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« Cicero Phone Choose Cell, Wi-Fi as Available | Main | Broadom Revs VoWLAN Chips »

September 15, 2005

VoIP and Hot Spots: The Stumbling Blocks

By Glenn Fleishman

The eBay acquisition of Skype has led to more talk about Wi-Fi and VoIP: Don’t buy into the hype that cell handsets will integrate Skype and Wi-Fi so that a single phone will let you call at very cheap rates (or free) from anywhere a Wi-Fi signal penetrates. Ain’t going to happen short term; long term, the entire telephony infrastructure is changing and both Wi-Fi and Skype will be part of it.

There are three kinds of Wi-Fi + VoIP combinations: pure VoWLAN, which are IP phones used in an enterprise with a robust infrastructure in which the phone is essentially exactly like a wired, conventional phone—only better; roaming VoWLAN in which a phone can be switched to a mode in which it can be used at home or at work, but only on known networks; and hotspot VoIP, in which secret sauce is inserted into a phone’s software to allow it work at hotspots.

The first market is already well developed, and it’s grown like mad in recent years. The increased security now available for enterprise Wi-Fi networks means that objections to offering VoIP over the WLAN have evaporated. The calls can be kept secure at several layers, making the voice traffic as secure as that going over a wired PBX setup or the PSTN.

The second market is starting to emerge in which people will carry phones that have cell standards and Wi-Fi. The VoWLAN feature will allow a few networks to be characterized, and the infrastructure won’t be robust within the enterprise, but rather be outsourced. Calls are primarily made to and from the PSTN, if not exclusively.

The third market is what has people holding their breath. When you look at companies like T-Mobile, which has a very poor U.S. 3G plan compared to its much larger competitors, Wi-Fi hotspots become their only tool to expand customer base and revenue. Further, they’re the only domestic hotspot network to have rolled out 802.1X security, which allows unique logins and unique encryption keys to be assigned over the local wireless link to each user on the hotspot network.

They’ve already scored a consumer electronics deal with Kodak, which will ship software later this year for their already-delayed EasyShare-One camera with Wi-Fi: the camera will be able to use 802.1X to log into T-Mobile’s network, minimizing network interface configuration.

Right now, most hotspots networks employ their own authentication schemes that allow a user to be connected to access. T-Mobile and iBahn are the only networks of scale that I know have 802.1X deployed. T-Mobile has it built into their own client; iBahn makes it available through standard 802.1X clients (found in Windows XP and Mac OS X 10.3 and 10.4).

Authentication remains the boring issue that has prevented the kind of growth (until lately) predicted for hotspot use. Authentication creates walled gardens for each user base. Companies like Boingo, iPass, and GoRemote have had to build client software that handles the authentication differences behind the scenes in order to aggregate the dozens of distinct hotspot networks in their system.

Boingo has experimented with VoIP over Wi-Fi hotspots through Vonage, but you had to be an existing Vonage subscriber, have a Vonage soft-phone subscription, and be a Boingo subscriber. The Boingo/Skype deal is essentially a pricing relationship that allows the use of Skype only on hotspots that Boingo aggregates for less money.

All these pieces to make VoHS (VoIP over Hot Spot?) work means that there’s a large software component and many intermediate pieces involved in the chain from voice conversation out to the Internet over an arbitrary hotspot.

Essentially, lack of roaming across all major networks at a reasonable price prevents VoIP over hot spot from becoming a near-term ubiquitous reality. Cell handsets aren’t easily upgradable, and it’s likely that the kind of software necessary to allow a handset with cellular and Wi-Fi support built in also will require frequent updates.

Which brings us to SK-EarthLink. The partnership between the largest telecom company in South Korea, and one that deploys some of the most advanced handsets and devices on their network in the world, and EarthLink bodes well for VoIP over hot spot. Because SK-EarthLink will be a MVNO (mobile virtual network operator), reselling access probably from Sprint PCS’s voice and 3G network, it will be in their interest to offer the best price with the most advanced features using the most conserved cost.

You can see the convergence. While Boingo is apparently just one of the suitors to be part of the SK-EarthLink deal—Boingo/EarthLink founder and SK-EarthLink CEO Sky Dayton has to recuse himself from business deals that involve Boingo—it’s likely to use its aggregated portfolio combined with existing VoIP-in-the-field research to make a good offer.

The handsets that SK-EarthLink offers could be the real portent of the future of this third VoIP over Wi-Fi market: the handsets could, one hopes, have cell voice, 3G data, and Wi-Fi built in, switching voice and data to the cheapest available network, whether one’s home, work, or hot spot. If SK-EarthLink can achieve that, they could represent the first real convergence in a way that benefits consumers—and threatens the foundation of the entire phone business. Ironic, then, that they’ll be buying service from Sprint to do it.

Posted by Glennf at September 15, 2005 10:23 AM

Categories: Convergence

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A lot of good points raised in this article. Couple of follow-ups. VoWLAN in the enterprise is still nascent. Very few deployments of any size. Of those, hospitals and universities seem to be the primary early adopters. This market has long way to go before I would characterize it as growing fast.

I doubt wireless carriers will play a significant role in the roll out of VoHO - at least not in the next 3 years. Wireless carriers are not on top of the VoWLAN developments in the enterprise. As soon as two way hand-offs becomes possible (cell to wifi; wifi to cell) with enterprise equipment, the Carriers will be in a weak position to influence things.


Posted by: william at September 15, 2005 12:32 PM

Hello Glenn,

good summary, but I think you forgot one scenario, which might be the most complicatest one from the technical point of view, but on the other hand side the most important one regarding a real boost for convergence.
I am talking about the scenario where telcos try to get pieces of the ISPs and where ISPs try to become telcos and get a pieces of the 3G + beyond market --> the Circuit Switched / VoIP interworking, like it was demonstrated by Ericsson and Softbank end of summer, see the press release:

Handling everything via IP, like voice via 3G/PS (packet switched), DSL and WLAN is quite easy in the meanwhile with e.g. Mobile IP. As a SwissCom customer you can already do this today, but just with your laptop. I guess it is not such a big deal to integrate all this in one terminal handset ...

But for doing this in a really large scale you need to boost this via the approach like proposed in 3GPP as mentioned in the press release above.

Best regards,


Posted by: Phil at September 26, 2005 3:32 PM

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