Hybrid cell phone set to cut costs

A new cell phone about to debut could drastically reduce your cell phone bill by splitting calls between cell networks and less-expensive VOIP over WiFi.

UTStarcom’s new GF200 cell phone, previewed here at CES, combines GSM and VOIP over WiFi. GSM is one of two main types of cell networks used in the U.S., while VOIP is Voice over IP or Internet telephony. The GF200 should become available in the second quarter of this year, although the company hasn’t yet said how much the phone might cost.

WiFi VOIP phones aren’t anything new. We previewed some early models in 2004. But those phones are more cordless phone replacements for home use than cell phone competitors, says Michael Tribolet, executive vice president of Vonage, because people probably don’t want to carry two phones just to have both cell and VOIP access.

How it could save you money

The GF200 looks like just another cell phone, and that’s the point.You get both types of functionality from the one phone that you’ll be carrying around anyways.

Connecting to both GSM and WiFi networks at the same time, and sending a call over either one at the push of a button, might not sound like much. But consider that most people make many, if not most, of their calls from work or from home, and often have wireless access at both places. So any calls made from either location, or anywhere else you can connect to a known WiFi network, wouldn’t use cell minutes. Note: The phone can use WEP authentication but can’t yet connect to hotspots that require Web authentication.

Now add in the ability to configure most VOIP services to forward calls to another number when the VOIP number is unavailable, and you might see the potential of this kind of phone. Give everyone your VOIP number, and if you’re within range of a known WiFi network, you’ll get the call over VOIP. Otherwise the call will automatically be forwarded to your cell service.

Threat to cell phone companies?

This all sounds great for cutting down on cell minutes, but don’t expect to be able to get a GF200 with a new Verizon cell plan any time soon. Howard Frisch, director of Handset Product Management at UTStarcom, said it’s highly unlikely that existing cell companies will want anything to do with a phone that could slash their revenue said.

For that reason, Europe will probably be the first market to see any real distribution, Frisch said. Across the Atlantic, people generally buy their own phones and slip in a SIM card that ties them to a particular company’s network, he says.

You’ll be able to buy the phone online, though, but bear in mind that that you can only use the phone with a VOIP company that will give you the SIP credentials you’ll need to connect to their network. Broadvoice, Sipgate, and some others will, according to Frisch. Other, larger VOIP companies like Vonage won’t release your SIP credentials, he says.

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