Tech giants abuzz over VoIP for cell phones

ATLANTA--Sun Microsystems and other tech giants are calling Internet phone technology the cell phone industry's next big thing, saying it will help solve old problems and create new services.

Sun CEO Scott McNealy announced Monday at the CTIA Wireless 2004 show here that Internet phone calling technology known as voice over Internet Protocol (VoIP) is playing a key role in a device the company is developing in an effort to eliminate the office phone.

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Sun, which supplies software for cell phones, said the technology, currently a prototype, is based on the company's Java Card, which lets smart cards and other devices with limited memory securely run smaller Java applications, called applets, on any computer. VoIP will let the device divert calls meant for an office phone to any computer or cell phone someone happens to be using, McNealy said.

"It eliminates the black phone on your desk," he said. "This is my fantasy.

VoIP is a technology for making phone calls via IP, the world's most popular method for sending data from one computer to another. After years of overpromising and underdelivering, VoIP is generating significant interest among telecom carriers, corporations and consumers, thanks to significant improvements in quality of service.

Carriers are already embracing VoIP as a way to cut traffic costs on international and long-distance calls, and it is expected to eventually replace the public switched telephone network, as big phone companies convert to IP-based fiber-optic networks. Currently, about 10 percent of all international voice traffic is classified as VoIP, although less than 1 percent of those calls are initiated on a VoIP phone.

Internet telephony services typically promise customers a smaller phone bill, virtually wiping out charges for long-distance and international calls. In addition, connecting phone calls over the Internet opens the door to advanced communications services that tie voice together with e-mail, instant messaging and videoconferencing--something Microsoft and others are already working to achieve.

Sun's development is an example of how cell phone service providers, handset makers and wireless application writers are beginning to embrace VoIP beyond using it as a cheaper way of sending calls over wired networks.

Nextel Communications, one of the biggest proponents of VoIP, uses a form of wireless VoIP in its popular DirectConnect push-to-talk feature, which works just like a walkie-talkie.

VoIP is also on the minds of executives at Verizon Wireless, the nation's largest cell phone service provider. The carrier is building a $1 billion wireless broadband network that's fast enough to create a high-quality VoIP telephone service, Executive Vice President Richard Lynch said. But Verizon has yet to decide whether it will take that step, Lynch added.

The new network "has the preliminary promise of being an adequate carrier of VoIP," Lynch said. "But there are a lot of improvements that need to happen first."

Cisco Systems, already a major VoIP phone and switch maker, believes that the technology will play an enormous role in the shift modern communications are making to what the company calls "IP mobility."

"My executives told me they think 'IP mobility' could be a $1 billion market in three to five years," Cisco CEO John Chambers said. "I challenged them to think of it in bigger terms."