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Optical/IP

Vonage Goes WiFi

Vonage Holdings Corp., an upstart company known for pushing the boundaries of IP-based communications, announced today at the Consumer Electronics Show in Las Vegas that it has partnered with UTStarcom Inc. (Nasdaq: UTSI) to produce a portable WiFi handset that allows users to access Vonage’s VOIP network from multiple locations. Known as the F-1000, the unit will allow users to “roam from home” and access their Vonage service through 802.11b hotspots (see Vonage Unveils New VOIP Tech). Michael Tribolet, executive VP of operations at Vonage, says that the new handset, set for release later this year, will give Vonage users the freedom to access their service while on the go. “This is a great application for travelers, especially international travelers where there tend to be more WiFi hot spots, because it will allow them to stay in contact with communications the way they expect them to be,” Tribolet says.

Tribolet says that there were some technical hurdles that had to be overcome before the company could introduce a WiFi option to its subscribers. “The predominant issue has to do with battery life,” he says. “It’s different than a traditional cell phone which can go into sleep mode. A WiFi handset must always stay awake and be able to search for hotspots. The F-1000 has a battery life of about 100 hours, similar to a standard cordless phone.”

Another issue had to do with reliability and quality. “We’ve wanted to introduce a WiFi product for some time, but the products that were out there didn’t have good enough quality for the consumer market,” Tribolet says. “We finally found a product that gives us the quality and reliability that consumers expect.”

The wireless handset will connect to an existing wireless network out of the box and allow users to begin making calls over their broadband Internet connection right away, using their existing Vonage account. As a user travels to another location (like a Starbucks or their office), the handset will automatically scan for available authorized WiFi networks and connect to them, allowing users to make calls. Pricing for the F-1000 hasn’t been determined, but Vonage spokesman Jamie Serino says that one of the models currently being explored is offering the handset as a free option to customers when they sign up for service. Currently, Vonage customers must use an adapter to connect a phone to their IP network, but Serino says that letting customers choose between the wired or wireless option is something the company is looking at. “If you wanted both the wired and wireless option, then it would cost money,” he says.

Tribolet says that Vonage is exploring a multiple vendor strategy for offering additional wireless handsets, but is working exclusively with UTStarcom to bring the product to market. He noted Vonage’s existing relationship with UTStarcom as its voicemail provider. “We already have a great relationship with them and will continue to advance the partnership and add new features and improvements to the product.”

Other Vonage CES announcements:

Vonage also announced today that it would extend its relationship with Texas Instruments Inc. (NYSE: TXN) to include TI VOIP software and semiconductors in new Vonage-compatible communications products available from its partners, Viseon and VTech Communications. The two new devices, an IP videophone from Viseon and a cordless broadband telephone system from VTech, are compatible with Vonage's service and are expected to be available later this year.

— Chris Somerville, Senior Editor, Next-Generation Services

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jgh 12/5/2012 | 3:31:09 AM
re: Vonage Goes WiFi Vonage is trying to compete against the RBOCs and the cable companies (TW Cable looking to go cellular with Sprint) with this announcement.
They need a cellular solution, not an extended WiFi one. A dual phone that allows IP calls at home/office that becomes a cell phone when you travel.
An extended WiFi phone cannot compete with this solution.
reg64 12/5/2012 | 3:31:08 AM
re: Vonage Goes WiFi I agree that a cellular solution appears to be what is needed for Vonage. About 10 years ago GTE had a product called "Tele-Go" that pretty much did the same thing however the phone itself would switch to cell mode once you were about 150 feet away from the base unit. Nice concept but the problem with the product itself was a very high per minute charge to use the cell service. Needless to say this issue lead to a low take rate on the product.

Fast forwarding to today's lower cost for service and equipment, I do not see a reason why this model would not work, other than certain service providers not wanting to cannabalize a key revenue stream.
alchemy 12/5/2012 | 3:31:08 AM
re: Vonage Goes WiFi I've heard it said that something like half of all Vonage phones end up overseas. I see that as the market that allows Vonage to prosper. As MSOs and RBOCs start doing traffic shaping on P2P traffic, a best effort telephony service like Vonage is going to have all kinds of quality issues.

