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Wireline providers: Stemming the outflow to cellular options

Nov 26, 20025 mins
Cellular NetworksEnterprise Applications

What’s a wireline provider to do as these revenues shift outwards to other players? Well, the easy answer is fight back; the tough question is, with what?

If you’re a wireline provider, you have to admit there are some challenges coming down the pike. Slow acceptance or not, 3G is coming, and the wireless data services’ pricing plans are getting better rationalized. Users will come too; it’s only a matter of time. They have already come to the cellular voice services – even as their primary telephone lines, and that migration is increasing.

So what’s a wireline provider to do as these revenues shift outwards to other players? Well, the easy answer is fight back; the tough question is, with what?

First and foremost, we’d set aside the political considerations. If you cannot compete directly with the cellular player(s) because you own a huge chunk of them, then your options are more limited. We’d suggest you try resale agreements and bundling as a means to retain the customer base. Boost your OSS interfaces and electronic bonding with the cellular provider, and look to add value-added services for revenues.

But many wireline players are not in that position. And for these carriers, the answer is different in many places. We do work all over the globe and see two major applications now for no-brainer wireless services:

  1. “Metrospot” nomadic solutions.

  2. Wireline complement solutions.

The first really builds off of a lot of the news lately. We have seen supplemental protocols that allow dual mode transmission with 802.11b for extended reach up to 20 miles, even at highway speeds. Companies like IP Wireless, Navini, Etherlinx and others have various solutions – all of which have roadmaps to support both 802.11b PC card co-existence and wireless voice options. We’re also seeing improvements in the transceiver technologies. Vivato is the most recent to offer the promise of breakthrough extended coverage solutions. And then there are mesh networking solutions that also cover metrospot applications, like Mesh Networks.

Here is where it gets interesting. Early form factors were modem-size solutions, and while you could carry them with you, they really begged your indulgence to consider them truly nomadic. But the 802.11b dual mode PC card is the way to go. When at home or office and in range of your wireless LAN, you can choose to be on that unlimited service. When out of range, you kick over to the metrospot solution that covers the whole city – far better than piecing together hotspots, and clearly the way to go.

These technologies are on the cusp of being a practical solution for a wireline provider looking to preempt the data move to 2.5G/GPRS/3G/etc. Most of them can operate in a range of frequencies that are accessible to a wireline provider without access to the classic cellular spectrum, like in the fixed wireless and unlicensed areas.

Where it gets really interesting is when you add voice-over-IP handsets to the mix. The pricing is still a little high – in the $150 range per basic handset – and there are quality of service and scalability issues yet to be tested out. But conceivably, as these data solutions roll out, third party VoIP handsets that make use of the data networks for voice calls have the potential to capture back some of that lost cellular market share. The challenge for the carrier will be how to make money on this voice traffic other than the core traffic revenues. That’s where creative softswitch-based services can come in.

On the wireline extension application – very applicable in the developing world – there’s a need to boost sheer teledensity in areas where it just costs a lot to install the normal infrastructure. (We’re dealing in countries now where they laid fiber optic cabling between central offices because the population would dig up the copper lines and make jewelry out of it – go figure) Here there’s the question of the cheapest solution to give voice (and if data – that’s a bonus) to more people than have it today. Where fixed wireless solutions have been cost effective in the past in order to extend customer reach, we’ve been intrigued by some of the more mature PHS solutions on the market, like that of UTStarcom. Price points of less than $100 per line are needed in this environment, and there are not many solutions that fit that bill.

However, installed in a metro situation, these systems can also play a great role in retaining voice traffic with a combo wireline/wireless voice solution. Interestingly, the UTStarcom box has 64K bit/sec data (moving to 128K bit/sec next year) so you can have low-speed data applications support as well.

Where it gets most interesting is about two years down the road, when these two requirements start to merge into one addressable solution. Imagine putting in the data network, and voice comes along with it. That’s a very attractive solution for many country telecom providers around the world.

Got a solution or comments about these applications?  We’d love to hear about them.