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Michael Bazeley

Novenber 10, 2003

Nov. 10--It's the holy grail of telephones, the go-anywhere handset that you can use at the office, at home and on the road.

New phones coming to market soon will allow users to realize that goal, letting them make calls over WiFi networks, at work or elsewhere, and then switch to the more ubiquitous cellular networks when they move about.

Some companies are even developing handsets that will seamlessly transfer users from one network to the other in the middle of a call.

For now, most of the products are aimed at medium and large companies looking for ways to slash their telecommunications costs.

But activity in the area is heating up, and analysts and companies say it is only a matter of time before consumers carry a device that lets them make calls and surf the Web wherever they go.

Many businesses already move their phone calls over their local area networks (LANs) and the Internet, using a technology called voice-over Internet protocol (VoIP).

Some have extended the technology, giving employees WiFi phones that link up with the local networks and allow them roam freely around their corporate campuses.

In April, Cisco Systems unveiled its Wireless IP Phone 7920, aimed at hospital and warehouse workers and others who move around a lot on the job.

The phone uses the 802.11b wireless radio frequency, the same technology used for most public WiFi hot spots and to network personal laptops at home.

By moving their phone calls over the local networks and the Internet instead of traditional switched phone networks, companies can often save 20 percent to 30 percent on their phone costs, analysts said.

But WiFi hot spots have a limited range, and their coverage is nowhere near as wide as cellular phone networks. So when employees leave their campuses, they have to reach for another phone.

Enter the "dual-mode" phone, an all-in-one device that lets users connect to both WiFi hot spots and cellular networks.

Motorola, Avaya and Proxim are jointly developing a phone system that will allow workers to roam among WiFi hot spots and cell networks. In addition to using the device as a phone, workers would be able to access their company network remotely, moving files back and forth and sending and receiving e-mail messages.

The goal is to allow workers to move to a "one-phone, one-number world," said Paul Weismantel, director of enterprise solutions for NEC America, which is working with Motorola on the technology.

"These are for wide-area roamers, for very mobile people," Weismantel said. "They'll have a phone-centric device, but it will provide e-mail, applications and calendar. You'll have both voice and data on one device."

Because the companies' handsets will use GSM, the global cellular phone standard, customers will be able to access a phone network from many countries.

The companies intend to market the package to large companies that want to cut telecommunications costs.

Mitel Networks is developing a "Supercradle" phone that uses VoIP to carry calls over a company's network. Users can dock their personal digital assistant in a cradle to let the phone automatically access address books and other information. The PDA can also display the user's voice mail queue.

Once removed from the cradle, the PDA could even place calls through a WiFi connection or be used like a cell phone. The company hopes to ship the product before the end of 2004.

Long-term, Mitel officials hope to offer a handset that can seamlessly move a user from a WiFi network to a cell network mid-call.

"You really then have the panacea of all the technologies in one handheld device," said Paul Butcher, Mitel's chief operating officer.

Several other companies are working toward the same goal. In April, Ericsson announced a dual-mode chip set that works with both 802.11 and standard cell networks.

Intel and TeleSym demonstrated a "Universal Communicator" in September that seamlessly roams between WiFi networks and international cellular networks.

There are many technological hurdles, however.

The 802.11 wireless standard was not designed to carry voice traffic. So successfully hopping from one WiFi access point to the next is tricky with a voice call. Also, there are limits to the number of calls that wireless access points can handle.

"It's hard to do," said Jemma Pavlo, a networking analyst with InStat.

Transferring a call from a WiFi network to a cellular network, mid-call, is trickier still.

"If we were to try to do that hand-off today, we'd drop the call," said Mitel's Butcher.

There are also more mundane -- but no less important -- challenges. Dual-mode devices that can surf the Web and make phone calls tend to be power hogs.

"A lot of these issues are being addressed," said Mark Shockley, manager of Motorola's wireless LAN division.

Cost is also an issue. Many of the mobile devices and office handsets are priced in the $300 to $700 range, too much for some businesses and far out of reach for many consumers.

"Down the line, the challenge will be achieving mass-market appeal," Butcher said. "But then again, who would have thought 10 years ago we would have cell phones with digital cameras. And here we are."

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(c) 2003, San Jose Mercury News, Calif. Distributed by Knight Ridder/Tribune Business News.

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