Friday, April 23, 2004

IDT uses Wi-Fi to offer cheaper cell service
By Paul Davidson, USA TODAY - IDT uses Wi-Fi to offer cheaper cell service: "

Believe it or not, 43% of U.S. consumers still don't have a cell phone - many for budget reasons.

Now, long-distance company IDT is aiming at low- to moderate-income holdouts with a new breed of inexpensive service that offers mobile service but only in certain areas. IDT plans to introduce a semi-mobile phone service that works in areas equipped with Wi-Fi, a popular wireless technology linked to the Internet.

The strategy could pose at least a modest threat to the big wireless carriers as it marries two hot new technologies: Wi-Fi and Internet-based phone service.

The service price will be no more than $2 a month, with calls costing less than 5 cents a minute; initially, customers will likely prepay. Unlike with cell phones, incoming calls are free. While IDT initially will give away the phones equipped with Wi-Fi chips, they will eventually cost about $100.

In two months, IDT says, it will roll out the service in the Ironbound area of Newark, N.J., blanketing the 2-square-mile neighborhood with Wi-Fi antennas and offering the phones and service at local stores. The firm plans to add a few more undetermined cities by September and about a dozen by year's end as it sets up Wi-Fi zones in areas such as senior-citizen or affordable-housing complexes. There, the handsets could serve as both the home phone and semi-mobile phone.

However, the phones also will work in any area with an open Wi-Fi network, which today lets Wi-Fi-enabled laptop users get broadband access.

Fee-based "hot spots," which offer access to Wi-Fi devices within 300 feet of an antenna hooked to a broadband line, are popping up in coffee shops, hotels, airports and even McDonald's.

But a growing number of cities, including Seattle, San Francisco and New York, have large swaths of free spots. Many college campuses are also Wi-Fi equipped. As a result, IDT may offer the phones and service nationally via the Web or toll-free number. The company's target audience includes immigrants, college students and seniors.

"We're creating a new industry ... that can provide affordable phone service for everyone," says Jim Courter, CEO of IDT, a leading provider of prepaid calling cards.

The handsets' Voice-over-Internet-Protocol, or VoIP, technology offers low-cost phone service by sending calls as data packets over proprietary data lines or the Internet. IDT will route the calls over its VoIP network.

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