The hard politics of convergence

Most cellular operators have been highly resistant, to put it mildly, to converging cellular and Wi-Fi technologies even though it would be a great thing for users. That's why Qualcomm's acquisition of Airgo Networks and T-Mobile's recent convergence announcement are so fascinating -- they are forcing cellular operators to do the right thing.

Such convergence would allow users to choose between cellular and Wi-Fi networks. That, in turn, would enable use of the least expensive available network or the one with the strongest signal. One obvious reason that the cellcos are resistant is that they own cellular networks but not, for the most part, Wi-Fi networks. Somebody using voice-over-IP on a Wi-Fi network is not using his or her cellular minutes but, rather, would be using less-expensive VoIP or Wi-Fi access.

The technology for dual-mode phones -- and the ability to switch seamlessly between the two types of networks -- has been rolling out for the last year or two. Phone vendors are anxious to get into the convergence business because it means selling more phones. Cellular infrastructure vendors are anxious to get into that business because they would sell more base stations and other equipment to the cellular operators. And users who follow this trend also are (or should be) anxious for this type of convergence because it offers more options and, potentially lower prices. It's the cellular operators who are holding up the show.

Except for T-Mobile USA, which recently announced that it is testing a converged system. That makes sense since T-Mobile is a distant fourth among U.S. cellular operators, it is very late to the game with 3G cellular data service and it has an extensive network of Wi-Fi hotspots in locations such as Starbucks. Their announcement didn't elicit even a peep in reaction from the other cellular operators who are busy trying to wring revenues out of their 3G networks.

Now, Qualcomm, which owns a lot of intellectual property related to cellular technology and is a leading vendor of chipsets for mobile devices, has acquired savvy little Airgo Networks, which pioneered the commercialization of multiple input, multiple output (MIMO) Wi-Fi technology. The implication of this acquisition is clear -- Qualcomm will be offering more chips for mobile devices that combine cellular and Wi-Fi technologies.

There's long been tons of convergence technology available and many converged devices have been in the pipeline, but the cellular operators have kept these forces at bay by refusing to embrace them. Now, a major cellular technology vendor is fully embracing convergence and one cellular operator is forced by circumstances to exploit that technology. This increased pressure can only mean that both consumers and enterprises will become more aware of convergence and will start to demand it. And that means that cellular operators that snooze on convergence will lose.