Wi-Fi FINDS ITS VOICE

The recent shutdown of Cometa Networks must have been music to the ears of anyone who predicted that Wi-Fi technology would prove to be an over-hyped flash in the pan and that Wi-Fi wholesale operators would never succeed.

But those curmudgeons who celebrated the demise of Cometa a few weeks ago likely will find their self-satisfaction short-lived. If anything, this one company's setback seems to have energized the Wi-Fi community and lit a fire under the companies trying to make the Wi-Fi business work — including carriers. It also has helped bring into the open — and possibly even accelerate — some of the ambitions that service providers and vendors have to integrate mobile and Wi-Fi worlds, ironically with voice as the killer app. While this integration does not have any near-term realistic potential from a network point of view, integration at the device level that allows for seamless roaming could be a commercial reality within months.

For now, the Wi-Fi community, and especially the wholesalers that are working with carriers as resellers, are in the mode of reassuring the rest of the telecom industry that Wi-Fi didn't live and die with Cometa.

“There is still room for a few different models in this business,” said Todd Myers, CEO of Airpath Wireless. “Are the numbers of companies dwindling? Yes, but service providers still will have plenty of options for companies they can partner with to be in this business.”

Many people in the Wi-Fi community, most notably officials from Boingo Wireless, iPass, Wayport and Airpath Wireless, have pointed out in recent weeks that Cometa's demise had more to do with the fallibilities of one company than the model. The challenge now from a carrier point of view is sorting through the remaining wholesalers to find the model that works best for them.

For SBC Communications, the choice was Wayport, the largest of the independent Wi-Fi hot spot operators. The telco announced a reseller partnership with Wayport last year as the foundation for its FreedomLink service, and just two weeks ago expanded that relationship with an agreement to allow FreedomLink users to roam at hot spots that Wayport plans to build in thousands of McDonald's restaurants during the next four years.

In the last two years, Wayport and Cometa might have seemed to telcos like the only Wi-Fi wholesaler worth partnering with — thanks to the sheer scale of the former, and the sheer ambition of the latter — but Airpath Wireless is eager to show telcos they might have missed something.

Airpath is a clearinghouse of Wi-Fi roaming and settlement services for service providers. The Seattle-based company also manages the Airpath Provider Alliance, a collective of independent Wi-Fi hot spot operators and venues from around the world. That means that any service provider partnering with Airpath gets the benefit of many more Wi-Fi venues than any one operator could build without breaking its own bank. Airpath is hoping to have 15,000 hot spots in more than 23 countries as part of the provider alliance by the end of this year.

Meanwhile, for service providers, the Airpath Provider Alliance manages all the roaming agreements, clearing and settlement. Myers calls this approach “brokering.” Instead of having the risks associated with building its own Wi-Fi properties, Airpath draws from the deepening pool of hot spots around the world.

Myers' firm isn't the only Wi-Fi operation that is experimenting with form and function. Wayport recently shifted to an economic model that draws regular flat payments from its roaming partners, and from hot spot venues. T-Mobile, which runs the only telco-affiliated hot spot builder operation, also is building new hot spots, while lowering access prices.

These companies are finding out what they have to do to make the Wi-Fi business work, said John Yunker, Wi-Fi analyst at Byte Level Research. He thinks the trend toward free Wi-Fi access for users as an amenity to a hot spot venue's core business could further shake up the market for hot spot operators that want to build and control networks of Wi-Fi hot spots.

“Things will get real interesting. What if a major competitive retail chain does a free Wi-Fi model right out of the box?” Yunker said. “I believe that Wi-Fi is headed to ‘free’ fast.”

The free-service trend might further befuddle traditional telecom companies that aren't used to giving things away, but the new inclination to bundle services will serve them well in the Wi-Fi business. Free Wi-Fi service “will be hidden in the costs of a core service, like cellular or cable,” Yunker said.

Meanwhile, on the wholesale end, Airpath's strategy might offer a hint at what's to come in the post-Cometa era: Not even a company backed by three industry giants — Intel, IBM and AT&T — could create the scale to dominate as a Wi-Fi hot spot builder, so why try?

“We always have had an understanding that no one company could build or control an entire Wi-Fi network that met the coverage needs of everyone,” Myers said. “We can afford to take a neutral stance on which Wi-Fi venues are successful.”

