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Dual Mode, Multi-Function Handsets:

Fighting Back Against Unpredictable Costs

By Ilkka Pouttu


One of the greatest mysteries in the world has got to be the typical businesses cellular communications invoice. Often, the CFO has no idea what the cost will be from month to month and it often does not follow a set pattern. Unfortunately, it is an essential part of doing business today to provide some form of wireless communications for key employees.

The recent growth in telecommuting and the resurgence of business travel after the post 9/11 downturn are definitely causing businesses to evaluate how they can cost-effectively provide for the communications needs of their geographically diverse staff. Organizations are looking for ways to better manage both personnel and technical resources in the face of this changing world. With the introduction of technologies, including Wireless Access Points, PDAs and PDA/cell phone combinations (multi-use handsets), it is easier for employees to be mobile, yet remain productive, regardless of physical location. As mentioned earlier, the cost associated with providing this technology to employees is often difficult to calculate and even harder to predict. Usage-based billing can be a nightmare for finance departments, who are tasked with controlling and predicting costs.

In order to address these unpredictable costs, it is important to learn a lesson from another area of communications, the office phone line. A great number of businesses are switching from the traditional PSTN phone system to VoIP. They have found that as the cost of high-speed Internet connections goes down, the ability to �share� this bandwidth with voice traffic is a reality. VoIP offers these businesses a predictable monthly cost as well as greater flexibility and total cost of ownership. The time has come to move this flexibility and predictable cost out of the office and into the field.

This new way of communicating is made possible by the introduction of the Dual Mode Handset. This technology combines the low cost of VoIP with the ease of a cell phone to offer an unparalleled solution for mobile communications. The Dual Mode phone is a multi-function handset that works with VoIP service providers and infrastructure equipment vendors worldwide making it a true solution for today�s international mobile worker. There is no doubt that this technology is new and exciting; however, what is the true need for it, and does the underlying infrastructure exist to allow it to work seamlessly?

Mobile Workers

Businesses are also putting employees on the road in increased numbers once again. This is a rapidly increasing trend which is only expected to continue to rise. Due to the events of 9/11, there was a downturn in the amount of travel in general, and that included business travel. However, in the past two years, that trend appears to be reversing. According to FAA statistics (Figure 1), the number of airline passengers is approaching pre-9/11 levels.

Preliminary data for 2005, which has not yet been officially released at the time of this writing, is expected to show that the number of airline passengers boarding flights this year exceeded the 2000 figures. This data succinctly demonstrates a return to �business as usual� as more and more organizations put their employees back on the road. The technology available allowing these mobile workers to stay in touch with the home office has not changed substantially since 2000. However, the amount of workers using it has grown exponentially. While specific data on the business usage of cellular technology was not readily available, overall growth in cellular subscribers in the U.S. has nearly doubled since 2000 (Figure 2).

The tremendous growth in the number of subscribers has been accompanied by another growth in the type of technology being employed by these subscribers. From 2001 through 2003, the sale of Personal Digital Assistants (PDA�s) was growing at an astonishing rate. It appears as if each independent mobile worker felt the need for the PDA. In late 2003, a steady decline in PDA sales was noticed. What caused this sudden downturn? The most probable cause is the introduction, and really the perfection, of, the SmartPhone � a PDA-based cell phone combination unit. Since its introduction, sales of straight PDAs have seen a steady decline, while sales of the smartphone have skyrocketed. This logical innovation has caused the mobile worker to be significantly more productive, from more diverse locations, thereby freeing them up to travel, while remaining in touch with the home office more easily. This type of approach makes predicting the cost of communications difficult at best. One anecdotal example is of a mobile worker who spends approximately 50% of his time on the road. The company purchased a cell plan that allowed for 2,500 minutes for $89.99 per month. Due to the fact that only certain calls �qualify� for inclusion in the minutes, and additional �roaming charges� are now subject to the monthly fee, the monthly bills for this employee were running in the vicinity of $195 to $325. This kind of cost overrun, when multiplied by a large number of employees, has a negative impact on the company�s bottom line.

The variability in the current billing schemes of cellular providers has many organizations and their employees wondering just what it is they should be paying as compared to what they see in their monthly bill. In an April 2006 survey performed by the Pew Research Center, it was found that 36 percent of cell phone users admitted to being shocked by their monthly cell phone bill. While this may be difficult for personal users, it can be devastating for small businesses.

So how can the savvy business control these costs while offering adequate communications to its mobile employees? The answer is by deploying Dual Mode Multi-function handsets to those workers who must travel on company business. These devices use a combination of standard GSM cellular technology coupled with VoIP via high-speed wireless LAN connections. This combination allows the user to �switch� between access methods and save money by using the fixed fee VoIP connection whenever a wireless access point is available, but offers standard GSM cellular connections when necessary.

