• 06/14/2004
    5:00 PM
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Wired-Wireless Convergence Threatens Telcos

While enterprises and consumers embrace the convergence of wired and wireless communications, old-line telcos struggle.
Old-line telephone companies must be looking at wireless-wireline convergence the way a terrified by-stander might see high-speed trains rocketing toward a high-speed collision.

Traditional wireline and long distance operators have been losing a small but increasing chunk of their business to wireless carriers, according to a number of recent studies. Now, two new types of converged phones promise to accelerate that trend.

One type of the new devices will let users take cellular and wireline calls on the same phone. The other type will support standard cellular calls as well as voice-over-WLAN calls. Both types of phones let users choose the least expensive or clearest calling method.

This trend obviously offers advantages for enterprises and consumers, but it inevitably will lessen the reliance on traditional wireline calling methods. So what are the incumbent carriers to do?

BT in the U.K. is embracing the trend. In fact, it says it will offer converged phones, in conjunction with wireless operator Vodafone, starting at the end of the year. Responses from incumbent carriers in the U.S. are likely to be more varied. Large telcos that own or co-own wireless companies may well encourage the trend since they'll continue to make money one way or the other. Carriers that don't hold a significant stake in a wireless company could dig in their heels and resist as long as they can.

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