ON WI-FI CALLS VIA CELLPHONES

SNOWBALL'S CHANCES

The New York Times has a good article today titled "The Wi-Fi in your Handset" that discusses how much closer the "Barbarians" have gotten to the gates of Wireless companies' fortresses since my last post on the subject. 

Specifically, it asks:

"What if, instead of burning up minutes on your cellphone plan, you could make free or cheap calls over the wireless networks that allow Internet access in many coffee shops, airports and homes?

New phones coming on the market will allow just that.

Instead of relying on standard cellphone networks, the phones will make use of the anarchic global patchwork of so-called Wi-Fi hotspots. Other models will be able to switch easily between the two modes.

The phones, while a potential money-saver for consumers, could cause big problems for cellphone companies. They have invested billions in their nationwide networks of cell towers, and they could find that customers are bypassing them in favor of Wi-Fi connections. The struggling Bell operating companies could also suffer if the new phones accelerate the trend toward cheap Internet-based calling, reducing the need for a standard phone line in homes with wireless networks."

That's the promise.  The reality is still a few more years away, requiring technical, financial, and political progress on the intricately balanced set of interests of today's incumbents and the companies that would want to change and disrupt the landscape.

The Times article in particular does a good job of outlining the realpolitik realities that are at work within the oligopoly of incumbent wireless companies:

"Cingular Wireless plans to introduce phones next year that will allow people to connect at home through their own wireless networks but switch to cell towers when out and about.

Later this year, T-Mobile plans to test a service that will allow its subscribers to switch seamlessly between connections to cellular towers and Wi-Fi hotspots, including those in homes and the more than 7,000 it controls in Starbucks outlets, airports and other locations, according to analysts with knowledge of the plans.

The company hopes that moving mobile phone traffic off its network will allow it to offer cheaper service and steal customers from cell competitors and landline phone companies like AT&T..."

"Roger Entner, a telecommunications industry analyst with Ovum Research, said some carriers were still wary of Wi-Fi service. He said they were concerned that when hotspot reception was not good — whether at home or elsewhere — they would be blamed.

“The guys who don’t want it are predominately  Verizon Wireless,” Mr. Entner said. They do not want a customer who is getting poor service at a hotspot “complaining that Verizon service is responsible,” he said.

"A spokesman for Verizon Wireless, Jeff Nelson, said the company was looking at Wi-Fi service but had no plans to offer a product in this area. “At this point, we don’t see a great application for customers,” he said.

Further complicating the business discussion for the carriers are the incestuous ownership arrangements in the telecommunications world. For instance, Cingular Wireless is owned jointly by AT&T and  BellSouth, while Verizon Wireless is part owned by Verizon Communications, the regional phone giant.

BellSouth, AT&T and Verizon Communications each have an interest in selling high-speed Internet access for homes and offices. If consumers have an incentive to set up wireless networks in their homes — networks that could be used for superior phone service — it could give them another reason to buy high-speed Internet access."

And these political machinations are not just limited to the incumbents, but are also rife within the ranks of the "Barbarians".

Andy Abramson of VOIPwatch, who's posted often about the convergence of wifi and cellular technology in mainstream wireless handsets, has a good post describing these details if you're interested.

In any case, the end-result of all this in not a question of "if" anymore, but "when". 

I'll repeat myself from my post in April:

"Again, as I stressed in the earlier post, the economics and business models around all this are early.  And the goal again for most similar efforts is around creating,

A nation-wide, non-cellular, broadband wireless consumer online service that charges mainstream, flat, monthly access fees."

Or maybe nothing at all, for basic wireless telephony.

It's a good time to be a mainstream digital consumer.

Comments

[mark]

This is what I hope Apple's "iPhone" and Mobile Me will be. Free wifi-based calling - all you need to do is buy the phone. There could possibly be an additional paid tiered data service.

That's why I hope the rumors about August aren't true, as I don't think the "patchwork" wifi is ready yet. But on the other hand, maybe Apple will somehow help to drive more rapid development of that wifi network.

[Dylan]

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[Makayla]

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