Carriers still mixed on WiFi in handsets

The value of WiFi in a mobile device depends more on the network than the chips that power the device or the applications that run on it.

It's hardly news that carriers like AT&T and T-Mobile are gaga for WiFi, while Verizon Wireless is lukewarm at best and Sprint Nextel, with its new Clearwire mobile WiMAX relationship, is a WiFi waffler.

The carriers like to control their networks and the devices that run on them but it's unlikely that kind of skewed business model will be able to exist much longer as more consumers use unlicensed spectrum to access broadband applications on any number of consumer devices, including cell phones. Even the least ardent WiFi fan--Verizon Wireless--probably won't be able to remain aloof.

"We're re-looking at WiFi in terms of customer experience. We've not made a decision on where we are with that," said Brenda Raney, a Verizon Wireless spokeswoman who repeated the corporate mantra that a powerful 3G network obviates WiFi.

The push for WiFi is led by players such as Skyhook Wireless, which offers a software that creates a hybrid 3G/WiFi environment for GPS.  But Skyhook isn't alone. It has solid support from the chip community in its belief that 3G alone won't adequately deliver for every device from every location--particularly in urban valleys and indoors--so you need WiFi to bolster the GPS experience.

Qualcomm, a chipmaker that even Skyhook CEO Ted Morgan admits has "traditionally been a little anti-WiFi," is part of the GPS community embracing WiFi.

Leslie Presutti, product management director-CDMA for Qualcomm, said the chipmaker can't afford to be anti-anything when it comes to providing a good GPS experience.

"Customers are looking for the best functionality and they want to have more ubiquity for GPS whether they're indoors or outdoors or in a challenging environment," she said. That means something that goes beyond Qualcomm's Assisted GPS (A-GPS) product even though "everyone in the market agrees (it) is the best solution for even reaching indoors today."

Verizon is so enamored with A-GPS that Raney said there is no need to adopt WiFi for GPS. "We don't have that issue," she said.

Everyone does, countered Presutti, without singling out Verizon. "A-GPS has its limitations so when there are environments where we know A-GPS just won't be able to operate to the degree that we would like it to, we start to look for hybrid or complementary technologies," she said.

WiFi, everyone agrees, is a complementary technology, even if it doesn't always draw carrier compliments.

For AT&T, which recently acquired privately held managed WiFi services provider Wayport for about $275 million in cash, WiFi is a way of life. The company leans heavily on the connecting to the unlicensed spectrum for application downloads to its iPhone and links its triple-play residential networks with WiFi.

"We want to provide ubiquitous broadband for our customers and our WiFi footprint is a key piece of that," said Jenny Bridges, an AT&T spokesperson who responded to interview requests via email. However, AT&T declined to talk about Wayport when it announced the acquisition.

Without specifically naming AT&T, Raney said Verizon's needs are different because "we have such a pervasive 3G network. WiFi is a complement to that but ... we don't necessarily need to offer it."

That's changing, even though it's probably not happening fast enough for WiFi proponents. "Verizon has traditionally been allergic to WiFi. They view it as unclean and a risk to their business," said Morgan.

The sledgehammer that's breaking down Verizon's resistance is, in all likelihood, not Skyhook's GPS system but just the full weight of the WiFi movement. To say WiFi is ubiquitous would be understating.

"There's a pretty compelling case to put WiFi in a phone. If you think about things like spectrum management and making it easy and a good experience for people to do all the multimedia on the phone ... WiFi makes sense," said Kelly Davis-Felner, marketing director of the WiFi Alliance. "Generally speaking, most carriers have come around to the idea that WiFi is actually additive to their strategy and won't cannibalize subscribers off the paid minutes."

Verizon is going to have to give in eventually, Davis-Felner deduced, even though the company's most hyped new product, the BlackBerry Storm, doesn't include WiFi.

"A lot of the coverage of the Storm really noticed that the WiFi was missing. It's a feature that's expected and people notice when it's gone," she said.

Unlike BlackBerry devices offered by other operators, no Verizon BlackBerry device is WiFi-enabled. That doesn't mean every Verizon phone is WiFi vacant; it just means the carrier is selective about the types of phones it offers with the capability, said Raney, who reiterated that 3G is enough.

"Wireless is primarily designed for mobility and that's where the company's focus has always been, people who want to take their connectivity with them," she said. "We offer customers 3G networks; they don't have to go looking for a hotspot. They pay us on a monthly basis for the service and it's a secure network. WiFi typically is not secure."