The “why nots” of Wi-Fi and advantages of cellular fixed wireless

Wireless voice and data connectivity is quickly gaining momentum in the United States. Most home and business users have, to some degree, calculated the advantages of switching voice and data traffic to a wireless connection. Users are becoming more reliant on their mobile phones, thereby using their landlines less and less, and eventually seeing little need to pay for both services.

In a survey conducted in May 2004, online wireless retailer LetsTalk found that a third of Americans would cancel their local phone service if their wireless providers improved basic services and lowered the monthly cost. The two biggest reasons Americans said would push them to switch immediately were cheaper wireless minutes and better coverage. Analyst firm IDC also forecasted last year that 18 million access lines would be displaced by wireless through 2007, with 2.4 million of those as a result of number portability.

Wireless and wireline carriers are aware of this wireline replacement revolution, but aren’t exactly sure how to respond to it. The wireline carriers are sticking with a “both is best” philosophy, such as SBC- and BellSouth-owned Cingular Wireless, which offers a FastForward docking device that forwards your incoming mobile phone calls to your landline when cradled in a docking station (for an additional monthly service fee, of course). In turn, the wireless carriers are encouraging the switch to cellular.

None, however, currently offers a complete landline-like solution that includes voice, data and fax communication. This leaves carriers faced with the challenge of offering consumers a technology that bundles all the convenience, ease-of-use and functionality of their current landline, broadband and mobile connections at a price that’s less expensive than each separate service.

To tackle this issue, it’s important to define the end goal of wireline replacement--to create a wireless local loop. The “local loop” has traditionally referred to the wiring that connects an individual telephone in a residence or business to the central office of the telephone company. “Wireless Local Loop” replaces that wiring with wireless technology, so to truly refer to a wireless technology as a wireline replacement solution, it should replace all of the functionality of a wireline connection, which would include voice, data and fax.

Carriers are discovering a few seemingly competing technologies vying to solve the wireline replacement puzzle--Wi-Fi, WiMAX and cellular fixed wireless. In actuality, the technologies aren’t competing at all. All three can do voice; all three can do data. It’s a question of what the user needs, and hinges on three variables: distance, cost and what service(s) each solution replaces.

Wi-Fi is a term used to promote the use of the 802.11 standard for connecting data devices (typically personal computing devices) to a server. This technology also can support packetized voice traffic via private network VoIP transmission; however data, not voice, is the primary application for Wi-Fi. The standard still also needs to connect with the network backbone, even in a home or business setting, which may be an issue for users who want a more distant reach. The classic example is the Wi-Fi hot spot, where PC users can access the Internet at a coffee shop, hotel or airport--the connection is fast, but the range is limited to no more than a few hundred feet in ideal conditions.

WiMAX replaces the “last mile” wiring and provides voice and data, just like the cellular network. An advantage to WiMAX is its speed, though 3G cellular rates are now approaching those same speeds. One puzzling aspect of WiMAX is that it appears to duplicate what the cellular industry already has in place, approaching the market from the high-speed data angle and fixed applications. Cellular is clearly mobile, but can work equally well in a fixed environment. As a new technology, WiMAX will take some time to achieve the ubiquity that cellular already has. Furthermore, it may never achieve the volumes that cellular has and the resulting cost advantage. In any case, WiMAX is not here yet and features such as high quality voice won’t be available for some time.

Cellular fixed wireless is the lesser known of the three technologies, but is actually the only one of the three that truly serves to replace the landline connection completely. It uses a fixed wireless terminal (FWT), also known as a fixed cellular terminal (FCT), to connect ordinary telephone equipment, fax machines and data modems to a cellular wireless network via an ordinary RJ-11 phone jack. The FWT emulates the telephone company, providing loop current and signaling over the tip and ring pair. This technology addresses what is sometimes referred to as the “last mile” because it actually replaces the landline phone connection and uses the wiring within the home or business to make all of the phone jacks functional. The range of this technology is the range of the wireless network--20 to 30 miles in the case of cellular--and is available wherever there’s a cellular signal.

