GSM vs. WiFI

With Skype releasing free software for PocketPC it is time to start comparing GSM (or CDMA) vs. WiFi for mobile voice connectivity. Oh, and did I mention that Skype for PalmOS is expected next month?

So in a world of free connectivity over WiFi, why do I want expensive cellular technology? I have a TMobile GSM phone. Lousy connectivity here in California. And I spend about $150 a month on the service. By contrast, I am sitting in the "Town's End" cafe here in San Francisco, freeloading on someone's WiFi network in the apartment building up above me. "Dan" (as the WiFi network is called) will never know, and is not being harmed in any way... besides it is ridiculous in SF that Town's End doesn't offer free WiFi as do hundreds of other eateries in the area.

So what is the advantage of cellular technology? Today, mobility. While driving over the bay bridge this morning I was able to have a conversation over GSM that clearly would not have been possible over WiFi -- both because hot spots were not available across the bridge and because the technology is currently not in place to provide for WiFi roaming.

But this will change.

Three things need to be in place for VoWiFi to really give cellular a run --

1) Ubiquitous hot spot access. As an "anarchic" license-exempt market, this will happen in fits and starts. But it is likely to happen quickly in areas like the SF Bay Area. And it is likely to be free given the benefits associated with providing access (I just ordered another $4.00 Chai Tea so I could finish writing this note).

2) WiFi call management. Some sort of smart network head-end call management infrastructure that manages the QoS, not just the connection, including helping to maintain the call integrity during interruptions due to jumping from one WISP operator's network to another. That is -- I don't need all of the "carriers" to have roaming agreements, as long as some server in the cloud manages my connectivity as I have to move from network to network.

3) Better ergonomics for WiFi phones. I predict holiday season 2004 (right around the corner) for nice VoWiFi handsets, not clunky Palms...

Item (1) will take years to accomplish -- especially on stretches like the Bay Bridge. But I predict that a lot of casual mobile phone users will opt for free WiFi connectivity INSTEAD OF cellular in the near future. Early adopter markets like the Bay Area will be interesting, but another area to watch is emerging markets like China. Already companies in China are putting up analog wireless "hotspots" and selling something that looks and works like your traditional home wireless handset for use in the streets in China. WiFi is a leap forward with the same economics of cheap equipment and license-exempt bandwidth.

Look for an IP Inferno in the mobile market starting this fall.