The shifting future of wireless voice

A blend of wireless broadband and VoIP is coming, but what form it will take remains to be seen

The technology is in its early stages, there's no proven business model, and there's strong disagreement about how the trend will play out. But most experts agree that voice over IP (VoIP) will eventually combine with new types of wireless broadband to change how businesses and consumers acquire and use mobile and fixed voice services. 

That means you eventually could walk down the street talking over a cellular network, and the call will seamlessly switch to voice over WLAN when you enter your office, which would cut down on the number of cellular minutes you and your company must purchase. Another example: Software in your phone will automatically route your calls over a voice-over-WLAN system when you are inside a warehouse where the cellular signal is weak and switch to the cellular network when you are outside where the WLAN doesn't reach.

Most important, perhaps, is the possibility that this emerging trend -- and the convergence technology behind it -- could create new challengers to cellular and landline operators. That, in turn, could lead to new and more intense competition.

Derek Kerton, principal of Kerton Group

Derek Kerton, principal of Kerton Group"Cellular operators aren't thrilled about this idea yet," said Derek Kerton, principal of Kerton Group, a telephone market research and consulting firm. "If [subscribers] think they could cut their [cellular] service from, say, 1,000 minutes to 200 minutes, that explains why they're not too excited."

"Everything is starting to blend, and there are no clear lines about who will provide what kind of service," acknowledged Tony Krueck, vice president of product development for Sprint. "It'll take a while to work itself out."

The technologies

At the heart of this issue are some brand-spanking-new technologies and some new twists on older technologies that converge high-speed landline and wireless Internet access with VoIP. These technologies enable VoIP, which is already a reality in many homes and offices, to become mobile.

The furthest along of these emerging wide-area wireless technologies are wide-area Wi-Fi mesh networks, which proponents claim can cover entire metropolitan areas. Cities such as  Philadelphia have received the lion's share of attention about their citywide mesh networking plans, but this technology is already in place in a number of smaller cities.

Some believe that citywide Wi-Fi alone will change the mobile voice landscape, opening the way for increased adoption of mobile VoIP. However, others, such as Phil Redman, a research vice president at Gartner, don't believe Wi-Fi mesh is up to the task.

"One big reason municipal [Wi-Fi] services will fail is that there's no control," Redman said. "This is unlicensed spectrum, so if I blast you with my private networks, there's nothing much you can do about it."

Also, he noted that the current Wi-Fi standard doesn't have built-in quality of service to ensure voice quality, an issue that will be resolved when the next Wi-Fi standard, 802.11n, is ratified later this year or early next.

Tony Krueck, vice president of product development for Sprint

Tony Krueck, vice president of product development for SprintInterestingly, Wi-Fi's reputed failings aren't discouraging Sprint. Krueck disclosed that his company is working on a consumer-level phone, which internally is called the Combophone, that can handle both voice over Wi-Fi and cellular calls.

"When you enter your home, there will be a special wireless [Wi-Fi] router that would pair with the Combophone," Krueck said. "Once you leave the house again, you'd use the [cellular] network for your calls."

Krueck stressed, however, that Sprint's Combophone won't work over Wi-Fi outside the home -- the planned Sprint router is necessary to make the VoIP part of the system work, and that router will be available only for in-home installation. He said he expects Sprint's Combophone to launch in the first half of next year.

While use of Wi-Fi for VoIP has its detractors, more robust and far-reaching mobile wireless technologies also are emerging. The best known of these technologies is mobile WiMax. Fixed WiMax is already a fully ratified standard, and the mobile version could be approved as soon as the end of this year.

In addition, IPWireless' UMTS TDD and Qualcomm's FLASH-OFDM are already mobile and available. All three of these technologies create wide-area IP-based networks and usually operate in licensed portions of spectrum, which makes them less prone than Wi-Fi to problems such as interference.

Benefits of converged technologies

The result of all this technology is that users can eventually have a single phone that converges cellular, fixed and mobile VoIP. One market segment in which that idea will be particularly attractive is health care, where doctors and nurses in large facilities such as hospitals spend much of their day walking around visiting patients and colleagues and attending meetings. As in the warehouse scenario mentioned earlier, in-building cellular coverage can be spotty and, besides, VoIP is less expensive. As a result, many health care organizations already have given medical personnel voice-over-WLAN phones, and phones that combine cellular and VoIP would have obvious attractions.

In order for the vision of voice convergence to work, however, technology is needed to hand off calls between cellular and IP-based networks. Here, too, new technologies are emerging. The two with the most momentum are Unlicensed Mobile Access and IP Media Subsystem (IMS). In simple terms, the former technology is for use with GSM-based cellular networks such as those deployed by Cingular and T-Mobile in the U.S., while IMS is IP-based and uses SIP technology already commonly in use with fixed VoIP systems.

