InterDigital Inc (IDCC)

[Jean-Michel RIOND]

Who can tell me the impact on IDCC's business of this new Internet phone calling ?

Wireless
Wireless Net calling targets masses
Paul Davidson, 01.04.05, 11:09 AM ET

USA TODAY

Internet phone calling, which is already rocking the traditional phone business, is poised to take on the cellphone industry later this year.

Vonage, the No. 1 Internet phone company, will unveil plans today to offer subscribers a wireless Wi-Fi phone that can make calls over the Internet at homes or at public Wi-Fi hot spots. For Vonage subscribers, the phone could amount to a kind of limited-use cellphone that would cost nothing extra.

Several smaller companies have introduced Wi-Fi phones in the USA at prices ranging from $130 to $750. But Vonage's move would mark the first mass-market rollout of the device at a lower price, probably around $100.

'Our customers are asking for it,' says Vonage CEO Jeffrey Citron.

The service poses at least some threat to wireless carriers because Wi-Fi calls are effectively free, says TeleChoice analyst Daniel Briere. Cellphone calls, by contrast, eat up a monthly bucket of minutes.

The company plans to roll out the phone, made by UTStarcom, between April and June.

Vonage will offer the phones to its 400,000 subscribers, who typically pay $24.99 a month for unlimited local and long-distance calls. Those customers plug a regular phone into an adapter linked to a broadband Internet line. Vonage turns the calls into data that zip across the Internet before being converted back to voice at the other end.

Now, Vonage wants to take the service a step further with Wi-Fi networks that let people surf the Internet wirelessly. With a Wi-Fi phone, they could make Internet calls from home without the need to run wires to the broadband line. Customers could use the phone number of their existing Vonage service or a new one for no extra fee.

Subscribers also could use the phones at public Wi-Fi hot spots that offer wireless Web access. Fee-based hot spots are sprouting in coffee shops, hotels and airports. Huge swaths of some cities, and entire college campuses, are becoming free hot spots.

Vonage-subscribing families could give their son or daughter a Wi-Fi phone to make free calls at college.

Vonage hopes the Wi-Fi phone will attract new customers. 'It's a great differentiator,' Briere says.

Yet some downplay any serious threat to the wireless industry, noting that only cellphones work practically everywhere. 'The vast majority of college students have cellphones, and they're not going to carry two devices,' says IDC analyst Alex Slawsby.

Motorola and Nokia have introduced dual-mode Wi-Fi/cellphones that can roam between the two networks. But they will not be widely offered by U.S. carriers until 2006, Slawsby says.

Vonage today is also slated to announce plans for a cordless Internet phone for the home that won't require an adapter and a low-cost Internet-based video phone.

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