Cell Phones May Hold Key to VoIP

Market research firm In-Stat says it expects dual-mode cellular handsets to drive the mass consumer market to the eventual adoption of Voice over IP (VoIP) providers.

In fact, the firm predicts 66 million users will sport Wi-Fi handsets by 2009 and 73 percent of consumer VoIP subscribers will use the devices. Currently, two percent of consumers subscribing to VoIP use dual-mode smartphones.

“The key to capturing the market for these next-generation personalized
services is control of the end-point device,” Keith Nissen, an In-Stat
senior analyst, said.

Wireless high-speed broadband access, unified messaging, video and
dual-network cellular Wi-Fi services are what is encouraging a growing market, Nissen said.

While mass production of dual-mode sets is not scheduled until 2007, the In-Stat market survey showed that over 80 percent of businesses have an interest in the technology.

Based on competition from mobile carriers without wireline operations,
Europe is expected to be the largest initial market for the dual-mode
Smartphones. Nissen said the large scale roll-outs will likely begin in 2007.

“Europeans have traditionally used much more wireless,” he said.

However, Nissen noted, the push will most likely lag in the United States because many cell phone services are run partially by big telecommunications providers.

Those providers, he said, will be reluctant to foster any type of competition between cell phone and wireline providers.

“Europe will be first to adopt for competitive reasons,” he said. “It is rapidly coming on right now.”

He also said it is very likely VoIP will be thought of as a mobile service, much more so than a wireline service.

“Wireline carriers in the U.S. are regionalized,” he said. “Wireless is unregulated and has national brands that consequently make dual-mode
competitive nationally.”

Because of these factors, Nissen also believes, government regulations —
such as the Federal Communications Commission’s (FCC) mandate that VoIP providers make enhanced 911 (E911) available nationwide by Nov. 28 — may not have much
of an impact.

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