Inquisition - can mobile operators trash Wi-Fi voice?
All they have to do is cut prices and link to the office system.
By Peter Judge | Techworld | Published: 00:00, 02 February 2004
The potential of voice on Wi-Fi to slash mobile phone bills is the latest sales pitch for vendors to tempt wary users to put it in their offices. Ericsson doesn't see it that way: the mobile operators will easily be able to cut deals that demolish that cost-saving, says the enterprise division's marketing director.
Business mobile bills are very high and a lot of those calls are made by people in their own office. They are away from their desk, they need to make the call now, they have a phone in their pocket and they don't think of the costs, so they use that phone. Give them a handset that diverts those calls over the Wi-Fi LAN when they are in the office, say Wi-Fi vendors from Airespace to Nortel, and the savings will justify the whole LAN in double-quick time. Voice over IP on wireless LANs could (ahem) save a packet.
Surprisingly, even Nortel (whose major customers include the mobile operators) is pushing this vision. It falls to competitor Ericsson to point out what should, perhaps, be obvious: the mobile operators have been in the game a long while and they are not likely to stand still and watch the revenue go away.
"The mobile operators are actually addressing the enterprise space," says Frederic Boone, director of marketing, EMEA, for Ericsson Enterprise. And Ericsson's efforts in the area, Mobile Enterprise Advantage, are in line with what the operators are working on.
IP telephony, mobility and convergence are all important areas, says Boone. But Ericsson believes these things will grow out of the mobile operators, and developments to the office PBX, rather than a revolution from a wireless LAN. Mobile Extension, an addition to the company's MD 1110 PBX, uses the mobile network to deliver service to handheld phones but makes them act like PBX extensions. "Your mobile phone acts as an extension of the internal communications system," says Boone. "We extend mobility from the enterprise into the operator space."
"At the end of the day, people have four phones - a soft phone, a GSM mobile, a DECT phone, and a deskphone," says Boone. "Which one are they most likely to use? The mobile."
While Wi-Fi vendors suggest that voice on the wireless LAN could be a stick to beat the mobile operators with, Boone says that is likely to be difficult to integrate (indeed you can't run on voice on just any WLAN; you probably have to upgrade). "It is extremely important to bundle offers with the mobile and fixed operators," he says. "We must work within that device to make the cost come down."
He reckons that Ericsson is best placed to do that. "We have a focus on mobile operators and a data perspective on the enterprise world. We are definitely leader in the market with a huge installed base and easy access to enterprise customers. That is a value proposition towards the mobile operators," he says.
"Let's sit together [with the mobile operators] and see how we can bundle an attractive offer towards those enterprises. If we can put together a converged communication solution that includes fixed and mobile, it is a strong proposition."
Mobile operators can squash voice on Wi-Fi
Voice over Wi-Fi is more of a threat than reality, he says. There are issues with encryption and fast handovers [which the IEEE standards body is addressing]. "At the end of the day, you will need multimedia convergence to really make use of voice and data and get the best functionality." WLAN vendors could learn a lot from the history of voice on wired Ethernet, he says. The penetration of voice on Ethernet has not been that high, despite vendors offering similar cost-benefit advantages for many years. "You will see the same thing with voice on wireless LAN," he says. Voice on Ethernet started with a technology pitch, which did not even talk about the value and benefits for customer. The vendors then eventually moved on to the cost perspective, proposing the technology for voice links from the branch office back to the central site. At this point, when users are likely to sit up and take notice, the telephony companies cut rates and came up with their own offers. Voice on Ethernet remains an option, and is getting more widely installed, but the cost savings are not such a big deal. Mobile operators can do exactly the same to voice on wireless LAN, he says. And through partnerships with people like Ericsson, they can capitalise on existing systems, in the knowledge that (at least according to Boone) users want to keep them. "I think that we are getting out of the uncertainty about whether to do full IP, IP PBX or hybrid," he says. "We did surveys in the UK market, and major companies have now acknowledged that the best way to converge is to IP-enable existing systems, doing the move into IP in an evolutionary rather than revolutionary way." So, is voice over Wi-Fi a threat to operators? No, he says. "You can't talk about threat or scaring off . All providers are convinced that they will get into a fully converged environment. The tactics of getting there is different." In other words, says Boone, the mobile operators can easily come up with deals (and technology partnerships) that make the cost-benefits of moving to voice so small that it is hardly worth doing. Making deals for bundles of minutes is, after all, what the operators do best. We'd only add that they wouldn't bother to do that, if they didn't have users threatening to use voice on Wi-Fi - effectively, shopping elsewhere. From what he said next, we reckon his view of Wi-Fi may be a bit limited. Wi-Fi? That's a job for partners
"Of course we fully support Wi-Fi," says Boone. "But providing the base station and wireless LAN cards? This is something we leave to partners. We don't produce base stations or Wi-Fi cards." It sounds dismissive, and maybe it is, but he has a point. There are enough people out there already making base stations. "What's my value add to my partners? It is better to buy straight from the constructor." This means he has no opinion at all on the hot Wi-Fi architectural issues, such as whether to centralise control in a switch or not (see our article on the architecture wars). As far as he is concerned it is enough to make sure Ericsson's products support wireless cards from the major vendors. The systems are put in by partners who handle the integration. "I have to make sure that I have seamless handover between different technologies," he says. "We see WLAN-to-GPRS seamless roaming initiatives succeeding." He is stunningly back-handed in his support for Wi-Fi. Oh yes, it is suitable for some environments, he says, like hospitals in the US. Indeed, in the very long term, it might do quite well. "In the very long-term Wi-Fi may replace DECT," he says. "It is difficult to predict but Wi-Fi probably will be the prevailing or dominating technology in the long term." Given the almost complete consensus that DECT is a dead end, and its dismissal by Wi-Fi vendors (Airespace says it's dead) this counts a slap round the head for Wi-Fi. DECT is a grizzled, punch-drunk has-been, say most people in the industry (or at least those in Europe who have heard of it). If it's going to have trouble against DECT, Wi-Fi can't be much of a contender, surely? But Boone is looking at DECT as a living thing. "DECT still has its place in enterprise communications," he says. "We see it as a growing market still." It's not just for voice, he says, though the data applications he mentions don't amount to a great deal: not email, but text messaging: "SMS over DECT is very valuable instead of paging devices." "Instant messaging on DECT phone lets you instantly call back," says Boone. "It can be very valuable in certain areas such as healthcare and also elderly homes." Ooh, watch out, Wi-Fi!
