Vonage Wi Fi VOIP Handset To Cost $100

Vonage Sets $100 Price Point For VOIP Handset

April 20, 2005

By Mark Hachman

LONDON-- VOIP provider Vonage has identified a $100 price point as the target for its upcoming VOIP handset, an executive said Wednesday.

Vonage, which is in U.S. beta trials with handsets from VTech and UTStarcom, plans to bring to bring the handsets out in the U.S. at the end of the summer or early autumn, said Kerry Ritz, Vonage's U.K. managing director. Ritz also disclosed that the company is in alpha trials with business customers for video-over-IP conferencing services.

In addition, Boingo Wireless plans to bring out its own VOIP phone through a partnership with SK Telecom, the company's president told an audience at The Wireless LAN Event here.

Although the first phones will be so-called "single-mode" handsets -- WiFi only -- the VOIP companies are already beginning to court and sign deals with traditional cellular providers. So-called dual-mode wireless/cellular phones are on the horizon, forcing VOIP providers to begin talks with traditional cellular service providers.

So why would a cellular provider, which charges by the minute or the packet, want to partner with a VOIP provider that could potentially sidestep their revenue stream? "Sooner or later it's going to happen, with someone," Ritz said. "It's inevitable."

Vonage's business model is to make the VOIP process as simple as possible, Ritz said, meaning that the company hopes to facilitate the process of authenticating the VOIP phone. Logging onto a hotspot often requires a username and password. Ritz said Vonage is experimenting with two solutions, either building in the authentication into the phone that would identify it to a network, or providing an easy method of inputting the login and password directly into the phone.

Vonage also has plans to eliminate the hassle of requiring a separate USB or cable modem, Ritz said, possibly adding the Vonage capabilities to the ADSL modem or router itself. Many ADSL modems also include a built-in firewall, which must be configured to allow the VOIP protocols to be passed through to the Vonage router or access device.

Perpetuating a long-standing practice used by electronics manufacturers, the unnamed Vonage handset will likely cost 100 pounds, or about double the price of the U.S. phone, with the currency conversion.

"For WiFi to go into the cellular handset, we've got to go in [to partnership] with a mobile provider," added Dave Hagan, preisdent of Boingo Wireless. A likely candidate for Boingo would be Verizon, said Stephen Wellman, editor of Fierce Wireless, a wireless industry newsletter.