Wi-Fi Phone Buyer's Guide

The days of trying to make an important call from the bowels of a data center, only to find that your cell phone doesn't have a signal, may soon be coming to an end. New services and devices designed to extend the reach and reduce the cost of traditional cell phone service are beginning to reach the market, and are certain to change the industry's landscape.

Voice over Internet Protocol (VoIP) service providers Skype and Vonage have each recently partnered with hardware manufacturers to release cell-like phones that can use their services via Wi-Fi networks.

Not to be left behind, traditional cell carriers are launching dual-mode phones and services that run over the cellular networks, but switch to cheaper (for carriers), faster (for customers) Wi-Fi networks when one is available. T-Mobile launched a trial of this type of service, dubbed HotSpot@Home, in October 2006. Although the service is currently only available in Washington state, it's likely to be extended to other cities in 2007.

But before we get in too deep, let's get familiar with the technology and some terminology.

Wi-Fi phone services can be divided broadly into two categories: mobile phones that use a wireless network to connect to a VoIP service such as Skype or Vonage, and dual-mode phones that have the capability to run over both wireless networks and a cellular network. The goal of both of these approaches is the Holy Grail of fixed mobile convergence, which brings mobile and landline services together into a single device.

By the end of the second quarter of 2006, more than 9 million homes in the United States were using some sort of VoIP service, according to a December 2006 report from In-Stat. That number includes facilities-based providers, such as Vonage and the cable companies, as well as software-based providers such as Skype. Although the rate of growth for VoIP services is brisk, the next logical step is to offer alternatives to using the services only through a traditional handset or a headset tethered a PC. Enter Wi-Fi phones.

While dozens of telecom and networking companies have launched facilities-based VoIP services, the majority of these services are intended for use only within the confines of a home or business. They run over the customer's Internet connection and terminate in a traditional digital or analog handset. Several software-based VoIP services, such as Google Talk, Yahoo Messenger, Gizmo, and Skype, take this one step further by running on subscribers' PCs, allowing them to make free "calls" over their Internet connections to other users running the same software. A few of these services, most notably Skype, also offer an option to make and receive calls from landlines for an additional monthly or per-minute fee.

As for dual-mode phones that hop between wireless and cellular networks, the current leading approach uses Unlicensed Mobile Access (UMA) technology to handle the wireless side, with a seamless handoff to and from a traditional GSM/GPRS cellular network when a high-quality wireless signal isn't available. If the phone has an active voice or data session and an available wireless signal is detected, the phone will hop to the cheaper, faster wireless network. In theory, the handoffs back and forth between the two types of networks should be transparent to the subscriber.

UMA, which also is referred to as a Generic Access Network (GAN), uses the same slice of the broadcast spectrum -- 2.4 GHz -- used by many wireless networks, cordless phones, and Bluetooth devices. While there's also some question about whether or not UMA/GAN will remain the long-term solution for fixed mobile convergence, once dual-mode phones gain wider acceptance, it's certainly possible that changes to the network infrastructure will be made.

Service And Device Options
A handful of VoIP providers, Skype and Vonage among them, have partnered with device manufacturers to offer "single-mode" Wi-Fi phones that connect to their services. Devices touted as "Skype certified" are being offered by Netgear, SMC, Belkin, Sony, and others, while Vonage offers only one, manufactured by UTStarcom.

A fairly significant issue faced by single-mode Wi-Fi phones is that the current crop can only connect to open access points or those secured by WEP or WPA-PSK (the security code can be entered into the phone). Hotspots that require a user name and password, or even free hotspots that require a Web page to load prior to granting access, aren't supported.

While dual mode cellular/Wi-Fi service is more broadly established in the U.K. (BT Fusion is the most prominent service), T-Mobile's HotSpot@Home is still the only publicly available dual-mode option in the U.S. While about two dozen handsets from various manufacturers are available worldwide, only two devices -- one from Samsung and one from Nokia -- are compatible with the HotSpot@Home trial.

Below is a quick summary of services and devices available:

Skype
As of September 2006, eBay-owned Skype reported that it had a jaw-dropping 113 million registered users worldwide. With a base that large, it's fair to assume that offering a Wi-Fi phone compatible with the service could find a substantial audience. Skype also recently announced an unlimited outgoing Skype-to-landline calling plan for $30 a year, with incoming landline-to-Skype calls available at an additional fee. Dirt cheap, by almost any measure.

Skype has about a half dozen certified options for phones, and also is compatible with any Pocket PC device with Wi-Fi support that can run the Skype software.

Three of the most interesting phones are the Netgear Skype Wi-Fi Phone (model SPH101, list price: $230); the Belkin Wi-Fi Phone for Skype (model F1PP000GN-SK, list price: $180); and the Sony Mylo (list price: $350).

Netgear was the first to market, launching the SPH101 in early 2006, and since then the phone has gotten generally positive reviews. The Skype software is embedded in the device and the user can sign up for a new Skype account or use an existing one. The Netgear phone supports connecting to 802.11b/g wireless networks, but doesn't yet have support of the emerging 802.11a standard, which is still in draft form.

Belkin's Wi-Fi phone also is designed to work with Skype. One interesting and useful function is the integrated hotspot manager from wireless provider Boingo, which allows the phone to connect to one of Boingo's 60,000 hotspots in 60 different counties worldwide for an $8 monthly fee. Boingo has denser coverage in the U.K. and Europe, but its presence in the U.S. is growing.

