Wifi Revolution

Are American consumers ready for - or even demanding - the ability to seamlessly switch between a cellular network and a home WiFi (News - Alert) network while talking on their cell phone? T-Mobile USA thinks so and is willing to test the waters to find out.

The fourth-largest mobile phone company in the United States is preparing to launch such a service this month. The first of its kind in the US, this service will be a test case for other operators also looking to deploy similar services.

The competitive waters won’t remain calm for long however as Sprint Nextel is looking into developing a similar service through its joint venture with four major cable companies and Cingular is testing a service in its labs.

Using a standard technology developed for GSM networks, called unlicensed mobile access or UMA, T-Mobile is keeping the details of the new service quiet. One spokesperson noted that the company is interested in replacement or displacement of landline minutes and believes that the future will be about leveraging diverse forms of radio access technology for T-Mobile customers and UMA is one of the technologies that will enable the company to deliver on that promise.

European carriers, Telecom Italia (News - Alert) and Orange, have already stated that they expect to launch their services later this year and will charge between 10 and 15 euros per month for unlimited calling from dual-mode WiFi/cellular phones used in home networks. For the European market, however, the case for such a service is that the functionality is provided to the consumer at prices much cheaper than current cell phone and landline rates.

The US market may prove to be more of a challenge as voice minutes are sold in buckets. The benefits, however, could lie in the opportunity to conserve voice minutes while using the WiFi network, thus reducing the need for talk plans that include more minutes and higher prices. Consumers will also gain access to a higher speed network that will enable the download of mobile content such as Web pages, music and games, much faster than even from a 3G wireless network.

Some analysts warn that such a service may not initially appeal to American consumers without a significant price advantage. Adoption can be a result of features once consumers realize the added functionality that they can’t get on their cell phones. Such features will include receiving voice mail from a Web portal or determining whether friends on the buddy list are available for phone calls.

Initially the service will be limited to home-based WiFi networks using the standard 802.11 WiFi routers from companies such as D-Link or Linksys (News - Alert). These routers will provide an indoor signal and users will be able to call anyone over the WiFi home network for a flat fee. When outside the hotspot, the dual-mode phone will automatically switch over to T-Mobile’s cellular network.

Without inaccurately predicting the outcome of this T-Mobile launch, it should be safe to say that this move is a strategic one for the company to gain a competitive advantage over its giant competitors in an effort to gain more share of the market.

True, the company could be claiming to utilize the UMA to provide better service to customers, but as the company competed against such companies as Cingular (News - Alert) – owned by the largest landline provider in the US – T-Mobile has got to be quick to jump on technologies that enable it to capture more of those minutes.

The ultimate test will be if T-Mobile can implement an effective marketing strategy to entice consumers to not only try the service but to adopt the service. The features will help with the adoption, but there has to be a great hook.

Once considered a myth, wireless Ethernet has changed society in the way we work, play and live. And while WiFi has already penetrated even the most quaint and nostalgic parts of our everyday lives, it still remains nascent in the communications space. See what the future holds for WiFi Telephony at the only summit dedicated to help you find answers to today’s most vexing questions. The WiFi Telephony Summit takes place at INTERNET TELEPHONY Conference & Expo, WEST, which runs Oct., 10-13, 2006, in San Diego.

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Susan J. Campbell is a contributing editor for TMC and has also written for eastbiz.com. To see more of her articles, please visit Susan J. Campbell’s columnist page.

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