Saturday, September 30, 2006

Why Should the Carriers Follow T-Mobile's "WiFi" Lead?

Fortune's Senior Writer, Stephanie Mehta, provides some compelling reasons why the other carriers should follow T-Mobile's lead in embracing a new wave of Wi-Fi-enabled cell phones.

If T-Mobile starts offering fickle wireless customers an opportunity to make super cheap calls and surf their phones for next to nothing, the company, owned by Germany's Deutsche Telekom (Charts), could end up stealing customers from its bigger rivals.

Wi-Fi phones will drive adoption of data services.
Right now, data represents a measly 10 percent of total wireless revenue in the United States even though the carriers have spent hundreds of millions of dollars upgrading their networks for broadband applications such as real-time games and video clips.

However, if customers can try a bunch of those services for cheap or for free while sitting at a hot spot, they might get hooked and pay up for the privilege of accessing their favorite games or applications when they're roaming off the Wi-Fi network, too.

And if wireless data takes off...

Wi-Fi can help wireless carriers manage their networks.
Today, data traffic takes up so little of the wireless telcos' networks that the quality of those systems remains pretty high. But once consumers do start using their cell phones to ship videos and other bandwidth-intensive files, watch out.

Wi-Fi phones will boost DSL sales.
Wi-Fi, remember, basically is a wireless extension of a broadband connection into a home or business. To take advantage of a Wi-Fi enabled phone while I'm at home, I would need to have a broadband connection, typically a cable modem or DSL line.

I think Stephanie knows a thing or two about this business, eh?

I wonder if she's looking for a 2nd job?

Dennis Smith

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