What the world wants is seamless mobility where a user can roam between home, office, and cellular environments. Vonage doesn't do that for the user. It's only when you put WiFi in the cell phone and have end-to-end QoS that you have a truly useful service. All the cellphone companies have GSM/WiFi or GSM/Bluetooth today so it's only going to be a couple of years before the business arragements get worked out between the cellular providers and the MSOs & DSL ISPs.
DoTheMath 12/5/2012 | 3:31:07 AM
re: Vonage Goes WiFi > As MSOs and RBOCs start doing traffic shaping on P2P traffic, a best effort telephony service like Vonage is going to have all kinds of quality issues.

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This assumes that there is an underlying bandwidth problem and therefore traffic needs to be (or will be) shaped, and that will kill best effort IP telephony. I disagree. I could be wrong, but in my opinion, the more likely scenario is that voice goes to zero marginal price, and gets attached to all kinds of other value - so credit cards, gas station cards and such provide unlimited voice calling as a convenience to their "members". Vonage may end up OEMing the service through such channels, and collect a fee from these organizations based on number of people served.
materialgirl 12/5/2012 | 3:31:06 AM
re: Vonage Goes WiFi This looks like a typical "Disruptive Technology" ala Harvard's Clayton Christensen. The old technology gets over featured and over priced. The radically new technology seems crummy at first. Radical users begin to adopt it, however, while the "establishment" poo poos the whole idea.

Before you know it, the establishment is dead, as the "S" curve of adoption goes to the new model. Watch out for this one.
flyingsausage 12/5/2012 | 3:31:03 AM
re: Vonage Goes WiFi I think the P2P shaping is typically done on a specific port/protocol basis, for file sharing applications, meaning only kazaa and similars stuf will be impacted.
unless vonage (or any other VoIP P2P like skype) is using kazaa ports, their traffic should not be impacted
rwelbourn 12/5/2012 | 3:31:02 AM
re: Vonage Goes WiFi Looks like Alchemy was rather prescient, what with Time Warner Cable in talks with Sprint to provide cellular service. With TW providing residential VoIP service and reselling Sprint's cellular service, they would be in an ideal position to offer dual mode cellular/WiFi service.

Maybe I should starting eating own my words about the business case, eh?

rwelbourn 12/5/2012 | 3:31:02 AM
re: Vonage Goes WiFi I have yet to see a compelling business case for dual mode Cellular/WiFi phones. Why would the cellular providers want to give up revenue by allowing traffic to be diverted away from their networks?

I will try to answer my own question, but I'm afraid I don't find the answers very convincing:

1. To extend service to an area not covered by the cellular network. Perhaps a cellular subscriber has a home that is in a cellular blind spot, or is traveling abroad. In the latter case the dual mode phone could perhaps be used with one of those mini-hotspot wireless routers that people sometimes use in hotel rooms in conjunction with the hotel's broadband service. But then imagine what the voice quality would be like with all the guests trying to use that piddling little T1 or E1 pipe!

2. In a corporate deal where a company agrees to provide its staff with dual-mode cellphones, wherein the phones also register with the corporate IP PBX and proxy to the service provider's network (using SIP, presumably). The service provider then gets the mobile revenue, perhaps in return for subsidizing the handset. However, with most people now having their own cellphones, not provided by their employers, how likely is this?



-----------------------
Alchemy wrote:

What the world wants is seamless mobility where a user can roam between home, office, and cellular environments. Vonage doesn't do that for the user. It's only when you put WiFi in the cell phone and have end-to-end QoS that you have a truly useful service. All the cellphone companies have GSM/WiFi or GSM/Bluetooth today so it's only going to be a couple of years before the business arragements get worked out between the cellular providers and the MSOs & DSL ISPs.
rwelbourn 12/5/2012 | 3:31:02 AM
re: Vonage Goes WiFi The point is that the boxes used for traffic shaping, like P-Cube's, can be applied to just about any protocol, not just P2P. I can well imagine the incumbents wishing to impede the businesses of the "broadband parasites" like Vonage by favoring their own VoIP traffic over that of their non-facilities-based competitors, if not actually throttling their competitors' traffic back.

Whether they would actually degrade traffic headed to another service provider is another matter; it would be sure to raise howls of protest and calls for regulation of what the incumbents can do to their customers' traffic, so I'm inclined to think they would probably not go there.
eltooguru 12/5/2012 | 3:31:01 AM
re: Vonage Goes WiFi The case for dual-mode phones sort of makes sense in business. In that application an employee can be reached via one number no matter where they are. Some human efficiencies result. Enough to be compelling? Unclear.

In residential use this is a non-starter. The gain is not worth the pain of a power-sucking phone and the need for a wireless network in your house. 911 service is also dependent on AC line power, unless you buy a UPS. Yech.
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