Move Over, Cell Phones

A new type of phone that uses Wi-Fi to transmit voice is beginning to pop up in a few small businesses. Voice over Wi-Fi offers the same flexibility for office phone users as 802.11 Wi-Fi does for PDA and notebook PC users. Ultimately, Wi-Fi will be integrated into cell phones, say analysts. But for now, these phones come in handy if companies need a portable phone with a wider range than even business-class portables or where cell phone use is prohibited.

Roving Planet, a 45-person wireless network software company, added voice over Wi-Fi to its existing wireless local area network and Internet Protocol PBX so that its support staff was always available to inbound support calls, reports Tom Ohlsson, the company's director of marketing. "If you're a customer-service driven company like us, having a 'Wi-phone' handy means you never miss a call" because the calls to workers' desk phones go to the Wi-Fi phones.

"I'm constantly walking around the building. There are lots of times I'm on the phone, need to talk to an engineer or someone, or I'm on a support call and go to the lab or a storeroom and stay on the call," says Scott Pollock, information technology support manager at Roving Planet.

Other benefits of Wi-Fi phones are reducing cell phone use (and thus the cost of cell phone minutes) and reducing phone wiring costs, says Ben Guderian, director of marketing at SpectraLink, a Wi-Fi phone vendor.

About 25 to 30 voice over Wi-Fi products are already on the market. And adoption is increasing as PBX vendors integrate Wi-Fi phones into their systems. There are even several vendors, including Nortel and Avaya, that offer IP-based systems with Wi-Fi phones aimed specifically at small businesses, says Guderian.

But the phones are still expensive, costing about $300 to $700, and their use is being slowed for several reasons. The trend is to incorporate Wi-Fi into cell phones, so that a user can talk via either technology, according to Craig Mathias, principal researcher at Farpoint Group, a consulting company that covers wireless communications. But that will take three to five years, he says. Another problem is that wireless carriers are tepid about the dual-mode devices, says Ellen Daley, principal analyst at Forrester Research. After all, offering Wi-Fi to their cell phone customers will eat into their current business, she points out.

While the first dual-mode phones cost around $500, analysts expect the technology to gain traction in the next three to five years. "We expect 30 to 40 percent of all cell phones sold in the year 2010 to also support Wi-Fi," says Mathias. But "for vertical applications, we have voice over Wi-Fi vendors now that are selling up a storm."