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Q: Mobile VOIP -- will it eat into the cellular market? ( Answered,   0 Comments )
Subject: Mobile VOIP -- will it eat into the cellular market?
Category: Business and Money
Asked by: eclose42-ga
List Price: $30.00
Posted: 19 Oct 2006 11:15 PDT
Expires: 18 Nov 2006 10:15 PST
Question ID: 775076
What?s the future of voice-over-IP on mobile devices (particularly
PDAs and dedicated "VOIP phones")? I've read a couple of articles
about this topic, and reviews of some of the new PDAs and dedicated
phones that use access points to provide Skype-like telephony, but do
these have a future? In particular, will there be enough
infrastructure (and a willingness to provide bandwidth) for these to
ever replace a significant number of cell phones?
Subject: Re: Mobile VOIP -- will it eat into the cellular market?
Answered By: keystroke-ga on 19 Oct 2006 13:38 PDT
Hello eclose42,

Thank you for your very interesting question!

The answer to this is yes, there will be a significant market, but not
for a long time and possibly not as much as some would have you
believe. And not with WiFi.  The revolution will come with a different

There are a few variants of this technology that are being worked on.
Obviously, VOIP on mobiles would cut out cell phone providers
completely and they do not want that to happen, so they're developing
their own technologies in this area.  Many GSM carriers (Cingular,
T-Mobile) are implementing phones that are Bluetooth- and WiFi-enabled
and will allow your calls to be carried on a WiFi network when
possible (possibly using less minutes than a regular call and usually
only on WiFi already owned by the carrier) and then switched to the
proprietary phone network when out of reach of WiFi.  This will serve
two purposes: the cell phone carriers can get in on the technology
first and also come out with a line of brand-new WiFi-enabled phones
that everyone will of course have to buy, so they can participate in
the WiFi scheme for better service (and be able to possibly use the
internet for free on their phones). This is the method that is closest
to being implemented.

However, the second method carries the possibility of completely
wiping out cell phone companies as we know and need them, and that's
what has them running scared. It's not about WiFi at all.

See, WiFi is popular now, and WiFi-enabled phones will probably make a
pile of money for those carriers. But at some point in the
not-too-distant future, WiMax (a very high speed version of wireless
Internet) will be rolled out. One node can power an entire town, from
10 to 30 miles, as opposed to the current situation where you need to
have many different WiFi "hotspots" to cover a large area. WiFi is not
powerful or that high-speed, but WiMax is-- it is similar to broadband
capability with its speeds.  WiFi simply will not be able to handle
VOIP calls reliably on a mass basis, but WiMax should be able to.

When WiMax takes over from WiFi, projects such as Skype will be able
to set themselves up to be used on WiMax networks from people's
computers, PDAs and cell phones, which may replace cell phones as we
know them today.  Instead of using cell towers, you'll be switched
from one WiMax node to another.

Here are some Slashdot stories on this subject:

"VOIP Cell Phones Coming Soon"

" Forget about Wi-Fi VoIP, Vonage going WiMax"

" Signal Handoff Could Mean Roaming VoIP over WiFi"

" WiMax: When, Not If"

"Complete Guide to WiMax" (pdf)

It seems likely that just as VOIP has entered the realm of the
landline, it next will take on the cell phone. However, this does not
come without costs and it does not mean that cell phones and landlines
will be completely cut out of the picture.  Right now, there are 200
million landlines in the US and 2 million VOIP lines. VOIP is not
completely replacing the POTS (plain old telephone system) yet. WiMax
may help, though. Some areas will not have WiMax set up (just as they
do not now have WiFi access, although it will be easier to just set up
one WiMax station for a much larger area than WiFi) and if they do, it
may take years. WiMax is being particularly envisioned as a way for
rural areas to get Internet access when they don't have it now, so
accessibility may not actuqally be a problem. WiFi phones already
exist in England but they have dead zones from not enough WiFi access
points. Some people don't like the Internet. Some people don't like
technology. Some people are content to just use their landlines. The
cost of conventional landlines and conventional cell phones very well
might go up after this service is put in place, because cell phone
companies won't have as many subscribers and neither will conventional
landline telecoms companies.  It will be interesting to see how it
turns out.

However, the biggest difference will definitely be made with WiMax,
not WiFi.  And WiMax is not close to release and will not be prevalent
for at least a few more years.


"You see unlike that DSL connection that only goes to your house in
time devices will be able to access WiMax networks just like Cell
Phones access Cellular Networks today.  This will mean a customer can
have a high speed data connection anywhere they go (at least in areas
that have coverage) to do anything from browse the web to making phone
calls to downloading music and looking up information.

Look for both Fixed and Mobile WiMax deployments to become the next
major growth cycle in the technology industry.  Most of the other hot
technologies, Video Over Internet, Voice Over Internet and others
require high-speed access.  In the next ten years those who control
the WiMax highways will become the next giants of our industry."

Addtional sources:

"Future is Ripe for WiMAX VoIP"

Intel on Wimax

Wikipedia entry-- WIMAX

Search terms: wimax voip cell phones
wimax voip

If you need any additional clarification, let me know and I'll be glad
to assist you.


Clarification of Answer by keystroke-ga on 22 Oct 2006 13:15 PDT
Hello eclose42,

These articles might also be of interest to you:

(You can go to the Ecomomist's front page at and watch
an ad to get access to the subscription-only articles.)

"The end of the line: Traditional fixed-line telephony has had its day"

"Home and away: After many false starts, fixed and mobile phones are
getting ready to merge"
Oct 12th 2006
From The Economist print edition

These focus on some of the issues I outlined in my answer and are very interesting.

Search terms: "the end of the line" "home and away"

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