Dual-network handset eyed for corporate users

Nokia Corp. plans to have phones that can switch between mobile and fixed networks available for consumers next year, as telecoms operators increasingly try to woo customers with converged services.

The world’s largest handset maker will start selling a dual-network phone targeted at corporate users this year, and one for consumers is due in the first half of 2006, according to Olli-Pekka Lintula, director for strategic marketing of Nokia’s technology platforms division.

"All future phones for enterprises from Nokia will also be Wi-Fi-equipped," Lintula said.

Convergence is the buzzword in the telecoms industry. In June, British telephone company BT Group Plc launched a service using a Motorola Inc. handset that functions as a mobile phone outside the home but switches on to a cheaper broadband fixed line inside the house.

The initiative is being watched closely as it could help fixed-line operators like BT stem contract cancellations and win back market share from wireless companies.

Swedish telecom operator TeliaSonera AB is currently testing a similar service in Denmark and plans a commercial launch next year. Later the company intends to bring the service to its other markets.

BT’s service initially uses Bluetooth, a short-range wireless technology. The company has said it plans to use Wi-Fi technology, which has a much longer range than Bluetooth, once better handsets become available as the current ones are too bulky for the consumer market.

Wi-Fi gives a phone or computer a mobile connection, but transports traffic over the fixed-line network, in most cases making it cheaper than regular wireless networks.

Nokia predicts there will be speedy growth for phone calls transported over Internet-based wireless networks.

"We have a very positive outlook for this," he said.

Some 88 percent of the traffic handled by mobile networks could migrate to new Internet-based networks, Lintula added.

This risk is "theoretical" as it is based on the assumption that all workplaces and homes will have a Wi-Fi network installed and all mobile subscribers will have a Wi-Fi-enabled handset.

Still, this worst-case scenario paints a gloomy picture for mobile operators, which unlike fixed-line companies, have so far remained relatively unscathed by the increasing popularity of Internet-based calling.

Lintula said it’s still questionable whether bypassing today’s wireless operators and network infrastructure will actually be so much cheaper.

There is no universally accepted method for how calls will be transferred between users on different networks and how those calls will be charged for.

Also mitigating the possible threat is the ongoing shift in traffic from fixed-line networks to mobile, meaning mobile’s share of the overall business is increasing.

Nokia forecasts that more than half of the world’s voice traffic will be done on mobile networks, including wireless Internet, by 2007, up from less than a third in 2004.

By 2009, Nokia forecasts that there will be just over 100 million Wi-Fi-enabled phones globally, up from a few million this year.

The company reckons that today’s mobile networks, and upgrades to them, will be the main carrier of voice calls going forward.