Trans Con's Cheap VoWi-Fi Plan

By Adam Stone

August 31, 2006

This Israeli company believes college students are the ticket to big success as an equipment maker and service provider.

Forget about coffee shop hotspots and urban deployments. Think about Wi-Fi instead as the transmit mechanism for a VoIP-based, cellular-style phone service.

Would that even work? Executives at Israeli company Trans Con Mobile (which currently lacks a Web site) say it can and it does. They say they've tested a prototype and demonstrated success.

Founded two years ago, the company has been in development until just recently. It is still in the planning phases of a push into U.S. markets, and its chairman, a former investment banker, says the stars are all in alignment. "A subscriber is going to pay such a small amount of money for using our services, it will be really shocking," Avi Shani says.

From a technology point of view, everything in the Trans Con setup is about minimizing cost. Shani figures a mid-sized city like Albany, New York would need 100 to 150 base stations, positioned on rooftops, to achieve full coverage. Shani says the base stations, designed by Trans Con, will cost a "small fraction" of traditional base stations, though he won't be more specific. If 150 base stations weren't enough to blanket the city, Trans Con could just add more. "The cost is so low, it doesn’t make a difference," he says. Wi-Fi-enabled handsets then connect to the base stations, with a range of 800 to 1100 yards in a built-up area or 1.5 miles over open country.

The big savings, though, comes in the simple fact that the Wi-Fi spectrum is free. Without having to pay billions of dollars for licenses, the company could have wide latitude in its pricing.

While the technology may have promise, the market itself may raise challenges. There's no shortage of providers of mobile phone services, after all.

Shani figures on breaking in by courting a niche market: the starving-student crowd.

"Our plan is to start in a medium city in America with a large number of students and large number of colleges," he says. Students are looking for low-priced service, "and we are looking for early adopters. The early adopters are young people."

Shani's research shows the average price for cellular service in the student market is $47 a month, and he says he can beat that "by far," though the final pricing plans still are in formation.

The company also is being strategic about its use of outside help. Shani has subcontractors on tap to handle site acquisition, while business-development pros and marketing gurus chart the course for the immediate future.

So far, much of Shani's marketing plan revolves around a slick presentation.

"When iPod came into the market, Samsung and all the other guys were already there with their MP3s," he says. "The fact that Apple was behind iPod obviously was a big advantage, but they also had a very catchy name, and we are doing our market research to find that name for ourselves."

Add to this a user-friendly interface. "You don’t even need a manual, it's so simple," he says.

Put it all together, and you get… too much ambition? Perhaps. Shani is already talking about streaming television. He also envisions a not-too-distant scenario in which users receive ads and coupons for stores as they walk past, based on location.

This is talk we've heard before in the wireless community, and rarely has it come to fruition. But Shani says the technology has improved, and that it really can work this time.

Yet he isn't rushing to implement anything along these lines. He is candid about the challenges that lie ahead. Site acquisition takes time, he says. But he's convinced the minute his service starts to gain some traction, big and hungry players will be trying to scoop up market share.

To stay ahead of the curve, he wants talented local managers to direct U.S. operations. He says he is talking to at least one major corporation about the prospect of big corporate backing.

The coming months will be a balancing act, Shani says. "We will have to move fast, but I know as a manager that if you move fast, you make mistakes."

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