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Internet Calling May Go Wireless
As Cellphone Firms Seek to Tap In
By JESSE DRUCKER
Staff Reporter of THE WALL STREET JOURNAL
November 9, 2004
Is Internet calling going to go wireless, too?
A decision by the Federal Communications Commission today to solidify the exemption of Internet calling from certain regulations could also cause tumult in the cellphone industry. (See related article.)
With voice over Internet protocol, or VOIP, calls cost one flat rate, whether the call lasts for one minute across town or for three hours to a destination on the other side of the world.
But more cellular operators are interested in using cellphones that have Internet calling capabilities, too, via the technology known as Wi-Fi, or wireless fidelity. SBC Communications Inc. and BellSouth Corp.'s Cingular Wireless, the country's biggest cellular operator, and Sprint Corp., the No. 3 operator, are both aggressively pursuing phones that use both traditional cellular technology and Wi-Fi to place calls.
Such phones would use Wi-Fi to connect to the Internet when in range of a high-speed connection -- such as in a phone or office -- but then use cellular technology when out on the street.
In July, Motorola Inc. said it would start selling the first phone combining the two technologies. Although Motorola didn't say which carrier would offer the handset, that phone uses GSM cellular technology, which is the global cellular standard. That standard is used by only two national carriers in the U.S.: Cingular and T-Mobile USA Inc. Motorola says it has already started selling the Wi-Fi and GSM phone to its partner Avaya Inc., which will sell it to corporate customers.
The calls are appealing to customers because calls within the Wi-Fi "hot spot" may not count against a customer's allotment of wireless minutes. Roughly one-third of all cellular calls are placed in either a home or office in easy range of a Wi-Fi hot spot, according to a survey by the Yankee Group, a technology consulting and research firm.
Such phones could reduce use of traditional paid cellular minutes, but telecom providers are betting that the reduction in paid minutes will be made up for by a reduction in customer turnover and lower customer acquisition costs. Wi-Fi technology also can improve calling quality inside of buildings for less money than traditional cellular-network upgrades. |
