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Wi-Fi /Cellular Convergence: Evaluating UMA

You can already do voice over Wi-Fi, with Skype, the world's most popular free VoIP application. "But if you want to be mobile, you need a dual mode handset," notes Monica Paolini, founder of Senza Fili Consulting (senza fili means wireless in Italian).

The company has just issued a report on dual mode technology called "UMA and Beyond: Mobile Operators Benefit from Wi-Fi and Cellular Convergence." UMA, which stands for Unlicensed Mobile Access, is an initiative by cellular operators to ensure that handsets are designed well, according to open standards, and available for a reasonable price.

Paolini says that pricing will be very important because it will determine the rate of adoption. Battery life, she suspects, will also be very important. "It has two radios, so by necessity it has a diminished battery life compared to a GSM/GPRS phone. The question is whether the battery life is acceptable or whether you have to go around carrying a charger."

For UMA in particular, price will be key because the UMA group has chosen to target residential rather than business users. "I found this surprising. You would think that the target would be enterprises and hotspots, but UMA is aimed at the residential market."

She says it's not unreasonable. When handsets become generally available, which she predicts will occur in 2006, she expects there to be a real demand for the service. "In the U.S.," she says, "cellular coverage at home is poor. It is not unusual to have no cellular coverage at home."

Once the mobile operator sells cell phone service into the home, the operator will want the customer to have an access point that can handle QoS issues, prioritizing voice packets. Access point manufacturers would benefit from this, if it happens.

And the ISPs

Will hotspot owners benefit from UMA? In general, Paolini thinks not. The one cellular company that also owns a lot of hotspots is T-Mobile. "I've been looking at where people make calls, in terms of usage, and people are not going to drive to Starbucks to make a phone call," she says. "Typically, they have a lot of minutes. It may be attractive for someone who's making a long, business-related conference call, but typical calls on a cell phone are not long. Few of us do conference calls. Of course, it may be a good selling point to the consumer, and those subscribers who do use it will like it."

She says that it would be particularly valuable to the jet set. "If you're traveling internationally to Europe or Japan, you would use it. Japan is more interesting, because there you can use your GSM phone at a hotspot and nowhere else. You can use your GSM phone in Europe, but for a price. You might need to pay 10 Euros to use the hotspot, but the alternative would be to pay $1 per minute for your phone call to the United States."

The opportunity for ISPs may be limited. Large last mile operators could work with mobile providers to provide QoS for the mobile operators' subscribers, but the mobile companies may also be competing with the broadband providers.

She suspects that some WISPs will be able to differentiate their service by offering QoS. "If you used the early VoIP services, like very early Vonage, you know what VoIP is like without QoSS. It would be interrupted by your own traffic. You see a 5 MB e-mail start to download, and you'd know your phone call was about to be cut off." Sounds like something people would pay to avoid.

Companies respond

Of course, Vonage and even the fixed line divisions of the RBOCs are preparing for this threat. Our colleage Joe Laszlo, senior analyst at Jupiter Research, points out that Vonage recently announced plans to offer a Wi-Fi phone. An article in The Feature says this might allow Vonage to compete with cellular providers.

Another colleague, Pedro Hernandez of Enterprise IT Planet, pointed out that Verizon's VerizonOne announcement is part of a big, multifaceted, IP-centric plan that could be an effective response to UMA.

As always, the only certainty in the ISP industry is that things are bound to change.

Pricing and availability

This brief overview touches on some but not all of the issues covered in the report, "UMA and Beyond: Mobile Operators Benefit from Wi-Fi and Cellular Convergence".

The report is 84 pages long, and details the standards, the approval process, and the potential markets and threats of this new technology. The report is available directly for $1,995.