Ford to cut cord on 8,000 phones

Ford is expected to announce today that it is replacing the traditional wireline phones of 8,000 employees in its product development department with wireless phones from Sprint.

The move, believed to be the largest of its kind, continues a trend that's well underway in the consumer world but just getting started in corporate America: Businesses are eliminating some, or all, of their wireline desktop phones in favor of going all-wireless, all the time.

"It's really about mobility," says Jeff Lemmer, IT manager of telecom services at Ford. Product development "is a group that tends to physically move around a lot. It is real important from a communication standpoint that they are able to interact openly and freely with each other."

Experts say that all-wireless is not yet a common choice - or necessarily the best one - for all corporate customers. Wireless minutes can cost up to 10 cents more per minute than wireline. Products that let companies integrate wireless users with their PBXs are lacking, and wireless coverage - inside and outside buildings - can be troublesome.

"We see a high rate of replacement, up to 16%, where consumers are giving up their landline phones for wireless," says Kneko Burney, chief market strategist for customer and service provider markets at In-Stat/MDR. "When we asked business users that make buying decisions for their company the same question, only 5% indicated they would even consider it."

But Burney says that number could reach 15% over the next three to five years when more small businesses opt for all-wireless, and more large businesses begin migrating departments.

Ford, which has more than 327,000 employees, isn't waiting. The nation's No. 2 automaker has already migrated 800 employees from landlines to Sprint's wireless service. That transition occurred after Ford spent much of the fourth quarter working with Sprint to build out in-building coverage in Ford's Dearborn, Mich., buildings. It was the most challenging and time-consuming part of the rollout, Lemmer says. To ensure service coverage and optimum reliability, Sprint has deployed network infrastructure within Ford's facilities.

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"We are actually removing our existing landlines, and the cell phones will become the primary telephony communication device for these employees," Lemmer says. "Therefore, it was important we have a good quality of service before we actually did the deployment."

Sprint also beefed up its coverage throughout southeastern Michigan to ensure Ford's employees would have reliable service while traveling around town. The in-building buildout was part of Ford's overall deal with Sprint.

Ford's desire to improve communications between its engineers is the main driver behind its use of Sprint's Ready Link walkie-talkie feature, along with standard cellular service. Ready Link lets users click a button on the side of their phone to instantly access other users who are on a directory that's uploaded to each phone before it's issued.

While moving users exclusively to wireless phones might raise concerns about excessive personal calls, Ford has a long-standing wireless use policy that also applies to these 8,000 employees, Lemmer says.

Ford doesn't expect to migrate many other employees to the wireless-only project. "We see it as a niche [deployment] for certain types of users that are highly mobile," Lemmer says. The company also didn't consider cost cutting an objective.

"We were able to look at what we are paying currently for landlines and pagers and felt that this was really a cost-neutral, not a cost-saving opportunity," says Lemmer, who declined to provide cost details.

Cost is actually one of the big drawbacks of migrating to an all-wireless environment today, says Bob Egan, president of consulting firm Mobile Competency. "Many users may not have the leverage to get out from under bulk-rate plans," he says.

That translates to companies paying much higher per-minute rates for wireless vs. wireline usage. "The industry average is about 4 to 5 cents per minute for wireline and about 14 cents per minute for wireless. That's a big disadvantage," Egan says.

Another challenge today is integrating wireless users with legacy PBX switches. In Ford's case, the company is putting that integration on the back burner because it is in the midst of a large VoIP deployment.

In September, Ford announced one of the largest VoIP deployments, with 50,000 phones. SBC is managing the $100 million project.

Integrating wireless with Ford's VoIP and Centrex system will be the second phase of the wireless project, says Allyn Phillips, manager of extranet infrastructure. "We are currently exploring that with SBC."

But for 2005, Ford's wireless users will not have access to typical PBX features that most in the corporate world take for granted, such as four-digit dialing, call transfer or call forwarding. Users still will have features such as caller ID and voice mail, but they will be supported by Sprint rather than a corporate PBX.

Products that offer wireless-to-PBX integration are not mature, Egan says. There are a handful that do the job, but not many from which to choose. Mitel Communications, Ascendent Telecommunications and Orative are among the vendors that make products that let users integrate their wireless phones with their PBX or add software to wireless phones to have them act more like desktop phones attached to a PBX. Analysts expect more choices in the next 12 to 18 months.

Despite Ford's desire to eventually integrate its wireless users with its VoIP and Centrex systems, it has no plans to integrate wireless with the small pockets of Wi-Fi it has deployed in the near term.