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The Magnolia Ventures
Technology Business Report

More on 3G and VoIP
Wednesday, August 17, 2005

For a while now, I've been wondering whether the new 3G data services from Verizon and Sprint (CDMA-EVDO, not that TDMA crap that's infested Europe and has Cingular and T-Mobile in a pickle) would be capable of handling VoIP calls. After all, the speed ratings are supposed to be north of 300 Kbps, so why shouldn't it work.

Well, it appears that a few gadget heads and geeks have started testing and using a variety of VoIP services across Sprint and Verizon EVDO data networks. These tests include Skype, Vonage's softphone and others. In theory, any of these services should work as they typically only require about 100-150 Kbps of bandwidth to operate.

The implications are interesting here. By way of example, I now use Time Warner digital cable for my home's broadband connection and I have attached a Packet8 VoIP device for our primary line phone service. In essence, I am no longer using a twisted pair of copper wires to get phone service. So what? Well for starters, my entire home phone bill is now just $20. No taxes, surcharges, feature paks (who thought of removing the 'c' in 'pack') or other fine print charges. And, the feature set is integrated in my Packet8 service is far more robust than even the best copper wire services.

By extension, the new data services from Verizon and Sprint, which coincidentally are both priced for about $80/month for unlimited data, are capable of supplanting their own voice services. That is, anyone with a PocketPC or similar device with an EVDO card and a softphone app (like Skype) can now have unlimited mobile calling using VoIP. This interesting, especially if you are using a common service like Skype (meaning a lot of free calls) or if you use a VoIP service provider like Vonage that bundles a softphone in with your account (meaning lots of free calls).

So, why should anyone be interested in this? Two reasons. First, because it is further evidence of the impending doom of TDMA across all phone/data networks -- for the benefit of CDMA. Second, because it has significant implications for the telecom world and the converged device makers that operate in this space. Increasingly, it will be incumbent on a consumer electronics manufacturers to include a PCMCIA or CF slot (or similar for your EVDO card) and an OS that supports a multitude of softphone apps (think Microsoft). There is an interesting opportunity for the development of a cross-platform softphone (e.g., java app) that could work on any OS. And, the next step from there is to enable that same Java app to work on any regular EVDO mobile phone (i.e., non-smartphones), allowing users to choose whether they want to place their mobile calls using their voice plan or their data (VoIP) plan.

I hope someone makes it simple to use.

About the Author

Michael Taus is the Managing Director of Magnolia Ventures a startup and venture finance business consultancy. He has been involved in the growth and development of network-related technology companies since 1996, including Rent.com (acquired by eBay) and Genutec, the nations largest provider enhanced communications service. He currently sits on the board of directors of Genutec and is an advisor to a number of early-stage companies.

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About the Author

Michael Taus is the Managing Director of Magnolia Ventures a technology incubator and venture business consultancy, and Aquo Interactive, a software development and Internet marketing firm . He has been involved in the growth and development of network-related technology companies since 1996, including Rent.com (acquired by eBay) and BigLinx, a proprietary search engine marketing service. He currently is an advisor to a number of early-stage technology companies.

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