The term “convergence” takes on many meanings in the telecom and wireless worlds.
One form of convergence is combining Wi-Fi with wide-area cellular.

You don’t have to look too far to see the word “convergence” plastered around the telecom industry. The term has been bandied about for more than a decade.

But today, one of the more pronounced forms of convergence in wireless is the combination of Wi-Fi and cellular. In the U.S. cellular world, that trend arguably is most evident through carriers offering handsets that combine cellular and Wi-Fi for making phone calls. Sure, many carriers offer some form of Wi-Fi in various phone models – most notably the Apple iPhone through AT&T – but for the most part, the Wi-Fi is designed for data, not voice.

In June, T-Mobile USA launched its HotSpot @Home nationwide, offering a landline replacement and giving consumers the choice of using Wi-Fi to make phone calls from their homes. On a smaller scale, Cincinnati Bell launched its CB Home Run service, which also uses a converged mobile handset that connects to its GSM network and a Wi-Fi network, in the greater Cincinnati and Dayton, Ohio, markets. Both offerings incorporate unlicensed mobile access (UMA), which allows carriers to remain in control of their services.

EARLY ADOPTERS
While its launch is still fairly new, T-Mobile already is finding expectations are ringing true. Studies show 30% of 18- to 34-year-olds use their mobile phone as their only phone, so T-Mobile assumed that segment would be the most interested in its solution, and they have, according to Mike Selman, director of product marketing at T-Mobile USA.

In particular, the carrier is seeing strong adoption by young adults as single-line customers. However, it also is seeing strong adoption by families looking to simplify their lives and use their mobile phone as their only phone, saving money in the process, he says. At launch, the carrier was selling the single-line service as a $10 monthly add-on to a qualifying voice plan. For up to five lines on a FamilyTime plan, the price is $19.99 per month.

One of the chief complaints of consumers is poor quality cellular service from their homes. The Wi-Fi part of T-Mobile’s plan is designed to address that, offering better coverage and quality. During the carrier’s Seattle pre-nationwide launch, T-Mobile saw people’s Wi-Fi minutes from home go up dramatically while their wireless minutes remained fairly unchanged, indicating customers see value in using their mobile phones from home, Selman says.

T-Mobile worked closely with partners, including Nokia and Samsung on the handsets, as well as Alcatel-Lucent, Nokia and Kineto Wireless on the network components. Router manufacturers D-Link and Linksys also contributed in designing the routers for simple set-up and enhanced battery life for the handset, as well as ensuring voice calls are carried with the “utmost call quality,” Selman says. The routers are offered for free with service via a $50 mail-in rebate.

T-Mobile isn’t saying if it eventually wants to have all its phones enabled with Wi-Fi. “Our plan is to offer a great selection of HotSpot phones across our entire portfolio,” he says. “Overall, we think HotSpot @Home positions us very well. No other mobile solutions currently provide the value of unlimited nationwide calling and great in-home coverage.”

ENOUGH CHOICE?
Others point out that so far, T-Mobile only offers the two phones, so consumers’ choice is limited at a time when they ordinarily would have an array of phones from which to choose. In fact, James Colby, chief marketing officer at Comverse Americas, goes so far as to say he doesn’t want just one handset for his communication services. He wants multiple devices – one for camping, another for business. “Why not allow me to communicate with my PC? You can own all of my communications … but personally, I don’t want a single unified device.”

Comverse, which provides solutions for cell phones to communicate with PCs, is advocating a multidevice strategy, linking PCs, cell phones and set-top boxes. “In general, our approach is very well-received by anybody talking about a 3-screen policy,” he says.

Globally, the Wi-Fi Alliance had certified about 100 Wi-Fi/cellular phones as of mid-summer; about 10% of them are Wi-Fi only, according to Karen Hanley, senior director of the Wi-Fi Alliance. “People love their Wi-Fi,” she adds. In surveys, 80% of respondents say they would give up their coffee before they give up their Wi-Fi. The same number would give up their iPod over Wi-Fi. “It really is a cultural phenomenon.”

But it’s unlikely the GSM operators would have rolled out the combination handsets without UMA. A GSM technology, UMA makes Wi-Fi friendly to the mobile operator, says Steve Shaw, associate vice president of marketing at Kineto. The company is trying to make the case that UMA is ideal for femtocells, which in some circles are viewed as a CDMA alternative to UMA. Kineto argues that the two are complementary.

While T-Mobile’s nationwide counterparts are no doubt watching its progress, it’s unclear what tactics the other carriers will pursue. The Wi-Fi Alliance’s Hanley concedes that early on, wireless operators were hesitant toward the disruptive technology known as Wi-Fi. “But clearly, “many of the carriers are embracing it,” she says. “It’s really the best of both worlds.”

Mike O’Malley, director of external marketing at Tellabs, agrees that operators are starting to change their tunes. From the carrier perspective, the fundamental issue they have to solve is delivering the same service quality for end-users regardless of the network. “I think they’re coming to a different realization about Wi-Fi in that it can be complementary to what they have,” he says. “It doesn’t have to be a competing technology.”