We’ve established that Wi-Fi and cellular fixed wireless aren’t necessarily competing technologies because they’re two very different ways to replace differing wireline traditional services. However, the top reason home and business users choose to replace their landline is cost--why have a wireline when wireless will do? Therefore, users may place more importance on cost than voice service, data connection range and the ability to use standard phone/fax/PC equipment, so it’s a necessary comparison.

Although it’s difficult to assign hard dollar figures to a cellular fixed wireless connection vs. a Wi-Fi connection (due to cellular service packages and equipment variables), it’s easy to see that less equipment is required for cellular fixed wireless as compared to Wi-Fi (see Figures 1 and 2 below). With cellular fixed wireless technology, users don’t have to invest in new technology-enabled equipment because the FWT connects directly to standard home and office equipment.

In addition, cellular fixed wireless technology replaces the actual connection to the phone company, rather than just wires as with Wi-Fi. This enables users to purchase one cellular service package that covers their fixed voice and data, as well as mobile phone use. So in effect, cellular fixed wireless combines the user’s ISP subscription, wireline service and mobile service into one manageable, affordable package with a single phone bill.

As for wireless carriers, there are no large (or small, for that matter) investments involved with cellular fixed wireless. The cellular technology and base stations are already in place, so it’s virtually a free service enhancement that encourages the use of additional cell minutes.

The final question on the minds of all parties involved is stability. Wi-Fi is known as a stable data solution, provided the user is within hot spot range. Cellular, while improving, still has issues with dropped calls and coverage gaps in many areas.

Fortunately, because cellular fixed wireless connects to the cellular signal through a fixed point, dropped calls and coverage gaps are not an issue. There may be areas where cellular service is weak but simply affixing a secondary antenna to a strong signal point in the home or business solves this problem. This feature also enables phone access to remote areas where regular copper lines are not available, or are too expensive to install, once again solving the last mile obstacle.

Wireless carriers are poised to offer home and business consumers a cellular fixed wireless solution that solves both voice and data connectivity at a much lower cost to the carrier and user than with Wi-Fi technology. While Wi-Fi technology requires users to purchase Wi-Fi-enabled equipment and a separate service subscription, cellular fixed wireless technology enables users to connect to the entire cellular network using the same telephone, fax and computer equipment used with landline connections, and bundle that plan with their mobile phone usage. The beauty of cellular fixed wireless is that it uses technology and infrastructure that’s already in place and widely used.

A cellular fixed wireless solution also offers much more functionality than Wi-Fi. Wi-Fi technology is best suited to provide high-speed data connectivity in a 100-to-200 foot hot spot, whereas cellular fixed wireless can be used anywhere a cellular signal is available Wi-Fi is designed to manage data, whereas cellular fixed wireless is voice and data capable. Wi-Fi is replacing wires, whereas cellular fixed wireless replaces the connection to the landline phone company.

Since cellular fixed wireless devices emulate the ILEC connection for home phone lines, they offer the same or equivalent services transparently. They can connect fax machines, PCs, alarm panels and analog modems (including Tivo and satellite receivers), just like the phone company. Many devices can even support data standards ranging from GPRS and EDGE to CDMA2000 1xRTT and EV-DO, to achieve high-speed data transmission. The devices look like an additional cell phone to the cellular network and can be bundled with the mobile service package for as little as $10 a month. These products have been available in the U.S. for some time and are now being evaluated by several major wireless operators for nationwide wireline replacement programs.

By offering cellular fixed wireless service as well as mobile service, a wireless network operator can use its existing infrastructure and capture a larger share of a household’s communications spending while at the same time reducing the potential for churn. Once customers have satisfactorily consolidated their communications needs with a single supplier, they are less likely to switch without a compelling reason.

Jeff Krevitt is senior vice president of marketing at Telular Corporation. He can be reached at jkrevitt@telular.com.

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