Why Cellular Operators Should Embrace WiFi Technology
Kyocera Wireless' Atul Suri dispels three common myths that surround cellular/wVoIP convergence.
According to In-Stat's latest consumer report on wireless phone trends, over 4 in 10 consumers are very or extremely interested in buying a cell phone equipped with WiFi, for both voice and data. With all the hype surrounding wireless VoIP (wVoIP) and the threat it may pose to operator revenues, it's easy to understand why many have yet to jump on the WiFi bandwagon. To help operators understand how dual-mode handsets offers them more opportunity than opposition, let's dispel a few myths that prevent operators from integrating WiFi into their service offerings.
MYTH #1: Operators believe WiFi services will erode cellular service revenues
For a wireless operator, gross margins on cellular plan minutes are eroding, and yet network traffic is increasing, which implies that cellular voice minutes are truly becoming a commodity. If carriers could offload some of that traffic to WiFi networks, at a lower cost, while maintaining ARPU, it would result in higher gross margins. In this scenario, even though the carrier does not control the WiFi radio network, they control which WiFi access points the handset can connect to, via a provisioning client that allows them to maintain existing ARPU. Our research indicates that bundled services ARPU, which include dual-mode roaming, may be as much as $30-60 per month higher, based on addressing new market segments for wireless operators, such as fixed-mobile convergence, hotspots services and so on.
MYTH #2: Dual-mode technology is not quite ready for prime time
Recent announcements by Vonage and mobile operator Sprint give clear indication that operators' concerns about converged services readiness may finally be declining. Network trials lend further indication that the technology is ready for deployment. From a handset perspective, we are doing our part to address the key technical issues that come up while discussing the addition of WiFi to a cellular device.
QOS (Quality of Service) - Poor voice quality is the concern operators raise most frequently about wireless VoIP and dual-mode services. Efficient codecs beyond G.711, such as EVRC provide an immediate handset solution that depends on media gateway interoperability in the network. For the initial use cases, there is sufficient QOS being built into WLAN chipsets, such as WMM profiles (part of 802.11e standards) that support priority scheduling mechanisms adequate for offering VoIP and simultaneous data services.
Security - WLAN chipsets today support WPA, which is a vast improvement over WEP, the initial security standard for 802.11x. In the near future some of the same chipsets' firmware may be upgraded to WPA-2 which supports advanced modes of authentication and is part of the 802.11i standards for security.
Battery Capacity - The WLAN subsystem offers a number of low power modes that are programmable, which allow efficient power management by the handset. Battery capacity, then, becomes a function of the WiFi use case and the applications supported. In our experience, we expect only a 10 percent to 15 percent degradation in battery capacity/performance compared to a feature rich CDMA handset.
MYTH #3: VoIP is only for early adopters
With more than 130,000 small and medium enterprises adopting VoIP in the US alone, and over 35 million registered Skype-client users with over 100 million Skype clients downloads, the acceptance of VoIP as a viable alternative to traditional telephony, is less questionable. We have "Crossed the Chasm" of users necessary to make VoIP a mass-market technology and solution.
So as consumer awareness and acceptance for wVoIP continues to grow, wireless operators could emerge as the biggest winners, but only if they act quickly. By outlining future dual-mode plans for consumers, operators can thwart new competition, and improve customer satisfaction, loyalty and retention.
Atul Suri is senior manager of business development for Kyocera Wireless.