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WiFi Will Impact Cellcos

December 23rd, 2004 · No Comments

WSJ writes:

Each minute of wireless calling over Wi-Fi is a minute of calling not made over a cellular network. That has the potential to shake up the world of cellular calling.

Unlike a traditional cellphone call, which comes out of your bucket of paid minutes, calls over the Internet may not be counted at all. That means that if you were in your office — or eventually your home, or Starbucks or any place that has a Wi-Fi connection — you could make unlimited free calls (not counting the cost of the Internet service). That is particularly significant because roughly a third of all cellular calls actually are made from an office or home, according to a Yankee Group survey. DoCoMo’s phone will work only if it is configured with a specific corporate Wi-Fi network; you can’t just use it at Starbucks.

Already, as voice increasingly moves over the Internet, traditional land-line telephone providers are facing a threat to their core business: Internet phone providers such as Vonage Holdings are offering calling plans that in some cases are about half the price of a comparable telephone plan with a land-line phone company. Cable operator Cablevision Systems offers phone service as a free add-on for subscribers who pay for both TV and cable-modem service. Even some executives at the old-line Bell phone companies believe it’s only a matter of time before they will be forced to throw in phone calls as a free — or close to free — application on top of a broadband subscription.

The wireless carriers, currently the best source of growth in the phone industry, have so far been spared much of this tumult. That is likely to start changing with the advent of wireless calling via the Internet.

Tags: Telecom

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