So. with DECT on the case, and the mobile operators getting into gear, Wi-Fi vendors could be in trouble? That sounds laughable from within the world of Wi-Fi but he is calling on large forces. Our money is on Wi-Fi in the long term, simply because it is the flexible, mass-market standard. It is playing Ethernet to the ATM of the mobile operators' approach. But, as Boone predicts, the mobile players have some cards up their sleeves yet.
Voice over Wi-Fi is more of a threat than reality, he says. There are issues with encryption and fast handovers [which the IEEE standards body is addressing]. "At the end of the day, you will need multimedia convergence to really make use of voice and data and get the best functionality." WLAN vendors could learn a lot from the history of voice on wired Ethernet, he says. The penetration of voice on Ethernet has not been that high, despite vendors offering similar cost-benefit advantages for many years. "You will see the same thing with voice on wireless LAN," he says. Voice on Ethernet started with a technology pitch, which did not even talk about the value and benefits for customer. The vendors then eventually moved on to the cost perspective, proposing the technology for voice links from the branch office back to the central site. At this point, when users are likely to sit up and take notice, the telephony companies cut rates and came up with their own offers. Voice on Ethernet remains an option, and is getting more widely installed, but the cost savings are not such a big deal. Mobile operators can do exactly the same to voice on wireless LAN, he says. And through partnerships with people like Ericsson, they can capitalise on existing systems, in the knowledge that (at least according to Boone) users want to keep them. "I think that we are getting out of the uncertainty about whether to do full IP, IP PBX or hybrid," he says. "We did surveys in the UK market, and major companies have now acknowledged that the best way to converge is to IP-enable existing systems, doing the move into IP in an evolutionary rather than revolutionary way." So, is voice over Wi-Fi a threat to operators? No, he says. "You can't talk about threat or scaring off . All providers are convinced that they will get into a fully converged environment. The tactics of getting there is different." In other words, says Boone, the mobile operators can easily come up with deals (and technology partnerships) that make the cost-benefits of moving to voice so small that it is hardly worth doing. Making deals for bundles of minutes is, after all, what the operators do best. We'd only add that they wouldn't bother to do that, if they didn't have users threatening to use voice on Wi-Fi - effectively, shopping elsewhere. From what he said next, we reckon his view of Wi-Fi may be a bit limited. Wi-Fi? That's a job for partners
"Of course we fully support Wi-Fi," says Boone. "But providing the base station and wireless LAN cards? This is something we leave to partners. We don't produce base stations or Wi-Fi cards." It sounds dismissive, and maybe it is, but he has a point. There are enough people out there already making base stations. "What's my value add to my partners? It is better to buy straight from the constructor." This means he has no opinion at all on the hot Wi-Fi architectural issues, such as whether to centralise control in a switch or not (see our article on the architecture wars). As far as he is concerned it is enough to make sure Ericsson's products support wireless cards from the major vendors. The systems are put in by partners who handle the integration. "I have to make sure that I have seamless handover between different technologies," he says. "We see WLAN-to-GPRS seamless roaming initiatives succeeding." He is stunningly back-handed in his support for Wi-Fi. Oh yes, it is suitable for some environments, he says, like hospitals in the US. Indeed, in the very long term, it might do quite well. "In the very long-term Wi-Fi may replace DECT," he says. "It is difficult to predict but Wi-Fi probably will be the prevailing or dominating technology in the long term." Given the almost complete consensus that DECT is a dead end, and its dismissal by Wi-Fi vendors (Airespace says it's dead) this counts a slap round the head for Wi-Fi. DECT is a grizzled, punch-drunk has-been, say most people in the industry (or at least those in Europe who have heard of it). If it's going to have trouble against DECT, Wi-Fi can't be much of a contender, surely? But Boone is looking at DECT as a living thing. "DECT still has its place in enterprise communications," he says. "We see it as a growing market still." It's not just for voice, he says, though the data applications he mentions don't amount to a great deal: not email, but text messaging: "SMS over DECT is very valuable instead of paging devices." "Instant messaging on DECT phone lets you instantly call back," says Boone. "It can be very valuable in certain areas such as healthcare and also elderly homes." Ooh, watch out, Wi-Fi!
So. with DECT on the case, and the mobile operators getting into gear, Wi-Fi vendors could be in trouble? That sounds laughable from within the world of Wi-Fi but he is calling on large forces. Our money is on Wi-Fi in the long term, simply because it is the flexible, mass-market standard. It is playing Ethernet to the ATM of the mobile operators' approach. But, as Boone predicts, the mobile players have some cards up their sleeves yet.
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