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Telcom industry chases wired-wireless links By Justin Hyde CHICAGO (Reuters) - With traditional telephones in decline and wireless service on the rise, the Supercomm telecommunications trade show was full of vendors hawking the next big idea -- making the two networks act as one. Phones and equipment that could combine mobile and traditional services, mainly by using cheaper Web-based calls sent over short-range wireless networks known as Wi-Fi, were hot items at the convention. At least three U.S. telecommunications companies -- SBC Communications Inc. (SBC.N: Quote, Profile, Research) , BellSouth Corp. (BLS.N: Quote, Profile, Research) and Sprint Corp. (FON.N: Quote, Profile, Research) -- have said they plan over the next several months to sell services based on telephones that essentially act as cordless phones when near a Wi-Fi signal and cellular phones everywhere else. While their first efforts will be aimed at business customers, SBC and BellSouth both say they plan to offer such services through their Cingular Wireless joint venture to residential consumers sometime in 2006. Some international companies, including BT Group (BT.L: Quote, Profile, Research) , are launching similar services this year. Demand for such phones will be small at first, says industry analyst Jeff Kagan, but will grow dramatically. "Over the next several years, people are going to get used to their cell phone as their only phone," he said. "That's when this whole thing will flip, and we'll all go to Wi-Fi-cellular phones." ABI Research analyst Philip Solis estimated in a report last month that by 2010, annual sales of "dual-mode" phones could reach 100 million. Several companies, such as UTStarcom (UTSI.O: Quote, Profile, Research) , already sell handsets that can only carry voice calls over Wi-Fi connections, and UTStarcom plans to sell a cellular and Wi-Fi dual-mode phone later this year. What's driving these trends in the United States is a combination of market forces and the control traditional telephone companies have over their wireless arms. While wireless usage continues to grow in the United States, so does the cost of expanding wireless networks and buying radio spectrum rights. Growing wireless use has moved traffic off old-fashioned voice networks, making them less efficient and more costly to run. And more voice calls are being transmitted as Internet data, which allows for easier handling across several networks.
http://www.microsite.reuters.com
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