Wi-Fi to Broaden Cingular's Reach

By Ed Sutherland

October 15, 2004

SBC plans to use its FreedomLink hotspot network and VoIP to make Cingular a better competitor to other mobile carriers.

As carriers from AT&T to Verizon seem to be concentrating more now on their voice-over-IP (VoIP) services rather than their tentative forays into public Wi-Fi networks, it's interesting that SBC Communications says it plans to use its own burgeoning number of FreedomLink Wi-Fi hotspots to expand the footprint of Cingular Wireless.

The plan, still in the early stage, would "allow customers to also use their phones on Wi-Fi hotspots," says SBC spokesperson Michael Coe.

Despite its recent $41 billion purchase of AT&T Wireless, which would make it the nation's largest cellular carrier, Cingular has fallen behind Verizon, Sprint and other phone companies in the race to modernize its current network. (Cingular is a joint venture between SBC and BellSouth.)

SBC executives see Wi-Fi as an attractive alternative to additional expensive wireless spectrum.

"If I don't do that [use the Wi-Fi], Cingular's got to have a lot of spectrum," SBC Chief Technology Officer Chris Rice told Reuters.

Rice envisions phone conversations being routed seamlessly among Wi-Fi hotspots, wireless home networks and Cingular's cellular system. The one sticking point: a phone able to make such transitions doesn't yet exist. While Coe says a supplier for a Wi-Fi/cellular handset hasn't been determined yet, Rice believes one will be found before the end of 2005. Chipsets for such phones have been in development for some time by companies like Texas Instruments.

SBC also sees Wi-Fi helping Cingular Wireless to enter the increasingly-popular communication trend of VoIP. SBC is investigating providing consumers with two levels of Internet-based telephony. In once scenario, a basic VoIP handset would take the place of a second residential phone line (similar to what Verizon, AT&T and Vonage provide). Also under consideration is bundling VoIP and broadband services, while keeping a basic phone line in case of power outages.

Coe says 4.3 million SBC subscribers are using DSL as the gateway for their home wireless networks. Such customers would be able to take advantage of any future service that permitted Cingular users to place calls over Wi-Fi connections.

The ability for Cingular subscribers to place calls using SBC's Wi-Fi hotspots will be available everywhere the company maintains an access point, says Coe. SBC operates in 13 states.

SBC says it expects to operate thousands of hotspots by the end of 2006, but to date is behind T-Mobile and its aggressive entry into the market through deals with chains like Borders and Starbucks.

In addition to its own Wi-Fi hotspots, SBC has inked more than a half-dozen roaming agreements with well-known wireless players and others.

In August, SBC signed a pact with Sprint allowing subscribers of the two carriers to access Wi-Fi networks operated by both companies.

Earlier this year, SBC was involved in one of the largest deployments of Wi-Fi, when it announced that its FreedomLink wireless service would be available in more than 1,500 UPS locations. SBC could be in 5,000 UPS and Mail Boxes Etc. stores by 2007 (using Wayport to manage the service).

In June, the company signed an agreement with Wayport allowing SBC to operate hotspots in 6,000 McDonald's restaurants by mid-2005, according to reports.

The total number of hotspots in the United States is expected to reach 130,000, according to research firm Gartner Group.

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