The Sony Mylo is the priciest, but also the most feature-rich. It's essentially a media player with a mini keyboard, with 802.11b wireless connectivity. It comes with Skype as well as Google Talk and Yahoo Messenger pre-installed, and unlike most other Wi-Fi phones, includes a Web browser.

In addition to its current crop of Wi-Fi-only phones, Skype also has reportedly been in discussions with several cell phone manufacturers about launching dual-mode handsets, presumably in some sort of partnership with a cellular carrier.

Vonage
Like Skype, Vonage also offers a Wi-Fi phone, but just one model: the UTStarcom F1000 (list price: $130). But the company says it expects to certify and release a number of additional devices in 2007. The F1000 works in very much the same way as other devices; the Vonage software is embedded into the device itself, and it connects to the service via an available Wi-Fi network.

Vonage currently offers unlimited local and long distance calling for $25 a month.

T-Mobile
The only dual mode Wi-Fi/cellular service in the bunch, T-Mobile HotSpot@Home requires that the subscriber use a Nokia 6136 or Samsung SGH-T709. Both phones are steeply discounted when signing up for the plan, and end up costing less than $100 before additional rebates. The plans themselves cost a minimum of $60 per month -- a cellular plan for $40 or more and an additional $20 month for the Wi-Fi service.

The Wi-Fi aspect of the service is delivered by having customers install a T-Mobile-provided wireless router at their home or business. This router is currently free after rebate, but does require that the customer have high-speed Internet service. The phones will also work on any T-Mobile Wi-Fi hotspot, of which there are some 7,000 locations across the U.S.

Additional details on the plan can be found at theonlyphoneyouneed.com, T-Mobile's site for marketing the service.

EarthLink
EarthLink officially launched its first city-wide municipal Wi-Fi network in Anaheim, Calif. in mid-2006, and added Philadelphia shortly thereafter. Although a Wi-Fi-only phone plan for these municipalities was rumored to be announced by the end of 2006, it looks as if these will be available at some point in 2007. EarthLink also has indicated that it plans to offer a dual-mode service through its Helio cellular joint venture with SK Telecom.

Other Players
Cingular and Sprint Nextel have discussed testing consumer-oriented dual-mode services, and it's possible that their trials may be opened up in 2007. Nothing is official yet, and most carriers aren't yet willing to discuss their plans publicly.

Municipal Wireless
As more cities roll out municipal Wi-Fi networks, many of which are ambitious projects intended to blanket entire areas with free or cheap Wi-Fi access, the opportunity for Wi-Fi phone providers comes into focus. Once Wi-Fi access is ubiquitous and affordable, the phone services begin to reach the critical mass where the benefits to consumers and businesses become more apparent.

Although EarthLink and Google have driven some of the most high-profile municipal Wi-Fi efforts, Microsoft also has recently announced sponsorship of a municipal Wi-Fi project run by MetroFi in Portland, Ore. And many cities and towns simply choose to do it on their own, albeit often on a smaller scale.

Even with the fast pace of cities rolling out these services, there are likely to be a number of challenges. Imagine a busy public space with a Wi-Fi network being bombarded by dozens of people trying to use their Wi-Fi phones simultaneously. The quality of service could drop precipitously, rendering it all but useless for anyone but the most patient.

Nevertheless, emerging technology, such as the faster, longer-range 802.11n wireless networking standard, could be a boon for municipal wireless plans and Wi-Fi phone service providers.

Challenges Remain
While the promise of Wi-Fi phones is enticing, many challenges lie ahead before customers and businesses fully accept the products.

For single-mode phones, finding a wireless network to log into could be a headache. Wi-Fi coverage in virtually any metropolitan area is a mishmash of open and closed networks running different standards, and connecting reliably to this could be a major challenge. This is less of an issue for the dual-mode services which can use cellular service as a safety net.

While the service providers potentially save a lot of money on cellular backhaul fees by running traffic over cheap wireless networks, these cost savings may not trickle down to the consumer, other than in the form of saved cellular minutes. Also, Wi-Fi phones themselves are fairly expensive, with the most basic devices -- no camera, MP3 player, or Web browser -- starting at well over $100. And if the T-Mobile trial is any indication, service providers can be expected to charge a premium for offering service via wireless hotspots.

None of the VoIP services running on Wi-Fi phones currently support emergency calling such as E911, which makes having a Wi-Fi phone as your only phone service a risky proposition. Vonage provides a valuable service, though; if 911 is dialed from one of the Wi-Fi phones using its service, the call will be answered by a Vonage emergency call center, which will help contact the appropriate local emergency resources.

Because of the power requirements of including a Wi-Fi radio in phones, these first-generation Wi-Fi phones can drain a battery in standby mode in just a day, and offer only a couple of hours of talk time. Some power-saving advancements are being made, such as technology that allows certain devices to lower their power consumption when not actively making calls, but things will need to come a long way before Wi-Fi phones can deliver the days of standby and hours of talk time taken for granted with traditional cell phones.

None of these factors may matter much in the long haul if customers and businesses deem the convenience and flexibility of Wi-Fi phones to be worth more than any potential headaches. Add that to the constant improvements in technology and the rapid pace of new phones being released and you may find your next phone is a Wi-Fi phone.

View the chart:
Wi-Fi Phone Comparison