IP Democracy: Is Voice-Over-Wi-Fi a Mobile Carrier Killer?

The New York Times’ Matt Richtel today has a top-notch summary of the emerging voice-over-Wi-Fi business. Skype, EarthLink, Cisco are among the major communications companies and suppliers that are pushing this new technology, which promises to upset the apple cart for traditional mobile voice providers.

But some of the traditional providers aren’t going to let this low-cost, margin-threatening development just steal away lucrative business. Cingular Wireless and T-Mobile, for example, plan to jump on the still-iffy Wi-Fi voice bandwagon early.

Cingular Wireless plans to introduce phones next year that will allow people to connect at home through their own wireless networks but switch to cell towers when out and about.

Later this year, T-Mobile plans to test a service that will allow its subscribers to switch seamlessly between connections to cellular towers and Wi-Fi hotspots, including those in homes and the more than 7,000 it controls in Starbucks outlets, airports and other locations, according to analysts with knowledge of the plans. The company hopes that moving mobile phone traffic off its network will allow it to offer cheaper service and steal customers from cell competitors and landline phone companies like AT&T.

“T-Mobile is interested in the replacement or displacement of landline minutes,” said Mark Bolger, director of marketing for T-Mobile. Wi-Fi calling “is one of the technologies that will help us deliver on that promise.”

One of the biggest stealth proponents of voice-over-Wi-Fi, not mentioned in the piece, is the cable industry. Cable operators don’t currently have mobile voice businesses that would be at risk from voice-over-Wi-Fi and the industry’s R&D arm is looking closely at fixed-mobile VoIP options. Moreover, a group of top operators have formed an alliance with Sprint-Nextel to explore a variety of new mobile applications, including fixed-mobile service that leverages Wi-Fi in the home but other technologies on the road.

Posted by Cynthia Brumfield on July 29, 2006 10:59 AM to IP Democracy