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China Telecom plans combined phone/WiFi mobile network with Calypso

>This could be 3G's biggest nightmare. Claiming to have a truly foolproof technology to switch cellphone users to and from WiFi, Calypso Wireless has done a $500 million deal with a Chinese phone network, due to roll out over the next three years. It is also "in negotiations with one of the largest cable companies in the US" to use this technology. And field trials in four (or more) European countries are due to start in January.

The deal is not actually secret - but it has been kept "very low profile" till now, admitted Calypso's VP of sales, Mark Sujo today.

Now that it is publicly acknowledged, it will cause incredulity in many circles, where experts say it is "virtually impossible" to switch seamlessly from a cellular phone call to a Voice Over Internet Protocol (VoIP) link using WiFi.

Calypso is claiming a breakthrough, however, by offering a complete infrastructure solution. It is also offering a classic franchise deal, allowing home users to get a rebate on their broadband bills if phone subscribers use their open wireless LAN for calls. "It will work on any access point, if you download our switching software," said Sujo.

The company has just announced a White Paper which explains its ASNAP technology for "Automatic Switching of Network Access Points" This is installed in the cellular carrier's network; it links the phone network, via the Media Gateway Controller, to the Internet:

"It automatically synchronises with the mobile carriers' ASNAP Call Control Media Gateway to route the call (or data) from the cellular base station controller (BSC) to the local WLAN or a standalone IP wireless receiver," says the corporation.

The news of a Chinese development struck some observers as unlikely, at first. "There's practically no WiFi at all in China," said one source in that country. "So it's not much use launching a WiFi phone."

However, the logic of the deal would be pretty sound, if the China Telecom idea is to roll out their own WiFi hotspot network in metro areas; and especially sensible if it will "seed" private rollout of phone-connected hotspots. That, said Sujo, is exactly what is planned.

Sources say that the contract between Calypso and China Telecom is due to start shipments early next year - possibly as early as March. Mark Sujo said that the first production shipments - of phones, WiFi access points, and the special Media Gateway Controllers which link them - will start "either Q1 or Q2 2004."

How has the deal escaped notice so far? Sujo thinks it is because he hasn't emphasised the WiFi breakthrough. As a result, trade publications have, largely, ignored Calypso's publicity statements recently, with only Cable Datacom News briefly reporting the "negotiations" with a cable company in the US. The China Telecom announcement, made in February, was carried only as part of a press release republishing service by the 3G web site in the UK. At that time, nobody paid much attention to the fact that it was going to be a dual GSM/WiFi phone, probably because they believed it couldn't be done.

Experts remain sceptical. "I'll be convinced by the idea of 'completely seamless' switchover from cellular networks to WiFi when I see it working," commented consultant Dean Bubley of Disruptive Analysis.

"They're also going to have trouble building a phone with useful battery life in the short term, because until the Broadcom WiFi chipset ships in volume, most 802.11 standard wireless is not set up to economise on power consumption," he added. He wasn't alone, with other experts proclaiming that existing WiFi chips would burn up too much battery power, until the new Broadcom chipset ships next year. Bubley pointed out that there is a low-power Agere chipset for 802.11, but not for dual mode WiFi and GSM.

Mark Sujo says that the technology has been under development for 5 years in the company's Miami, Florida headquarters, and insists that battery life is not an issue.

"We're offering 300 hour standby battery life, and 11 hours of talk time on GSM/GPRS," he said, "but the WiFi battery life drops to only three hours of talk time."

But Calypso says it isn't using the new Broadcom AirForce One chip set for low power WiFi; "We have another supplier, using standard 802.11 chips," said Sujo. "We have a second microprocessor in the phone, which handles power management."

Around 200 prototype phones will be completed in the next few weeks, and shipped to trialists: two UK phone operators in January, along with other trialists in Italy, Germany, America and Asia. The only name which Sujo would release at this stage was that of AT&T Wireless. However, the company has announced that it is doing trials with Enitel - a mobile carrier partially owned and operated by Swedtel, which is in turn owned by a holding company jointly owned by TeliaSonera and Industri Kapital.

Calypso has also announced a "successful demonstration" of ASNAP technology on T-Mobile's GSM/GPRS network in Miami, switching back and forth from WiFi to GSM. Sujo admitted he was planning trials in Germany, too, which is where T-Mobile is headquartered.