Subject: [NEXTEL-1] Cutting calling costs with Wi-Fi phones

From: [email-masked]
Date: Wed, 12 May 2004 10:52:59 -0400

http://www.cnn.com/2004/TECH/ptech/05/10/wi.fi.phones.ap/index.html

Cutting calling costs with Wi-Fi phones

Monday, May 10, 2004 Posted: 10:11 AM EDT (1411 GMT)

NEW YORK (AP) -- Now that some Wi-Fi "hot spots" have grown into broader 
neighborhood "hot zones," the next wave is waiting: Phones and gear that 
send conversations over wireless Internet networks -- for free or at a 
fraction of the cost of traditional calls.

Mobile phone maker Motorola Inc. plans to introduce a device that would 
seamlessly switch calls from cellular networks to cheaper Wi-Fi networks 
wherever they're available. Discount carrier IDT Corp. is testing
consumer 
Wi-Fi phone service in Newark, New Jersey.

If successful, Wi-Fi calling would be one more factor decreasing calling 
costs and shrinking revenue at traditional carriers.

"The potential is enormous as an alternative to conventional telephony," 
said John Jackson, a wireless-technology analyst at The Yankee Group.

Until recently, Wi-Fi phones were limited to businesses and colleges
that 
could set up Wi-Fi in a building or a campus. Now, Wi-Fi "hot zones"
range 
from a 100-block section of Spokane, Washington, to the Gare du Nord
train 
station in Paris, broadening the market for Wi-Fi phone service.

"Hot zones are proliferating," said Robert Schwartz, IDT's executive
vice 
president. "We think in some segments of the market, this could replace 
home phones."

Wi-Fi phones employ a technology known as Voice over Internet Protocol, 
which translates conversations into packets of data that are sent over
the 
Internet, instead of the old, circuit-switched phone system, for part of 
their journey.

The technology slashes the traditional notion of "long distance" -- just
as 
there's no extra charge to send e-mails around the world -- and cuts out 
some of the access fees regional Bell carriers charge.

Wi-Fi antennas broadcast a high-speed Internet connection over the radio 
spectrum to computers within a few hundred feet. Because that part of
the 
spectrum is unlicensed, free and low-priced Wi-Fi access has cropped up
in 
cafes, bookstores and airports. There are about 18,000 Wi-Fi hotspots in 
the United States, and it's used in hundreds of thousands of homes.
New markets

In theory, whenever people with Wi-Fi phones have access to a hot spot, 
they might have little inclination to spend extra on a cell phone call. 
That could terrify the cellular carriers that have spent billions
building 
their networks.

The rosiest predictions estimate Wi-Fi phoning won't instantly be a big 
moneymaker. ABI Research predicts the Wi-Fi voice market will be just
$20 
million by 2009. By comparison, the five largest U.S. telecom companies
had 
$188 billion in revenue and $18.7 billion in profits in 2003.

Still, voice over Wi-Fi could siphon business from landline and wireless 
carriers already struggling amid intense competition.

Consumer long-distance companies like IDT see broad new markets for
Wi-Fi 
phoning.

IDT sells 20 million calling cards a month, mostly to new immigrants who 
may not have their own phones. The Wi-Fi phone packages the company is 
testing would target the same demographic, with prepaid service, like
its 
calling cards. Schwartz said IDT would expand the offering beyond Newark
if 
it's successful.

One of the leading Internet telephony providers for consumers, Vonage 
Holdings Corp., plans to offer a Wi-Fi phone for home use later this
year. 
Motorola's device is expected in the second half.

Phones from SpectraLink Corp., a Wi-Fi phone company that sells to 
businesses, range from $400 to $650. But the next generation of devices
is 
expected to cost less -- IDT estimates less than $100. The company won't 
disclose who made the devices for the Newark test.

IDT, which also offers home Internet phone service, is testing
technology 
that would turn handheld computers running Microsoft Corp.'s PocketPC 
software into a Wi-Fi phone.

Internet-phone company Skype Technologies SA -- launched by the creators
of 
the Kazaa music-swapping program -- already has introduced software that 
lets users do precisely that, for free, though Skype members can call
only 
each other.
Wi-Fi networks

Laboratory tech support specialist Lee Brown talks into his Vocera 
'communicator' in the emergency room area at El Camino Hospital.

With big telecom carriers showing little interest in advancing voice
over 
Wi-Fi, David Gross, a senior analyst at Wireless Data Research Group, 
believes the big test will be whether businesses adopt it, at the very 
least for internal calls.

Some already have -- and are enjoying both cost savings and extra
functions 
made available by voice over Wi-Fi.

Vocera Communications Inc., a privately held maker of Wi-Fi
communications 
products, has signed on about 65 hospitals, libraries and retailers, 
including Best Buy Co. and Target Corp.

Vocera's voice-activated "communicators" clip on to clothes, can be worn
on 
a lanyard and act, in some ways, like a walkie-talkie. They track users
by 
job title, so a nurse can say, "Get me a cardiologist" and the system
will 
find the nearest one.

"It used to take 14 steps to start an IV. Now it's down to three," said 
Mark Zielazinski, chief information officer of El Camino Hospital in 
Mountain View, California, which has been using Vocera for a year. "It 
eliminated telephone tag and improved communications."

Many college campuses also have extensive Wi-Fi networks. Dartmouth 
College, a leader in campus Wi-Fi, now gives students software for
making 
free long-distance calls over the wireless network.

Larry Levine, Dartmouth's director of computing, said the fact that
calls 
could be made anywhere from a handheld computer or a laptop was one
factor.

But the big reason behind the switch?

"This is the way phones will be done," he said. "At some point, it makes
no 
sense to stay with old-style telephony."

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