestion.”
The Norwegian Public Roads Administration (NPRA) decided to investigate whether a Norwegian group could solve this technological challenge. Knowing that Norway was strong in the field of radio engineering due to the demanding communication needs of the country’s international shipping fleet, the NPRA issued a challenge: 1) Develop a technology that can identify passing vehicles at speeds of at least 160 kph. 2) Produce a transponder to be installed in each vehicle – with a unit price not to exceed NOK 100.
“With funding from the Research Council of Norway among others, we launched an R&D project with the NPRA as our public partner and customer,” recounts Mr Furan. “It was absolutely critical to the outcome that the NPRA assumed such a proprietary role in the process; their people contributed vital expertise to the project and steered its development in the right direction. The best component for successful product development is a customer who is competent, involved and demanding.”
The skilled electronics engineers in Selbu passed the test with flying colours. In fact, the small town turned out to be an ideal place to work with radio signals; besides its already strong electronics community, radio disruptions were far less of a problem than in a larger setting such as nearby Trondheim. In 1988, two years after Q-Free answered the challenge, the Q-Free Tolling System was in place at toll collection stations at Ranheim outside of Trondheim. The solution functioned seamlessly from Day 1.
David and Goliath
The company’s next milestone was a more complicated affair two years later, when Oslo Municipality was preparing to implement a similar system of solutions. Rather than trusting Trondheim’s experience with Q-Free, Oslo decided to purchase a US solution without holding competitive bidding. This triggered a storm of protest, and the case ultimately landed on the desk of the Minister of Transport and Communications, who voided the US purchase order. When the contract was subsequently put up for competitive bidding, Q-Free won it.
Q-Free’s accomplishments in Trondheim and Oslo were exactly the experience the company needed to go abroad with its technological solutions. Q-Free continued to refine its solutions, participating in several research projects in Norway and abroad. Its major international breakthrough came in 1991 in Portugal; thereafter the international contracts followed in quick succession – in Sweden, Brazil, Australia, France and many other countries that are now operating Q-Free solutions. A critical factor in the company’s success has proven to be the establishment of local subsidiaries, where suitable, with a local management and workforce. As Mr Furan puts it, “Q-Free definitely thinks globally and acts locally.”
Leading the standardisation efforts
“We knew our technology was the world’s most advanced,” says Hans Christian Bolstad, Research Director at Q-Free. “But since this was still a newly emerging area of technology, we also understood that having the best product wasn’t enough. Even the greatest technology can land on the scrapheap if international standards are changed.”
Together with the NPRA, Q-Free became deeply involved in the European standardisation process. The company’s wide-ranging experience, both technological and practical, made it a welcome partner in several EU projects, and helped it to establish useful networks, generate knowledge, and take on a key role in the EU standardisation process.
“These standardisation processes involve tough negotiations that take into account many interests,” explains Dr Bolstad. “It’s essential to know what’s going to be able to influence the outcome and adapt one’s own technology development accordingly. Proper timing of product development is also critical for success. Developing too far ahead of the standardisation negotiations could render your solution useless once the standards are decided upon. On the other hand, waiting until the standard is already in place means having to play catch-up. Working on both levels in parallel is optimal, and we managed it.”
Nearly global standard
Dr Bolstad also stresses the importance of the Norwegian Public Roads Administration’s role in the EU standardisation process.
“It’s not the case that once a standard has been determined, everything is cut and dried for the technology developers,” explains Dr Bolstad. “To ensure that the technology companies are all pulling in the same direction, it’s vital to have a detailed description of how the standard is to be interpreted. In this case it was the NPRA that set these specifications.”
Unquestionably, Q-Free’s and the NPRA’s involvement in standardisation efforts has been critical to the company’s development. Only five countries in the world use a standard that differs from the platform the Norwegians helped to prescribe.
“True, three of those five are the USA, Japan and China,” says Dr Bolstad. “But throughout the rest of the world, our transponder is in the driver’s seat, if you’ll excuse the pun.”
|Q-Free - funding|
|Q-free has played a key role in a number of EU projects. Several Research Council programmes have also provided the firm with funding, including Core Competence and Growth in ICT (VERDIKT). Q-free has also received funding under the Design Pilot programme of the Norwegian Design Council.|
- Last updated: