Network vendor Nortel reckons voice on Wi-Fi could be the ultimate cost-justification for office wireless LANs. It is part way through a $6 million voice-on-Wi-Fi project that it reckons will save it $28 million in one year - by giving all Nortel employees a soft-phone on their laptop and/or PDA.
Most of the huge savings will come from cutting the company's mobile phone bill, says Nortel marketing "leader" (new job title on us) Peter Finter: "We are seeing home-based workers reduce their mobile phone bill by shifting phone calls their fixed rate broadband connection." Executives will save 60 percent of their mobile bills as well, by using hostpots instead of mobiles for calls abroad, and the mobile sales force is going to save 40 percent of its bill by synchronising at hotspots.
Wireless networking alone had a weak cost-benefit case, said Finter, but if it is used to cut the vast amount spent on mobile calls it can save plenty of money. People use expensive mobiles even within their office building, if they are away from their desk, which has led BT to propose routing in-buiding calls over Bluetooth. Other parts of Nortel support DECT for in-building digital voice, and there are opportunities for the three standards.
Finter shrugged off the obvious potential drawbacks to such a scheme, the difficulty in weaning users off their cellphone onto a softphone that might be clumsy, and the likely poor quality of voice over IP. "People's quality expectations have been moderated by the cellphone," he said, meaning that people have already sacrificed call quality for mobility, so they can be moved across to IP phones.
And users will use the softphone in preference to their cellphone because the system routes calls to it: "the laptop IS your office phone," said Finter. The laptop or PDA will ring, and it contains your Outlook phonebook, so will be easier to use than the mobile.
In future, the system will be extended to include multimedia communications, with whiteboards and videoconferencing, so the pitch offers benefits as well as cost-savings, said Finter: "it's not just about phone calls."
But seriously - payback in three months? Has Nortel really included all the costs its customers would have to pay, or when it eats its own dogfood does it get it cheaper? Not according to Finter. "We are fairly typical of a large user."
The company is using its own softphone and network equipment, which is designed to handle hand-offs between access points but is paying itself for them properly, as well as using a third-party service provider to manage the project. Users are given plug-in or Bluetooth headsets, and the training costs are minimal because the softphone is configured to resemble the office phone. "The $6 million includes all the costs associated with the project," said Finter.
Our reaction? The cost savings sound too good to be true, and we hope to see more details in future. The project has only just started ("We have some sites up and running already," said Finter), so some figures may be fairly theoretical at the moment.
We wonder if Nortel is assuming that profligate executives with huge mobile bills, will also be obedient and tech-savvy when the scheme requires them to. In reality, we would guess that such schemes will deliver less than expected, unless the softphone can be made really attractive compared with the mobile.
If the costs really do come in as Nortel claims, then naturally the floodgates will open and we can expect a rush of other businesses to follow suit, slashing their phone bills at a stroke. Ironically, if this really does happen it will have the effect of royally annoying Nortel's biggest customers, the mobile phone companies, who are relying on that money to pay for the roll-out of 3G.
A much-needed note of caution came from analyst Richard Webb of Infonetics Research: "Many companies prefer to take mobile charges on the chin," he said. "They have the attitude that they are big companies and can afford them." However, if the savings are even half of those claimed by Nortel, then we should all watch this space, and make sure that our wireless LAN investments are made with the possibility of voice in mind, since early systems may not be adequate.
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