Vonage Phones in Hot WiFi Plans
By Cynthia L. Webb
washingtonpost.com Staff Writer
Wednesday, January 5, 2005; 9:48 AM
Upstart Internet telephone company Vonage made its mark on telecom in 2004 and isn't backing down in 2005. The company this week said it will make chatting on the go even easier for consumers with WiFi technology, a move that could spook traditional mobile phone carriers in the same way as Internet phones are doing to the local Baby Bells.
The New Jersey-based Vonage yesterday said it will offer its customers a portable WiFi phone "that can make calls over the Internet at homes or at public WiFi hot spots. For Vonage subscribers, the phone could amount to a kind of limited-use cell phone that would cost nothing extra. Several smaller companies have introduced Wi-Fi phones in the USA at prices ranging from $130 to $750. But Vonage's move would mark the first mass-market rollout of the device at a lower price, probably around $100," USA Today reported in advance on Monday. Vonage is touting its new product and other services at the Consumer Electronics Show in Las Vegas.
"The service poses at least some threat to wireless carriers because Wi-Fi calls are effectively free, says TeleChoice analyst Daniel Briere. Cell phone calls, by contrast, eat up a monthly bucket of minutes. The company plans to roll out the phone, made by UTStarcom, between April and June," USA Today reported.
• USA Today: Wireless Net Calling Targets Masses
Red Herring weighed in on the importance of Vonage's latest move. "The device is one of the first wi-fi handsets geared for the consumer market. Vonage's announcement will hit traditional telecoms where it hurts -- in the mobile market," the news service said. "Cutting the VoIP cord is a powerful trend. Using wi-fi phones to place calls where cellular phones can't, and for a fraction of the cellular cost, is an attractive option for callers fed up with cellular's strangle-hold. Allen Nogee, an analyst with market research firm In-Stat/MDR, sees only consumer benefit with 'lowered end-user cost and higher customer satisfaction.' Until now, the few wi-fi phones on the market have been almost strictly in the enterprise market and prohibitively expensive. Companies like Cisco, Vocera, and Spectralink already sell wi-fi handsets to businesses like hospitals where cell phones frequencies clash with medical devices. But even most early-adopters won't drop $600 for a Cisco handset. Vonage and UTStarcom haven't officially priced their new wi-fi handset, but the companies say the phone will be in the range of $100. At that price, consumers might start defecting to mobile VoIP in droves." The same article concluded: "The Bells are playing it cool for now, but as wi-fi proliferates across cities and campuses, wide area wi-fi will only add to the encroachment. The phone companies will have to contend with a world where wi-fi and cellular share service on dual, wi-fi cellular handsets."
• Red Herring: Mobile VoIP's Vegas Act
Reuters had more details on the new WiFi mobile phone, the F-1000: It "would be designed to work with Vonage phone service out of the box for U.S. subscribers. The phones would take advantage of local radio airwaves on the most mainstream of Wi-Fi standards -- the so-called 'B' standard. The Wi-Fi handset can act as a replacement to traditional fixed-line phones that a subscriber might have around the house. It can also work when it is within range of any nearby Wi-Fi hotspot out of the house, according to UTStarcom." Reuters noted that Vonage and phone maker Vtech are creating a cordless phone system for Vonage's net calling service.
• Reuters: Vonage Offers Internet Users Wireless Phones
WiFi already has a fresh plume of feathers in its cap this year, especially in Las Vegas where the city unveiled a big WiFi access hub at its airport. CNET's News.com has details on some of WiFi's California dreams becoming reality: "The city of West Hollywood, home of the renowned Sunset Strip, wants to join the growing ranks of municipalities making free wireless broadband available to anyone. The city plans to choose an equipment supplier by late February. Construction of an initial network covering portions of Santa Monica Boulevard will begin soon after, and a citywide wireless broadband system could be in place in about two years, according to a request for proposals the city recently issued," CNET reported. "Like the authorities in immediate neighbor Culver City, and in cities like Philadelphia, civic leaders in West Hollywood think free broadband that uses relatively inexpensive and ubiquitous Wi-Fi wireless networks would enhance tourism, help businesses draw customers, make life easier for city employees and improve public safety."
