Now that VoIP technology has gained mainstream mind and market acceptance among many residential and business voice users, service providers and vendors are looking straight on to the next challenge: Wireless VoIP.
Combining the attractive features and pricing of VoIP with the convenience and portability of wireless seems like a natural to many industry adherents, who figure forthcoming Wi-Fi and WiMAX standards will help focus attention, interest and perhaps investment in the converged technology. They see Wi-Fi and then WiMAX-based portable phones supplementing--and perhaps years from now replacing--traditional wired and cellular technology as consumers and businesses opt for portability and, ultimately, true mobility.
However, for now and in the near future, wireless VoIP is taking root primarily in enterprise and small-business accounts as a convenient voice technology that offers limited portability in a campus-like setting. Nevertheless, a variety of vendors and service providers--including well-known technology "disrupters" like Vonage--is waiting in the wings with new product introductions.
WI-FI HANDSETS
"We see a high demand from some customers who just want a wireless device," explains Louis Holder, executive vice president of product development for Vonage, the pioneering VoIP provider that is currently beta-testing a new Wi-Fi handset. Vonage partnered with UTStarcom to develop the phone, which Vonage expects to market before year's end.
"Eventually, wireless VoIP is going to be commonplace," predicts Bill Simmelink, general manager of the VoIP Business Group for Texas Instruments. "The ramp-up is just about to occur." Simmelink adds that TI already is developing about half a dozen wireless VoIP handsets for enterprise applications.
"We are seeing a lot of demand for wireless VoIP services," says Dave Williams, vice president of products, markets and systems with NextWeb, a Fremont, Calif.-based fixed-wireless business ISP. In mid-April, NextWeb launched what it billed as the nation's largest deployment of VoIP services over a pre-WiMAX network. This month it will begin marketing wireless VoIP service to 500,000 small and mid-size businesses in more than 175 cities in California, its main service area.
The fledgling wireless VoIP industry is bracing for many more such service offerings. A recent study from Infonetics Research estimates that Wi-Fi VoIP handset revenue totaled $45 million in 2004 with 113,000 units shipped worldwide. Revenue and units are expected to grow sharply through 2009 as more enterprises deploy voice over wireless LANs (VoWLAN).
CELLULAR DISRUPTION
"Wi-Fi capability will eventually become a common feature in cell phones, just as it is becoming standard in laptops today, giving mobile operators a big opportunity with Wi-Fi voice," predicts Richard Webb, directing analyst for Infonetics and author of the report. He adds that wireless VoIP could end up being "a hugely disruptive technology."
Explains Webb: "The traditional model of time and distance-based pricing for voice calls will be eroded by VoIP, and as VoIP goes wireless, this will present a challenge not only to fixed-line operators, but to mobile operators as well."
Webb and other industry executives concede that a number of issues such as standards, QoS, seamless roaming across different platforms and signal range will have to be resolved before wireless VoIP can really take off. The wait might be surprisingly short. "But with vendors currently working towards standards to address these challenges, it is likely we will be at the foot of the adoption bell-curve by mid-2006," Webb says.
Some U.S. service providers aren't waiting that long.
US Wireless Online, which operates a large Internet wireless broadband network, launched a new VoIP service for the SMB market in Columbus, Ohio in March. The service is expected to roll out to customers in the company's 11-state service area that extends from Pennsylvania to Texas this year. "With business spending on VoIP expected to more than double to $10.9 billion in the U.S. by 2009, we believe our company is well-positioned to capture significant VoIP market share in our growing markets," explains Jai Bhagat, executive chairman of US Wireless Online.
Vonage's Holder believes wireless VoIP will attract a new set of small business customers to Vonage, lured by less expensive calling rates, increased convenience and VoIP's robust functionality that allows for better call management. "A lot of enterprises are talking about Wi-Fi, and the small and midsize business market will be able to get into it without the large capital expense," he says.
However, it is the enterprise user who seems most focused on wireless VoIP at the moment. Roger Sands, vice president of engineering for Colubris Networks, a Campbell, Calif-based WLAN system provider, counts more than 1,000 enterprise and service-provider customers worldwide including Swisscom, Telecom Italia, NTT-ME, Connexion by Boeing and McGill University in Montreal.
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