Wi-Fi Phones: Hold The Hype
By Carlo Longino, Thu Jun 19 13:30:00 GMT 2003

Lots of people are going batty over Wi-Fi phones. What's the big deal?

The popularity of Wi-Fi networks has taken off like a shot. People feeling burned by the absence of 3G in most markets are hailing networks based on the standard as a competitor or even a replacement for 3G networks, and with the recent device announcements by Cisco and others fuelling the latest hype that voice-over-WLAN will allow them to make 3G irrelevant, even before its widely deployed.

Now just hold on. While these Wi-Fi phones may be well-suited for very specific commercial uses, they hold little relevance as general consumer devices. They don't fill any specific need, nor would they really accomplish anything that's not already possible, and there are tons of billing and service issues that need to be resolved.

What's the Point?

First and foremost, what's the point of having a hybrid Wi-Fi/mobile phone? Solutions today already offer everything such a device could.

Mobile carriers and device manufacturers have voice communications down pat. They've blanketed much of the world with coverage, offering advanced features and call quality to rival traditional landlines, and mobile devices and service can generally be had easily and cheaply. To think that Wi-Fi hotspots can pop up quickly enough to create networks widespread enough to be useful for voice coverage is both technically and financially na´ve.

As far as high-speed data, readily available, inexpensive Wi-Fi cards are being used by millions worldwide in their laptops and PDAs, negating the need to tether such a device to a phone for access. "Sniffer" programs and even the built-in Wi-Fi support of Windows XP makes finding and logging on to networks quick and easy. Some would argue that there would be value in linking Wi-Fi access to a phone or SIM card to simplify billing and logins, but there are already Wi-Fi cards that accept SIMs available from several vendors, and carriers around the world (T-Mobile in the US, for one example) are bundling mobile and Wi-Fi access on one bill, simply requiring users to enter a user name and password when they log on at a hotspot.

Some would argue that this leaves phones and other mobile devices to rely on slower links like CDMA1x or GPRS, but at the end of the day, what content or services for these devices needs 11 or 54 Mbps? Sure, we'd all like to get our e-mail a little faster, but for existing mobile content, these lower speeds are fine. And keep in mind such a combo device would get the faster data rates only when it's near a hotspot, not all the time, like with the aforementioned WAN technologies.

More Questions

A number of questions dog the financial and technical aspect of these devices as well.

First off, how would pricing, billing, and access work? Say I take my trusty Wi-Fi/GSM phone down to the local Starbucks. To use my phone on their hotspot, do I still have to pay their rates of $50 a month (as much as my mobile bill) or 10 cents a minute (with a 60-minute minimum)? I guess its no problem if I'm a T-Mobile user, who, like I said before, can bundle the access since they own both the mobile and Wi-Fi network. But what happens when I go to the local, independent coffee shop that's a part of Boingo or Sip'n'Surf? Do I have to pay them too? Could I even access those networks? And how is this an improvement over the current environment?

Mobile carriers, like any decent telecom provider, go to great lengths to guarantee minimum acceptable quality of service to users on their network. How can they do this at hotspots over which they have little, if any, control? It's one thing to use VOIP on a home Wi-Fi network, where a small number of users are sharing a speedy DSL or cable-modem connection, but how can carriers guarantee QoS at a public hotspot where there may be tens or hundreds of users. Remember that most access points ratchet down data rates as a user's RF signal fades, either by congestion or other interference, or distance. So what sounds clear as day at 11Mbps might not work so well 100 meters away at 1.1Mbps.

But most importantly, the assumption that the number of Wi-Fi hotspots will continue to proliferate is flawed. Who's making money today from hotspots? They may hold value for convention centers, hotels, and airports, and perhaps drive a few people to buy an extra cup at their local coffee house, but you've got to sell a lot of $1.50 coffees (or $3.50 double mochaccino frappes, for that matter) to pay off a hotspot and a T-1 connection each month. There's a long way to go before anyone figures out how to generate decent revenues from public pay-for-access hotspots.

There are a tremendous number of technical hurdles as well, the least of which are roaming and handoffs, something the mobile industry already has going for it. Wi-Fi isn't really a mobile technology, it's a nomadic one. I can pick up and move to an area with a hotspot, but once I'm there, I can't leave without losing my connectivity - one thing that mobile networks inherently don't do. I can move from area to area on a mobile, and the network negotiates handoffs with little problem. While several startups promise their technology can handle Wi-Fi roaming and handoffs, there aren't any such systems in wide commercial use as of yet.

Not All Bad

This isn't to say that Wi-Fi phones, nor the technology, are bad ideas. I've had a Wi-Fi network in my apartment for a few years now, linking 3 PCs, some printers, and a cable-modem connection, and I use it a lot when I travel. It's a robust technology that's simple enough for neophytes to figure out, and there are a lot of great potential applications of Wi-Fi telephony in commercial markets.

Vendors like Cisco, Symbol, and Avaya are already pushing Wi-Fi devices for use with their PBX systems, and these make a great deal of sense in places like hospitals, retail stores, warehouses, and so on. Fitting a corporate campus with a Wi-Fi network and giving employees Wi-Fi PBX extensions is a great idea, and will become a big market.

But to say that Wi-Fi phones will overtake and negate more traditional mobile devices is nothing but hype.

Carlo Longino is a freelance writer based in Austin, Texas. His previous experience includes work for The Wall Street Journal, Dow Jones Newswires, and Hoover's Online.