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Smart Phones Finally Get Smart about Wi-Fi

New software takes advantage of Wi-Fi to make data downloads and voice calls far more affordable.

Software developers may have finally figured out a way to make smart-phone features cheap enough to appeal to the average person. Several new services will offer TV, e-mail, and voice calls on your cell phone at significantly reduced rates, using Wi-Fi.

Downloading e-mail or video clips to a cell phone normally results in high data-transfer rates, subscription fees, or both. But the latest generation of smart phones–cell phones capable of running third-party software–can sidestep most of these additional charges by running software that uses Wi-Fi connections instead of the cellular networks.

Cell-phone carriers are very worried about Wi-Fi because of the impact it will have on their traditional revenues, such as call charges, data, and roaming, says Pete Nuthall, industry analyst for mobile and wireless communications with London’s Frost and Sullivan. “The operators are struggling to keep up,” he says.

Companies like UK-based Truphone, which launched its mobile Internet phone service last week at the Symbian Smartphone Show in London, are likely to have a big impact on the market, he says.

Truphone lets users make calls using Wi-Fi instead of the cellular network, says Alistair Campbell, Truphone’s technical director. “Ultimately, Wi-Fi bypasses it all,” he says.

With Truphone’s software, for example, users pay about one cent a minute for phone calls to most developed countries, provided the call is made in a Wi-Fi hotspot. And when Wi-Fi isn’t available, or the caller wanders out of a hotspot, the software automatically hands over the call to the cellular network.

Similarly, Sling Media, of San Mateo, CA, released software so users can watch live terrestrial, satellite, and cable TV on their cell phone. Users can also operate their home-video hard-drive recorder using their cell phone, so they can “tape” shows they miss.

This kind of mobile TV is radically different from what’s currently offered via the cellular networks, says Stuart Collingwood, Sling Media’s vice president for Europe. Normally, users pay a monthly subscription fee for a bundle of channels. Sling Media’s software puts the user in control and costs nothing when enlisting a Wi-Fi connection to patch into a Sling Box recorder back at home. “I already pay for these channels at home; why should I have to pay for them again?” says Collingwood.

Emoze, a startup in Ra’anana, Israel, is doing the same for e-mail. The company now offers a free push e-mail service for non-business users. This will not only push e-mails to a phone, but it will also automatically synchronize contacts and calendar entries on a PC with those on the phone, in real time.

The software works by effectively treating a PC as though it’s a server. So, at the moment, a PC must be turned on in order for the e-mails to be pushed. But in a few months that will no longer be a requirement, says Benny Ballin, the company’s CEO. Emoze’s software has been downloaded tens of thousands of times since the beta version was launched earlier this year. With the popularity of smart phones increasing, it is likely to become more common for us to check mail on our phones, says Nuthall, but only if the price is right.

The service can use Wi-Fi or the cellular networks, but Ballin says that making it free is important. “[Non-business users] are not ready to pay for mobile e-mail,” he says. Even though major carriers have launched the service, it still has not taken off.

But that could all change with Wi-Fi-enabled applications, says David Wood, executive VP of research for London’s Symbian, which developed the market-leading mobile-operating system of the same name. Having to pay for data is a real disincentive for consumers. And when they do download content or access data services over the cellular networks, they often suffer “bill shock” when they see how much it has cost them.

Existing carriers are going to have to start thinking on their feet if they don’t want to get hurt by the disruptive effects of these Wi-Fi services, says Nuthall.

“We don’t want to trash their business models,” says Nigel Clifford, Symbian’s CEO. But carriers will need to adapt and look at these developments in terms of what they are gaining, not what they are losing, he says.

Unfortunately, Wi-Fi coverage is currently not as widespread as the cellular networks, and many of the hotspots require users to pay for a subscription. Companies like Truphone are trying to increase their coverage by negotiating with subscription-based Wi-Fi providers so that their services will work in those areas as well.

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