Wi-Fi Phones May Challenge Traditional Wireless

Earlier in the week I wrote a post about the inexorable spread of Wi-Fi and how "21st-century" businesses (i.e., ISPs and wireless) are going to be challenged and that currently fat revenues may dry up sooner than anyone expected.

Now Vonage has announced a Wi-Fi phone that will enable calls from any Wi-Fi hotspot. There will be more such phones soon. So, eventually when we have nearly universal Wi-Fi, there will be unlimited calling for an extremely low cost at home and at hotspots (which can be as broad as a municipality or a giant rural area).

But into the foreseeable future, Wi-Fi won't work when you're in the car. So wireless carriers will still have a role for some time. But, as a practical matter, traditional telcos and their wireless subs will feel more and more competitive pressure and downward pressure on pricing. However, bundling may protect subscriptions (voice, data, Internet) for a while.

Recall Meg Whitman predicted that basic calling would be "free" in just a few years.