Low-Cost Voice over Wireless LAN?
Israeli entrepreneur sees college students as early adopters of new phone technology.
Wi-Fi (IEEE 802.11 wireless LAN technology) has supported VoIP pretty much since its popularity exploded in 2001, but voice over WLAN has not made significant strides toward widespread acceptance until recently, when some telcos have begun to realize its potential as an extension of their mobile networks.
Enter a totally new approacha cellular-style, VoIP-based phone servicecourtesy of Israeli startup, Trans Con Mobile (no web site at present). Trans Con executives say they've tested a prototype systemand it works.
Founded two years ago, the company has been in stealth/development mode until just recently. It is still in the planning phases of a push into U.S. markets, and its chairman, a former investment banker, says the stars are all in alignment. "A subscriber is going to pay such a small amount of money for using our services, it will be really shocking," Avi Shani says.
From a technology point of view, everything in the Trans Con setup is about minimizing cost. Shani figures a mid-sized city like Albany, New York would need 100 to 150 base stations or access points, positioned on rooftops, to achieve full coverage. Shani says the base stations, designed by Trans Con, will cost a "small fraction" of traditional base stations, though he won't be more specific. If 150 base stations weren't enough to blanket the city, Trans Con could just add more. "The cost is so low, it doesnt make a difference," he says. Wi-Fi-enabled handsets then connect to the base stations, with a range of 800 to 1,100 yards in a built-up area or 1.5 miles over open country.
The biggest savings, though, comes in the simple fact that the Wi-Fi spectrum is free. Without having to pay billions of dollars for licenses, the company could have wide latitude in its pricing.
While the technology may have promise, the market itself may raise challenges. There's no shortage of providers of mobile phone services, after all.
Shani figures on breaking in by courting a niche market: the starving-student crowd.
"Our plan is to start in a medium city in America with a large number of students and large number of colleges," he says. Students are looking for low-priced service, "and we are looking for early adopters. The early adopters are young people."
Shani's research shows the average price for cellular service in the student market is $47 a month, and he says he can beat that "by far," though the final pricing plans still are in formation.
The company also is being strategic about its use of outside help. Shani has subcontractors on tap to handle site acquisition, while business-development pros and marketing gurus chart the course for the immediate future.
So far, much of Shani's marketing plan revolves around a slick presentation.
"When iPod came into the market, Samsung and all the other guys were already there with their MP3s," he says. "The fact that Apple was behind iPod obviously was a big advantage, but they also had a very catchy name, and we are doing our market research to find that name for ourselves."
Add to this a user-friendly interface. "You dont even need a manual, it's so simple," he says.
Voice is just the beginning for Trans Con. Shani is already talking about streaming television. He also envisions a not-too-distant scenario in which users receive ads and coupons for stores as they walk past, based on location.
To stay ahead of the curve, he wants talented local managers to direct U.S. operations. He says he is talking to at least one major corporation about the prospect of corporate backing.
The coming months will be a balancing act, Shani says. "We will have to move fast, but I know as a manager that if you move too fast, you make mistakes."