Thursday, February 04, 2010

Is The End Of Cellular Phone Near?

We love our cell phones. We can’t live without them. Yet, a recent report throws into doubt the future of cellular phone service as we know it today. What can possibly threaten the most popular telecommunications service in the world and what will we do instead?

The cellular tower will still be here long after cellular telephone service is gone.The report is a bit of news that was announced about the same time as the release of the new Apple iPad. Almost lost in the hoopla was a confirmation by Apple that they are now allowing VoIP applications over 3G cellular on the iPhone. AT&T chimed in that they had “tweaked” their network to allow VoIP over 3G.

What’s so earth-shattering about that? Until now, VoIP has been application non-grata on cellular networks. There are two good reasons for that. The technical reason is that VoIP generates a steady stream of packets while a call is in progress. If you have too many conversations going simultaneously, they’ll hog all the bandwidth and the network will become congested to the detriment of everyone. The business reason is that any call made using VoIP on the broadband data link is one less call using cellular minutes.

This showdown has been brewing for some time. It’s rooted in the historical design and pricing for cell phone service. In the beginning... a couple of decades ago... cellular phone systems were designed to offer mobile telephone service. The first generation were analog. The next generation went digital. But it was all based on voice channels transporting full duplex phone conversations. The model was the standard telephone handset minus the wire.

The addition of a separate data service, especially a broadband data service, is a more recent addition. Each carrier has only certain licensed frequencies that it can use at each tower site. They divvy up that bandwidth between voice and data. There need to be enough channels so that anyone who wants to make a phone call can do so. But there also needs to be enough broadband capacity so that customers will buy the add-on data service for their smartphones.

Now here’s the rub. Voice plans are sold as a package of so many minutes per month. Data plans are sold as an unlimited broadband usage, although in practice there actually is a limit of 5GB or so to thwart those who try to use the cellular network to replace a DSL or Cable broadband connection. There’s just not enough bandwidth available if everyone did THAT. But, in theory, you could use Skype or another VoIP service on your data plan for telephony and skip the voice package completely. This is the doomsday scenario that has triggered the wrath of cellular carriers whenever they suspect a VoIP incursion into their networks.

There are some recent developments that may soon render this battle of the protocols moot. The first change was the availability of all-you-can-eat voice and data plans. If no one is tracking minutes so they can charge for overages, then who cares if the call goes down the voice or data pipe? It all pays the same.

Just as significant is the reality that the data channel is the one with the screaming demand for more and more bandwidth. Video is becoming the wireless killer-app and video consumes bandwidth by the Mbps, versus a few dozen Kbps to support a phone call. Every carrier is in a mad scramble to upgrade its backhaul capability and tower site facilities to add more and more 3G bandwidth. They’ll likely not even finish before the next generation of higher bandwidth called 4G is deployed. That’s coming sooner than you think. The FCC just told wireless microphone users to get off the off the old 700 MHz TV channels that were sold to wireless carriers so they can be put to their planned uses.

If data bandwidth demands are swamping voice channel demands, it’s only logical to rethink the whole cellular service market. In the future, we’ll all be carrying small computers that also make voice calls or, more likely, video chat calls. Telephones that also do a little Internet browsing will be relegated to the recyclers. How about that iPad? It even looks like a big iPhone. All you need is a Bluetooth headset and an approved VoIP app and you’ve got yourself a tablet telephone.

Data dominance is going to render the idea of talk minutes a bit quaint. You’ll either pay by the minute for everything with a pay-as-you-go plan, or pay a flat fee for however you want to use the cellular network. The cellular carriers will become wireless broadband network providers for roaming, mobile and some fixed location applications. Cellular may be entering its twilight years, but wireless is just getting started.

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