Motorola and others collaborate on W/L networks

CHICAGO: A seamless wireless communications network, one that would allow users of cell phones to stay constantly connected on different communications networks, could become a reality under an agreement announced by three companies.

However, the collaboration by Motorola Inc., Avaya Inc. and Proxim Corp. to combine technologies is likely several years away from putting such a network into wide use, analysts said. The system, which initially combines a new cell phone, wireless infrastructure equipment and software, may not be ready yet, but the technologies involved are already attracting competitors because they could one day generate billions of dollars in revenue, analysts said. For corporate customers, it will mean cost savings and greater efficiency from employees.

"It's not the next best thing since sliced bread, but it can provide some costs savings," said Jeremy Duke, president of research firm Synergy Research Group.

For example, an employee talking on a cell phone outside his corporate office uses an operator's wireless network, but under the new system his call would automatically switch to the corporate voice-over-Internet network when he walks into the building, resulting in cost savings as his company no longer pays for the wireless call, the companies said. "It's enabling what was once before separate communications pieces to work together," Duke said. "That's pretty cool."

Motorola officials estimated the technology could save companies 20 percent to 30 percent on the cost of keeping employees connected to their networks.

Motorola, the No. 2 wireless phone maker behind Finland's Nokia, will develop a special dual-system cell phone that can operate on cellular and 802.11, or WiFi, networks. It will be priced around $300 before subsidies and will be available in limited numbers for the first trials, Motorola officials said.

Officials and analysts said the system will eventually include other wireless devices, such as personal digital assistants or laptop computers.

Trials of the new system will begin in the United States starting in the second half of the year, the companies said. The initial testing involves a nationwide wireless operator that was not identified. Analysts said the trials would likely last a year, meaning commercial deployment will not occur until late 2004 or early 2005.

Since the new system would combine features of existing technologies, its financial potential is unclear but huge. The wireless local area networking market is expected to double to $4 billion by 2006, while the wide area network equipment market, which includes towers that route wireless calls, will reach an estimated $45 billion in 2006, according to research firm IDC.

Rivals, including Nokia and Cisco Systems Inc., will likely develop competing systems, analysts said. Another question is whether wireless operators will be willing to sacrifice some of their profits for a possible greater payoff in higher usage. Analysts and the companies believe wireless operators will do so for competitive reasons.

© Reuters