• CNET's News.com: Wi-Fi Goes West Hollywood
In other WiFi news, a popular maker of gear to help computers and other tech gadgets work wirelessly has rolled out new products to make WiFi access speedier and expand the range of service, CNET's News.com reported. "Networking gear maker Linksys is incorporating a new technology that expands the range of its Wi-Fi products up to three times and the speed up to eight times, according to the company," News.com reported. "Linksys, a division of networking giant Cisco Systems, announced on Tuesday a new line of 802.11g products that includes a feature called SRX, or Speed and Range eXpansion."
• CNET's News.com: Linksys Feels the Need For More WiFi Speed
Going Mobile
A big theme at this year's CES show is helping road warriors, soccer moms and teens go mobile, and WiFi is taking center stage to make it happen. "Among the 1.5 million square feet of goods will be plenty based on WiFi or Bluetooth short-range wireless technology. WiFi and Bluetooth are being built into a wide array of TV sets, stereo receivers, car electronics and set-top boxes dubbed digital entertainment centers. Among the uses will be broadcasting music from a home PC to stereo speakers, or moving high-definition video from one room to a receiver in another. 'No one is going to be stringing wires anymore,' said Tim Bajarin, an analyst at Creative Strategies in Campbell," the San Jose Mercury News reported. "The consumer electronics companies will be providing hardware that will push music labels and movie studios to allow consumers to view their media anywhere they want, whether they're driving or working out, said Gary Shapiro, president of Consumer Electronics Association, which is staging the event."
Silicon.com reported on the mobile communications surge. "For several reasons, the mobile phone is set to become the most influential portable electronic device. Technology is one. While the constant improvement of every part of the modern computer seems now to have relatively little impact on the desktop, it is making a huge difference for the phone. You can now fit substantial processing power and a good deal of memory into your pocket, along with decent battery life," the site reported yesterday.
• San Jose Mercury News: CES Preview: Think Wireless (Registration required)
Wireless gadgets at the show and beyond got a preview in the Wall Street Journal yesterday. "The arrival of communications as a hot consumer application will be on full display this week at the Consumer Electronics Show in Las Vegas. Typically, the annual confab is where makers of televisions, computers, DVD players and other electronics gear strut their stuff. But this time around it will showcase how the cellphone is fast becoming the Swiss Army knife of consumer products," the paper said. "Outside the main exhibit hall, one of the largest cellphone makers, Motorola Inc., is erecting a 60-foot-high structure called 'MotoMountain,' featuring real snow and snowboarders. The display will highlight a new Motorola product built with Burton Snowboards: a ski jacket with wireless speakers and a microphone built into the hood, allowing boarders to ski and chat at the same time. Motorola also has outfitted a motorcycle helmet with a cellphone headset."
• The Wall Street Journal: Cellphones Become 'Swiss Army Knives' As Technology Blurs (Subscription required)
The New York Post picked up on Motorola's slope-friendly announcement today. "Ski resorts next winter will be a lot noisier and folks just might be asking the jacket behind them on the lift to tone it down a bit thanks to a new line of interactive gear coming from Motorola and Burton Snowboards. The gear -- a jacket, helmet and beanie cap -- will allow the wearer to enjoy music or phone calls or to toggle between the two with their Bluetooth-enabled Motorola phone and iPod wired into a padded pocket. The pocket adapter is connected to a selector on the sleeve and integrated with the phone, according to Motorola's Bruce Hauber. For the helmet and beanie cap, the wearer will listen to music through the specially equipped phone. The music will pause when a phone call is received."
• New York Post: Staid Motorola Tries Ski Wire
What? You're Breaking up on Me!
Vonage is not the only reason cell phone carriers should be worried. "More than half of U.S. consumers are less than satisfied with their mobile telephone service and give the lowest ratings to providers involved in large mergers, according to a Consumer Reports survey. Poor call quality, difficulty comparing service plans and less than helpful customer service were problems cited in a survey from the magazine's September survey of 39,000 people in 17 major cities," Reuters reported. Verizon Wireless and T-Mobile USA fared well in the survey. The San Francisco Chronicle also picked up the report.
• Reuters: Consumers Gripe About Cell Phones In Survey
Reviews like this are helping carriers look for ways to boost heir service. Just today, the Wall Street Journal reported that some 26 wireless companies and telco gear makers are taking a closer look at 3G or third-generation wireless technology and "have agreed to study the development of advanced wireless technology to greatly increase the speeds offered by wireless networks. Cingular Wireless, Vodafone Group PLC, Qualcomm Inc., Lucent Technologies Inc. and Motorola Inc. are among the companies taking part in the effort."
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