VoIP Over WiFi Will Be Disruptive

While typical arguments regarding WiFi hurting the mobile operators have focused on cannibalization of 3G Data traffic, a more disruptive effect is likely to be the impact Wifi has on Voice Traffic. Now, I’ve never been a believer in ubiquitous WiFi coverage or the concept that ?hotspots? will someday blanket the US: I believe in the L in WLAN. However, there are many factories, warehouses, and office campuses in which WiFi is deployed, and workers at these local facilities can use WiFi instead of cellular phones for mobile connectivity within the campus. Such handsets and solutions exist already, and they do reduce the demand for cellular. If hybrid handsets emerged that were capable of handoff between the WLAN and the cellular network, uptake might increase even more. However, hybrid WLAN/WAN terminals face certain challenging hurdles: a) WiFi is a power hog and would require a large heavy battery in the hybrid handheld, b) Adding WiFi and WAN chips and functionality increases the cost of the handheld, c) carriers generally subsidize handsets heavily, and are unlikely to subsidize these hybrid handsets, which means they will compete against much cheaper, smaller, and lighter handsets. Few consumers choose to pay more up front for savings on an ongoing basis, so this product will likely remain in the enterprise domain until cost and size factors are addressed. Thinking five years down the road, though, many consumers will have a home VoIP CLEC that rides on your broadband connection (like Vonage offers today) and also have WLANs. It would appeal to consumers to be able to use a mobile phone in the home or business to make uber-cheap VoIP calls on the WLAN, while roaming onto the cellular network for all points in between.

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