As Carriers Drag Heels, Nokia Pushes Cisco-Cell Combo

A partnership between Nokia and Cisco Systems(CSCO) promises the kind of simple-yet-comprehensive enterprise telephone products that IT managers love. Unfortunately, the new setup, while technically available now, isn't supported by the major U.S. carriers, and there's no telling when that will happen.

Nokia's Intellisync Call Connect for Cisco delivers on the long-talked-about notion of fixed-mobile convergence--the melding of landline phone service with wireless connectivity--by joining PBXs and cellular devices. The system combines Cisco's wireless LANs and Unified Communications Manager with Nokia's E-series mobile devices, including the recently released E61i smartphone, which has an expanded screen and a QWERTY keyboard.

Nokia will sell through enterprise channels to businesses, bypassing the Big Four U.S. wireless carriers and underscoring once again the telecom industry's grudging position on fixed-mobile convergence. Device vendors such as Nokia and wireless LAN providers like Cisco envision productivity gains from, and strong demand for, fixed-mobile convergence, while the wireless carriers, fearing an erosion of their core voice business, have resisted it.

Cingular last year introduced a product called OfficeReach that uses a VPN to connect wireless devices to PBXs. And T-Mobile has launched a HotSpot at Home service in Seattle, allowing residential customers to use home Wi-Fi networks to make voice-over-IP calls using cell phones. At last week's Interop conference in Las Vegas, Steve Shaw, director of marketing with Kineto Wireless, said he expects T-Mobile's service to be rolled out nationwide this summer.

URGE TO CONVERGE

To date, no U.S. carrier has announced a dual-mode service--one that combines Wi-Fi and cellular--for businesses. On the contrary, some carriers have discouraged the spread of converged services by disabling or barring Wi-Fi functions on the phones they sell. Device vendors, meanwhile, are aggressively pushing converged devices into the market, particularly outside the United States. Japan has emerged as the leader in fixed-mobile convergence deployments. Using devices from NTT DoCoMo and a voice-over-wireless-LAN system from Meru Networks, Osaka Gas two years ago launched a fixed-mobile convergence initiative that now comprises more than 1,000 handsets.

ABI Research predicts that shipments of dual-mode phones will exceed 300 million by 2011. If cell carriers continue to resist, they'll be pushing back against customer demand. "If history holds, the U.S. carriers will generally need a little bit of nudging from competitors to really move on this," says Steve Troyer, VP for product marketing at Meru Networks.

Research In Motion co-CEO Jim Balsillie last week declared his intention to embrace Wi-Fi in upcoming BlackBerrys. RIM may release a Wi-Fi-enabled device in the second half of this year, Balsillie said at a JPMorgan technology conference in Boston.

"Most of the carriers are supportive" of fixed-mobile convergence, Balsillie said, an assertion echoed by some of the speakers at Interop. "The dialogue has really changed," said Craig Gosselin, chief marketing officer at NewStep Networks, a Bell Canada spin-off that sells converged-services software to service providers. "Twenty-four or even 12 months ago when we talked to mobile operators, they really had a problem with the idea of cannibalizing minutes from their networks. It's been many quarters since I've heard that objection."

If enterprises and converged-services providers find that the path to fixed-mobile convergence remains blocked, there's another option. "This is America," said Vivek Khuller, co-founder of DiVitas Networks, at Interop. "We always have the option of litigation."