TELECOM Digest OnLine - Sorted: Melding of Cell Phones and Wi_Fi Will be a Cosmic, Man

Melding of Cell Phones and Wi_Fi Will be a Cosmic, Man

Kevin Maney (
Thu, 25 Aug 2005 12:26:30 -0500

Back in 1965, Bob Dylan took the stage with an electric guitar, and
although some folk faithful booed, the enlightened went, "Oooo, you
can combine folk AND rock. Folk-rock, man. Dig it."

And nothing was the same again.

This kind of thing is about to happen with cell phones.

Over the next few years, companies will start selling dual-mode
cellular/Wi-Fi phones. The phones will be able to make voice calls
either on a cellular network, or by connecting via Wi-Fi wireless
Internet to make calls using VoIP (a.k.a. Voice over Internet

Cell-Fi, man. Dig it.

When in range of Wi-Fi in your office, home, Starbucks the phone will
make calls using VoIP,which should be cheaper and better quality than
a typical cell call. When there's no Wi-Fi, the phone will switch to
the cell network.

That might not sound like a big deal, but it is. These phones will
alter the dynamics of the telecom industry and change the way
consumers think about phone service.

People could truly have one phone that is their home and cell phone,
with all the advantages of both. Cell-Fi phones are the beginning of
the end for common wired telephone service, which will become the
bottom-rung stepchild of its industry the equivalent of AM radio,
single-blade razors and film cameras.

"The implications for the industry are huge," says Keith Nissen,
analyst at research firm In-stat, which predicts 66 million cell-Fi
phones in use by 2009.

But we're not there yet. The industry is still experimenting with
every aspect of this technology, including the chips and software that
make it go, the systems and standards for switching calls between
cellular and Wi-Fi, and the business models for offering it to
consumers and corporations.

Japanese cellular provider DoCoMo is probably the furthest along. Over
the past few months, DoCoMo began offering cell-Fi phones on a limited
basis. One is made by NEC, another by Motorola.

Just about every cell phone maker has some version of the technology
in the works. The Nokia 9500 is a cell phone that can connect to
Wi-Fi, but it's not set up to do VoIP calls. Some hackers have
figured out how to put Internet phone service Skype on a Nokia 9500
and make free phone calls over Wi-Fi, but it's apparently pretty
clunky. Nokia meanwhile is working on a real cell-Fi phone that it
plans to start offering to business customers early next year.

Corporations love the concept. A company could give employees one
phone. In any of the company's offices, that phone would connect to a
secure Wi-Fi network (presuming the company installs one), and act
like a typical office desk phone. Travel from a field office in
St. Louis to a subsidiary in Istanbul, and your phone would operate
just as if you were sitting at your desk same phone number, voice mail
and every other feature.

Outside the company, the phone would become a cell phone, with the
same phone number as you have at the office. At home, assuming you
have Wi-Fi, the phone could securely connect through the Internet back
to your corporate network and once again become your work phone great
for people who sometimes work at home.

For consumers, analyst Nissen thinks that the likes of Verizon
Wireless and Sprint will offer combination cellular-VoIP packages.
This could work to a wireless company's advantage because, Nissen
figures, up to 30% of cell phone calls are no made inside homes. If
those calls could be routed through the relatively cheap Internet
instead of over costly cell networks, wireless companies would save
money and free up capacity.

Because of the cost savings, a provider might be able to offer a
bucket of thousands of minutes of cell-Fi service for maybe
$50. "That's enough minutes so consumers just make phone calls and
don''t worry where it goes," Nissen says. Even the most chatty people
would have a hard time using 2,000 minutes a month.

You'd get one number for home and cellular. Same voice mail. One
bill. Cheaper because you're paying for one phone service, not two.

Once cell-Fi service is in place and priced right, consumers will jump
on it and get rid of their land lines. This will happen, much as
there came a day when people realized it was time to get a car instead
of a horse, or a gas stove instead of a wood-burning stove.

In the meantime, the whole industry is wrestling with some interesting
questions big and small.

On the big side: Who will have a leg up in cell-Fi? Maybe today''s
wireless carriers, because they have the cellular piece. But it could
be today's broadband providers, whether phone companies selling DSL
or the cable companies. They have the VoIP piece.

Or might it be a third party, like Skype? Or Google, which is on such
a roll it could open a chain of bowling alleys and make a killing?

Earlier this year, Time Warner Cable started trying to sell cellular
service in Kansas City. Seems like a smart step if cell-Fi is
coming. My neighborhood looks like it's been attacked by giant moles
as Verizon digs up everything to put in broadband lines a good idea if
Verizon wants to marry wireless to VoIP.

As for little questions: Nokia wonders whether, in some circumstances,
people might NOT want a seamless handoff between Wi-Fi and cellular.

"In your office, you're using your Wi-Fi phone and walking around, and
as you get close to a window, it might switch to cellular," says Nokia
executive Gerard Bruen. "Then you walk back to your desk and it
switches to Wi-Fi again. That might cause some issues."

And how about airplanes? Airlines, it seems, are going to nix cell
phone usage in the air. But they will increasingly provide wireless
Internet. If you have a cell-Fi phone and it's connecting through
Wi-Fi and allowing you to talk is that against the rules? Or will you
figure that out only after your fellow passengers flush your cell-Fi
phone down the commode?

Kevin Maney has covered technology for USA TODAY since 1985. His
column appears Wednesdays. Click here for an index of his Technology
columns. E-mail him at:

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