Growth of WiFi (News - Alert)

One phenomenon that makes the usage of Dual Mode handsets viable is the explosive growth of WiFi throughout the world. Current estimates (and estimates are all that can be made due to the ease of WiFi deployment) put the growth of wireless access point deployment at nearly 145 percent annually. In reality, unless a project were undertaken to drive around and identify all of the access points in every city, no one can really know how many WiFi access points are in use today. In New York City, a non-profit organization did just that. The actually drove the streets of Manhattan using Global Positioning Satellite (GPS) technology as a means of mapping the location of every WiFi access point on the island. The data revealed some interesting things about the current state of WiFi deployments.

For example:

� There are 13,707 unique nodes within Manhattan

� Of that total, 4,038 (29.46%) are WEP enabled

� There are 12,533 (91.44%) nodes below 96th street

� There are 8,251 (60.20%) nodes below 59th street

� There are 3,758 (27.42%) nodes below14th street

� The surveyors collected approximately 1,000,000 data points.

The data, gathered in the summer of 2002, reveals a great deal about the growth of WiFi up to that point. Admittedly, Manhattan is a much more sophisticated environment than many smaller municipalities and, therefore, the data may not hold true for all areas. Interestingly enough, it reveals a large number of publicly available WiFi hotspots that should only grow over time. As more and more jurisdictions come to terms with providing publicly available WiFi services to their constituents and the commercial vendors such as T-Mobile and Verizon (News - Alert) continue to expand their offerings, the ability of a Dual Mode Handset to connect to a publicly available access point will dramatically increase. As a matter of fact as of June, 2006 T-Mobile alone had 22,799 WiFi hotspots deployed worldwide, including some concourses in 135 airports and all the concourses in 88 of those airports.

In short, as the growth of publicly available WiFi continues, there will be less of a reason for a Dual Mode handset to switch to cellular mode, thereby saving the company from incurring minute charges.

Is Security a Concern?

One of the issues brought up by those who wish to limit the growth of both WiFi and VoIP technologies is that of security. They are concerned that sensitive information will be revealed during a VoIP conversation as hackers sit in a darkened room listening in on all the calls. While this may make for a good movie plot, reality is quite a bit different. First of all VoIP has access to the same security methods available to any data flowing across the Internet. As just another �payload� on the Internet the handset has the ability to be deployed using the WLAN�s existing Wireless Encryption Protocol (WEP) 64 or 128 bit encryption or is WPA 802.tx compatible as well. Once the call reaches the �home� VoIP system, all of the existing security measures are in place as well. These include Virtual Private Network tunnels and network firewalls. In the final analysis, it is essential to note that all available security measures can be employed to protect the conversations of the mobile handset users.

One last word on security�while there are a number of individuals who like to dwell on what is possible, those of us responsible for the practical implementation of technology look at what is probable and base our risk assessment off of that information. Many things are possible, but the majority of them are simply not probable in today�s world.

Where will this all lead?

When we look at the overall capabilities of the Dual Mode SmartPhone a larger picture begins to emerge. The handset has, as we have said, the ability to connect to either GSM or WiFi networks, but it has the features of a standard Personal Digital Assistant (PDA) as well. This provides features such as calendar and schedule management, alarm clock, voice recorder, currency converter and others, which are tremendous assets to today�s mobile worker. Additionally, it has the ability to seamlessly switch between VoIP and GSM, without dropping the call, and includes all of the phone features, such as call waiting, call forwarding, three-way conferencing, and others, that we have become accustomed to on most phones today. Where will this all lead? Really it is possible that only the engineers truly know, as they design the next generation of devices.


In business today, surprises should only be welcome at birthday parties, and certainly the CFO wants no surprises in the accounts payable department. In the past, the cost of providing cellular services has often been difficult to predict or control, but with a mobile workforce, corporate decision makers, mobile workers, and managers have had little choice in the matter. Having reviewed all the data, and analyzed all the technology, it is clear that VoIP generally, and Dual Mode handsets in particular, offer organizations a significant opportunity to predict and control the cost of their mobile communications for their employees. The continuing growth of WiFi will only improve the overall situation as the VoIP mode will be more available, and a day may even come where the Dual Mode handset is only required to switch to GSM in more remote locations. The advantages of the Dual Mode handset are obvious, the challenges are shrinking, and all in all the future of this technology is abundantly clear. IT

Ilkka Pouttu is vice president sales and marketing for Paragon Wireless (News - Alert). For more information, please visit the company online at

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