That stance also means anyone with a hot spot can join the Airpath Provider Alliance, a concept that flies in the face of the idea that Wi-Fi hot spot operators need to battle each other for the right to build hot spots in premium locations. So, while wholesalers like Wayport and T-Mobile fight it out for construction bids, Airpath can sit back and collect.

“You can accomplish what Cometa wanted to do,” he continued. “It just takes a lot of money to be able to do it,” Myers said. “We'll have 15,000 hot spots by the end of this year. The difference is we didn't pay for any of them.”

While Airpath has stepped forward to present itself to carriers as a potential new partner with a new model, the Wi-Fi business continues to change, stretched in different directions by new influential forces on an even more rapid basis than anyone might have expected. The latest of those forces is voice, a strange new visitor for Wi-Fi players, but an old friend of telcos that is suddenly being appropriated for use in non-traditional service environments.

Though voice over wireless LANs so far has been isolated to vertical deployments, that trend could represent a shift in how wireless LANs are used. By 2008, wireless LAN access devices with voice compliance, such as handsets, are expected to exceed the number of Wi-Fi access devices that are data only, according to Allen Nogee, senior wireless equipment analyst at InStat-MDR.

That might be a startling notion for potential providers of Wi-Fi voice-over-IP services, which might feel they would be hard-pressed to find a broad choice of such devices in the market right now. So far, a few specialists, like SpectraLink and Vocera, have produced gear for early adopter markets such as hospitals where cellular technology can't be used.

But the tide is expected to shift quickly to development of integrated mobile/Wi-Fi devices that will allow users to roam seamlessly between wireless LAN and cellular environments. There are challenges to creating such devices, which require two discrete radios that draw more power from a handset than just one of the services would, but some big-name vendors have gotten involved to solve these problems.

One of the most anticipated offerings will come from Proxim, Motorola and Avaya, the three vendors that aligned in early 2003 to develop an integrated mobile Wi-Fi architecture and accompanying phone for corporate enterprise campus environments. In addition, Hewlett-Packard is planning to unveil a PDA with Wi-Fi voice capabilities later this year. Nokia also has developed an integrated phone, and other handset-makers are said to be in the first stages of their own developments.

“This is a market evolution that we eagerly await,” said Ben Gibson, vice president of marketing at Proxim. “We're encouraged by the early growth of [voice for wireless LANs], and we think this next step will enjoy long-term growth.”

Details of the architecture and the device are not expected to be unveiled until later this summer, but the partners reportedly have solved the potential power consumption and architectural issues through laborious technical trials.

Gibson said the partners see Fortune 100 and Fortune 500 customers, rather than mainstream consumers, as being the users that will drive mobile/Wi-Fi integrated usage because they already work on large corporate campuses that probably have some Wi-Fi coverage. The partners will turn these disparate deployments into managed voice environments seamlessly connected with the outside world.

“With voice, you need broader Wi-Fi coverage all over the corporate campus and centralized management, and our architecture will address that,” Gibson said.

Centrally managed voice service sounds like something that would be the domain of traditional telecom carriers, but Gibson doesn't think carriers will be involved in the early phases of mobile/Wi-Fi voice adoption.

“We think it will evolve a lot more like voice over IP, with the carriers following later on rather than leading the trend,” Gibson said. “Eventually carriers will become intrigued because they will realize that they can bundle these Wi-Fi services the way they are learning to bundle other services.”

There are some industry watchers who also believe that carriers will be slow to adopt integrated mobile/Wi-Fi voice for the same reason they might have been slow to get into the Wi-Fi business — usage of hot spots potentially means minutes of wireless usage occurring off their core networks, which is still the metric by which they largely measure their success.

Eventually, however, the mobile/Wi-Fi voice trend could have influence as more than just a competitive application and could change some of the age-old ideas about how carriers manage voice and data traffic on their networks.

“It will let users free up cellular capacity,” said InStat's Nogee. “What carriers will need are inexpensive devices and partners [with Wi-Fi technology experience].”

Companies such as Airpath and Wayport hope to continue to be those partners as Wi-Fi wholesaling expands from its current nature as a data service to also become a voice service.

Dave Vucina, CEO of Wayport, said recently that he sees Wayport's hot spots shifting to applications other than data.

“Mobile and Wi-Fi becoming more integrated will help our business,” said Airpath's Myers. “There will more devices out there, and different devices, and we just need to make sure that we can authenticate them so that partners can take advantage of that traffic.”

This article was previously published in Telephony, June 21, 2004. A portion of the article was omitted due to a printing error.