Nokia, Cisco Frame Convergence Future

The new Nokia-Cisco Systems partnership for enterprise telephony is the kind of simple-yet-comprehensive product that tends to make IT managers salivate, which is why it got such a good reception by attendees at the Interop trade show in Las Vegas on Wednesday.

Uniting corporate PBX services with cellular devices, it has the potential to provide an elegant one-device, one-number answer to complicated and costly corporate voice challenges. Aligning with Cisco's popular and widespread wireless LANs and its Unified Communications Manager system, it builds on infrastructure that many companies have already installed. And it runs over the well-received E-series line of Nokia devices including the recently released E61i, a BlackBerry-like smartphone with an expanded screen and a full qwerty keyboard.

Known as "Nokia Intellisync Call Connect for Cisco," the new product promises to at last bring to fruition the long-talked-about notion of fixed-mobile convergence, or FMC.

As you might guess, however, there's a catch: the new product is currently unavailable in the United States, and there's little prospect of it being supported by major wireless carriers in the near term.

Nokia will rely on a "complementary channel strategy" for delivering the devices and the new Call Connect product in the U.S., said David Dorosin, director of product marketing for security and mobile connectivity at Nokia. That essentially means bypassing the Big 4 U.S. wireless carriers and selling directly to enterprises. "Our focus is on taking this solution into the enterprise, and leveraging the [E-series] devices' dual-mode capability in the corporate PBX," acknowledges Dorosin.

The situation with the Nokia-Cisco system epitomizes the telecom industry's somewhat schizophrenic approach to FMC at the moment. Device vendors like Nokia and wireless LAN providers like Cisco see enticing productivity gains and nearly boundless demand for FMC capabilities in businesses large and small, while the wireless carriers, fearing an erosion of their core voice business, have resisted the spread of the technology.

Last year, Cingular launched a product called OfficeReach that uses a VPN to connect wireless devices to existing PBX telephone systems. And T-Mobile has launched in Seattle its "HotSpot at Home" service, which allows residential users to use their wireless network to make voice-over-IP calls using their cell phone. Speaking on a panel Wednesday at the Interop technology conference entitled "Enterprise Strategies for Convergence," Steve Shaw, director of marketing gat Kineto Wireless, said he expects the service to be rolled out nationwide by the summer.

To date, though, no U.S. carrier has announced a dual-mode WiFi/cellular service for businesses. Some carriers have actively discouraged the spread of converged services by disabling or barring WiFi functions on the phones they sell. Some service plans from carriers actually forbid voice-over-IP calls. Device vendors, meanwhile, are moving aggressively forward to push converged devices into the market, particularly outside the U.S. Not surprisingly, Japan has become the leader in FMC deployments. Using devices from NTT DoCoMo and a voice-over-wireless-LAN system from Meru Networks, Osaka Gas in 2005 launched an FMC initiative that now comprises more than 1000 users and handsets.

Shipments of dual-mode phones will exceed 300 million by 2011, according to ABI Research, leaving resistant carriers in the position of putting a small dam across a very big river.

"Some carriers have been more open [to converged services] than others," said Meru Networks VP for product marketing Steve Troyer. "If history holds, the U.S. carriers will generally need a little bit of nudging from competitors to really move on this."

As Nokia announced its new FMC product, Jim Balsillie, co-CEO of BlackBerry-maker Research in Motion, was declaring his own intentions to embrace WiFi in upcoming devices. RIM will release a WiFi-enabled device as early as late 2007, Balsillie said in a speech at J.P. Morgan technology conference today in Boston.

"If you throw Wi-Fi in our products -- that's imminent -- and you have a service that does the handoff, it's something that can be interesting in the latter half of this year," Balsillie said.

He also asserted that "most of the carriers are supportive of FMC," an assertion that was echoed today by speakers on the Interop panel today.

"The dialogue has really changed," said Craig Gosselin, chief marketing office at NewStep Networks, a Bell Canada spin-off that sells converged-services software to service providers. "Twenty-four or even 12 months ago when we talked to mobile operators they really had a problem with the idea of cannibalizing minutes from their networks. It's been many quarters since I've heard that objection."

And if enterprises and converged-services providers find that the path to FMC remains blocked, there's another option, according to Vivek Khuller, co-founder of DiVitas Networks: "This is America," Khuller during the Interop panel discussion. "We always have the option of litigation."