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Looking back over the last five years we can easily remember a time when VoIP and Fixed Wireless technologies seemed more like a hobby that might have some potential somewhere down the line. If we look back to the last millennium (just over six years ago) I remember the enthusiasm that was being generated by the WISP community as to how this technology might be able to capture a piece of the Internet delivery market from the traditional telecommunications giants. At the same time, I do not remember anyone seriously discussing how this technology might disrupt the voice market and specifically the Cell Phone industry - even though looking back on the subject from this vantage point I am not sure how we missed this very real potential.
If we move forward in our timeline, looking to three years ago, VoIP was now something that was being discussed but the level of discussion was more toward PC to PC calls including Skype and even though PC to Phone was a reality the only people who really seemed interested in that technology were the "early adopters" sometimes known as the "Geeks" of the world.
What we missed was that there was a quiet revolution happening, one that even the people in this field weren't paying too much attention to, a looming disruption that was becoming viable because of the combination to two very different technologies being independently introduced - the real, ubiquitous, mobile telecommunications now available over Licensed Exempt wireless infrastructure.
During the 2004 WiFi Planet show, (what a serious loss to this community losing that show was) I attended a discussion about VoIP being implemented as a communication medium in hospitals. As you probably know, hospitals have adopted wireless technologies in many applications from medication dispensing, tracking patient care and even voice communications. At the show the discussion turned to the Symbol Technologies's Netvision Phone.
This WiFi based portable phone was an interesting wrinkle in the Fixed Wireless field but seemed to only be seen as a curiosity as opposed to the earth-shaking, disruptive technology this kind of handheld would evolve into.
Even more unique was the Vocera Communications System, a Star Trek like communications badge that allowed for voice activated, hand's free, wireless communication over WiFi networks!
Looking at today's landscape we can see a number of WiFi/Cell phones now coming on the market. This move by the mainstream Cell Phone manufacturers seems to indicate that they understand and accept that WiFi is not only here to stay but needs to be adopted. But this leads to the question why?
Well, Cingular Wireless is launching a new video service that would allow paid subscribers to view the Cartoon Network (Fox News, NBC are also mentioned) and if you really like this service for an additional fee you can have access to short clips ("The Sopranos" is specifically mentioned) which bring an entirely new level to the phrase "a vast wasteland" something more true now that when FCC Chairman Newton N. Minow coined the phrase in 1961. Why anyone would want to watch the Cartoon Network on their Cell Phone is beyond me - let alone paying extra money to do so. I can reliably tell you the demand has outstripped most of the projections the Cell Phone industry made 18 months ago and this is causing some serious problems for them.
If you look at what impact delivering video over a network designed for very low bandwidth voice calls might create it is pretty easy to understand why this might be a problem. Any WISP can easily relate to what happens when their customers start demanding more bandwidth than their network can reliably deliver. This is exactly what the Cell Phone industry is looking at facing should the demand for video continue to take off on the current path it seems to be headed on. And like the standard WISP, there is only so much spectrum they can expand into - and they pay for spectrum unlike most WISP models currently in use.
Where does this leave the Cell Phone industry? Well, to answer the call for more bandwidth (as well as demand for Cell Phone service) the industry will be building a lot more infrastructure this year. As you can see from this link the telecommunications industry is once again spending money for equipment to increase both their capacity as well as their services. Verizon and Qualcomm are moving forward with their MediaFlo technology in hopes of meeting the demand by the end of 2007.
At the same time there is a different set of dynamics taking place in this industry. One has to wonder what the real impact on this industry will be due to the portable Vo-WiFi technology once citywide WiFi clouds become a reality. It seems reasonable to speculate that the cell phone providers aren't going to benefit from these large scale deployments. In fact, we can speculate that a decline in their overall revenues, loss of metropolitan customer base and a challenge to their monopoly in the mobility communications market will be occurring.
It should also be pointed out that the Cell Phone industry depends on the higher population density areas to generate enough revenue to subsidize their rural installations. If every large city deploys a WiFi cloud and these Vo-WiFi phones catch on the expected impact on the Cell Phone industry will be substantial. How much? Well, nobody really knows or can accurately project but I believe it is safe to say that this industry is not wealthy enough to take a 25% hit in their gross revenues without feeling significant pain. How much pain can they tolerate? I guess we'll find out.
Here's the newest wrinkle, courtesy of DLink, to enter this field.
Please note - this is a very different design from the inexpensive WiFi phones that can be bought in Asia or either the Vonage Phone or the Netgear Skype Phone. The DLink phone allows for the use of anyone's service instead of being tied to one name brand service or the other. The DLink phone also allows for the support of domain names - think about what that means as far as merged services
While that seems enticing you might want to know how you get service on this thing. TelTel offers service that can be used on the DLink phone and the TelTel web site offers a lot more information.
During the MuniWireless show, I spoke to a gentleman (I'm sorry, I can't reveal either his name or his company as they are not public yet) that offers WiFi phones with RFID chips built inside. Not only will his phones allow you to utilize WiFi networks to make voice calls (using his VoIP service or not) but will also allow you to pay for goods and services with the handheld device. Even better, he is in the process of finalizing the details to allow for advertising supported VoIP service for those of you willing to put up with advertising. How this service will work is that as you walk through a mall advertisers that are part of his network will feed ads to your phone. Naturally, these stores will offer incentives for you to walk in whether it is special pricing or simply the fact that they accept payment from your phone. And, for putting up with the annoyance you get VoIP service for free!
For those of you that are unaware, it is an accepted practice to pay for goods and services in Japan using your cell phone. In fact, on a recent trip I noticed a tourist who was somewhat dismayed that American airports didn't accept payment in this fashion. Judging by his demeanor he seemed to be somewhat surprised at how backwards we are here. This is something I am beginning to understand as our definition of broadband is barely more usable than dialup and many of the advanced services some parts of the world take for granted are simply not available here - yet.
I guess the real question is, why is all of this important? According to this article the US telecommunications industry (alone) was worth "an estimated $856.9 billion industry in 2005, is projected to reach $1.2 trillion in 2009" and no matter how you look at that, we are talking a lot of money here.
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