Wireless

June 13, 2003
VoIP devices coming to a Wi-Fi network near you

Andrew M. Seybold

Are we about to see the "it should be free, like the Internet" crowd start making serious noises about using Wi-Fi phones? Can VoIP devices running on Wi-Fi compete with wide-area communications, let alone replace what wired and wireless network operators provide today?

UNITED STATES -- Many think that since Wi-Fi is based on packet data, it can be used for VoIP. In fact, Symbol Technologies introduced a VoIP phone for Wi-Fi (NetVision, which has been discontinued) and there is a Cisco desk phone, the 7960IP. Now, Cisco has announced that it will be introducing the 7920 battery-operated phone for use inside companies that have deployed 802.11b wireless systems. The specifications for this phone call for two hours of talk time and up to 24 hours of standby time. The price has not yet been set. Word from Cisco is that it wants to work with a wireless wide-area phone company to add wide-area coverage to another version of this phone.

Using an existing IP network inside a company makes sense if the VoIP voice quality is good. Most large companies today have extensive wired internal phone systems that are costly. Being able to interface a VoIP phone to these systems is the first step in being able to replace expensive phone switches and make use of the existing wired and WLAN systems. All of this sounds great and as the world moves toward a digital, packet-based world we will see more and more such products.

Cisco is on the right track in developing a product to be used within the confines of a corporation, but it won't be long before we start hearing about phones designed for used in areas where there are Wi-Fi hotspots. We are about to see the "it should be free, like the Internet" crowd start making serious noises about using Wi-Fi phones to "beat" the RBOCs and long-distance operators out of revenue they now obtain from wired phone systems.

Combo phones coming soon
I am certain that we will be seeing a number of "combination" Wi-Fi and wide-area wireless phones coming to market. The idea will be to use the existing wide-area networks when away from a hotspot and to connect to a hotspot and use VoIP when within hotspot coverage. However, several issues seem to remain unaddressed. For instance, how do you receive incoming calls when you move from a wide-area network to a hotspot? Who will develop the backend infrastructure to enable these phones to work?

VoIP phones inside a corporation will become a popular way of enabling workers to become more mobile within their companies. However, I have to wonder how disruptive this type of wireless service will be. If workers took their Wi-Fi phones to meetings and answered calls, nothing will get done. If they wandered around the office and took a call from a customer, they probably wouldn't have the information they needed, as they won't have access to the corporate database. I suppose, they could carry a Wi-Fi PDA and look it up or turn on their notebook, wait for it to come alive and access the data wirelessly.

Today, that same call would simply go into their voice mail. Upon returning to their desks, they would listen to it, get the information requested and call the customer back, prepared to answer any questions. We are becoming an increasingly mobile society. However, I wonder whether we really want our phones with us when we aren't at our desks. Unlike wireless email, that just shows up on our wireless device, and we can read or handle it when we have time, a ringing phone demands that we answer it.

Toward a Wi-Fi future
We are racing toward our Wi-Fi future. It appears from all of the stuff we are reading about Wi-Fi and Wi-Fi hotspots that we won't need a wide-area 3G data system. We won't even need our wide-area wireless phones all that much -- there will be hundreds of thousands of access points. All we will need to do is to find one and we will be able to make free or nearly-free phone calls to anyone and access all of our data.

While I understand Wi-Fi within corporate walls, and even where folks gather in great numbers (airports, convention centers, etc.), I have my doubts about Wi-Fi hotspots in Starbucks, McDonald's, Borders and other places where the Wi-Fi community thinks we are going to go to access to our data and, soon, our voice traffic.

Wi-Fi VoIP makes little or no sense in a hotspot situation. In fact, it is a fallback to the days of CT2 in Europe and PHS in Japan. Both were based on voice hotspots. In Japan, especially, the service was popular among teens until the price of true wide-area wireless voice dropped and they flocked to the wide-area networks. They soon discovered that they no longer had to stand around on a specific street corner to make a call and could walk, ride in a cab or in their cars while they talked.

During the transition from PHS to PDC, several companies made phones capable of working on both systems. These were available for a short period of time, few got sold and soon, the models disappeared from the market. The idea was the same: Use the less-expensive PHS when within range of a hotspot and the more expensive PDC wide-area network when outside PHS coverage. The reality of the situation was that those who had been using PHS wanted the freedom of movement afforded them by the wide-area wireless systems and they quickly abandoned the PHS system in great numbers.

Two things are clear. First, we will see more phones like the Cisco 802.11b phone that makes use of VoIP for in-building communications. The companies that make them might actually make money in this business. Second, a number of companies will believe that we will have thousands of hotspots for Wi-Fi in the next few years and will be pushing Wi-Fi and VoIP phones to provide free or nearly-free voice communications. They will try to turn Wi-Fi VoIP phones into wide-area phones that can be go around today's phone systems and will find that it isn't that easy.

Today, if you want to use hotspots for data wherever they are, you need to sign up with more than 21 hotspot services or Boingo and about 14 other services. I don't believe for a minute that VoIP phones will make a dent in the wide-area wireless voice business. The sad part is that many companies will probably try it anyway and a number of venture capitalists will be smitten by the idea and invest millions in these firms.

An old saying
There is no free lunch. Yet, every time something like the Internet or Wi-Fi or VoIP comes along, those who believe there should be a free lunch latch onto the new craze. Remember that Wi-Fi is not really the last mile--it is the last few hundred feet. It needs a backend (usually wired) that connects it to the rest of the world. This backend isn't now or will ever be free! There is no incentive for installing one if no money is there to be made.

Not a single company that I know of would run wires, build a backend that can handle voice and data services and then give it away. Do people really expect local calling, long distance, the Internet and wireless voice and data to be free of charge? While we continue to pay more for gas at the pumps, we expect our telecom bill to continue downward until it reaches a point where it is essentially free!

There are many dangers in this type of thinking. AT&T, when it was a monopoly, built a world-class wired network with a high quality of service (QoS) and redundant back-up systems that continued to function even in emergencies. AT&T didn't have to do that, it could have cut corners and built a system that was less reliable and gotten away with it.

Today, none of the providers are building networks as robust as the original AT&T wired network. They are cutting corners and putting in as little as possible in order to provide service and make money. I am afraid we are heading toward a time when 99.999999 percent reliability of dial tone will be just a memory.

We need to be realistic and understand that if a company cannot make a profit it has no motivation to provide QoS. If we want reliable, failsafe communications -- that is what we demand and need -- we have to be willing to pay for it. When you hear the Internet folks, and now the Wi-Fi folks, talk about free VoIP that will be pervasive and put the phone companies out of business, ask yourself if you want dial tone as reliable as the Internet or dial tone that seems to be there no matter what.

VoIP devices are coming to a Wi-Fi network near you. For in-building communications, I believe that there is some benefit. However, I don't believe that VoIP can compete with wide-area communications, let alone replace what wired and wireless network operators that are making money provide today.

Picking up a phone and hearing the dial tone is something that we take for granted. There is no free lunch in spite of those who think otherwise and who will try to convince the rest of us that there is. VoIP for in-building voice services might turn out to be a great market. However, can those who want to extend VoIP to the outside world guarantee us that we will get a dial tone 99.9999999 percent of the time? When they can, we'll talk.