Technologies like these are essential for the vision of mix-and-match cellular and VoIP calling to work. Cellular operators and cell-phone manufacturers must incorporate technologies such as these into their infrastructures and phones before these transparent handoffs between networks can occur. The phone manufacturers, which ultimately will sell phones no matter what type of network is used, have been testing the technology and pushing carriers to adopt it. Similarly, vendors of infrastructure equipment used by cellular operators, such as base stations, have also been testing the technology. The carriers, however, have been less than eager, since the change would tend to migrate cellular minutes to VoIP. And that potentially would bring in a slew of new competitors.

The missing business models

If the technology behind this potential sea change is up in the air, the business models are even more so. Nobody's quite sure who the major players will be and exactly what services they will provide.

The cellular operators obviously want to stay in the game. Sprint's Combophone, for instance, gives that company the potential to gain revenue for in-home fixed-line voice service from its cellular subscribers. However, many smaller players are also trying to get a piece of the action.

"We're very interested in voice because it's still a killer application," said Jeff Thompson, CEO of TowerStream, an already-profitable ISP providing fixed WiMax-class access to enterprises in six U.S. cities. He said his company is particularly well positioned to take advantage of mobile VoIP.

"When you use WiMax, you have a much lower cost than legacy infrastructure, plus it's all IP-based," Thompson said. However, he added this potentially gnarly question: "Everybody likes mobility, but how do you make money with mobility? We definitely think voice is a killer app and we have to support it. But whether we do it as a partner or ourselves, we haven't decided yet."

At the other end of the spectrum is Gartner's Redman, who is less certain that there will be a lot of new players in the mobile voice game.

"Hundreds of billions of dollars have been spent on creating robust cellular networks," Redman said. "There's nobody who can compete with that." However, while he doubts that companies like TowerStream can become major players, he acknowledges that new applications for wireless VoIP will emerge.

"It'll fill niches. It will help with in-building capabilities and for specific industry applications," Redman said. "But will it be disruptive to cellular? Companies like TowerStream might like to think so, but you look at a company like Cingular -- they're huge."

Sprint's Krueck falls somewhere in between Thompson's and Redman's points of view. Sprint has one advantage that no other U.S. cellular operator has -- a lot of licensed spectrum in the 2.5-GHz range, which it acquired when it merged with Nextel. The Federal Communications Commission has told Sprint it must use the spectrum or lose it.

Krueck confirmed what many industry analysts have been speculating about: Sprint plans to use that spectrum for wireless broadband and, potentially, for voice over IP. Nextel ran field trials of FLASH-OFDM before the merger, and Sprint currently is testing WiMax and UMTS TDD.

"We'll do trials this year on a couple of different wireless broadband technologies," Krueck said. "Sometime this year we'll actually select a technology, and sometime in 2007 we could start seeing something come into production."

But Sprint hasn't decided what it actually will do with its new technology and, in particular, whether it will use it for voice, Krueck said.

"We're strategizing now about what the business model would look like for giving access to various types of applications over the IP network," Krueck said. "With [VoIP], we could block it, accept it or establish a business model with vendors like [VoIP provider] Vonage where, if you want to mobilize VoIP, we could charge for the relationship. Those discussions haven't happened yet, but that's an option. Any way you look at it, wireless companies that carry that traffic will have to be compensating, or we'll go out of business."

Krueck stressed that Sprint and the other cellular carriers didn't spend billions to build out their networks just to have their revenue taken away by VoIP over other types of wireless networks.

"It doesn't make sense to move our 50 million customers off an existing infrastructure," Krueck said. "Still, over time we might cap that network and grow the other [IP-based] network."

Even a potential competitor like TowerStream is still trying to figure out a sensible business plan, TowerStream's Thompson acknowledged.

"It's tough to predict the future, but I do see a lot of technologies that are maturing that will allow people to deploy [VoIP] -- if they find the right business model," Thompson said. He acknowledged that, like Sprint, his company is still trying to figure out just how to do that.

Despite the differing opinions, Kerton, the market researcher, believes that these new voice technologies will play a role in the future that will benefit enterprise and individual users alike. Depending on the business models that emerge, that role could be significant.

"At the very least, it will fill a significant niche," Kerton said. "If citywide coverage isn't feasible, there still will be a role [for wireless VoIP] in the home or enterprise."

David Haskin is a freelance writer specializing in mobile and wireless issues.

Copyright © 2006 IDG Communications, Inc.

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