Strata8 Networks Hopes to Lower Mobile Phone Costs in the Office

Company offers enterprises cellular service inside corporate offices at a flat rate.

Strata8 Networks, which officially opened its doors for business on Thursday, is offering a new twist on helping enterprises to lower their cell phone costs.

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The company, which has its own cellular spectrum licenses, offers enterprises cellular service inside of their corporate offices at a flat rate. Strata8 customers place a small base station in their building to provide coverage to workers using standard cell phones. The phones connect to the corporate cellular network while in the office but roam onto a commercial network elsewhere.

The Bellevue, Washington, company is unique among others offering products that extend cellular coverage indoors in that Strata8 uses its own wireless spectrum. The spectrum, in the 1900Mhz band, is the same kind used by most of the nationwide mobile operators and is owned by Strata8's parent company, Wirefree Partners.

Enterprises pay US$25 per user per month for the service, which includes unlimited calling to co-workers in the organization as well as to any other Strata8 customer. The base station connects to the enterprise's existing phone system, so long-distance and international calls cost the same as they would from a desk phone.

The service should allow customers to save money by cutting back on their cell-phone service plans, according to Andy Wilson, executive vice president of marketing for Strata8. Craig Mathias, an analyst with the Farpoint Group, said many reports have shown that more than half of calls made from within offices are made over cell phones.

But while calls from desk phones are generally cheaper than calls made from cell phones, companies should look at various factors to determine whether Strata8 would save them money, Mathias said. For example, some enterprises may not to be able to negotiate lower rates than they already get from their cell phone provider, so Strata8 would end up being an additional cost.

Instead of Strata8, an enterprise could use a converged Wi-Fi and cellular service, where calls over the Wi-Fi networks are free and Wi-Fi access points are relatively inexpensive. However, that setup could require many Wi-Fi access points and also requires end-users to choose from just a few expensive phones currently available to work with such systems, he said.

In addition, Wi-Fi networks use unlicensed frequencies and so can run into interference problems. But if an office building isn't using other equipment that might interfere, and if it isn't near other businesses using a similar system, converged Wi-Fi and cellular services should work well, Mathias said. Still, Strata8's offering is a clever idea that could work well for some enterprises, he said.

The base stations that Strata8 uses, called pico cells, are made by UTStarcom and use the CDMA (Code Division Multiple Access) mobile technology. Enterprises must pay for the pico cells; Strata8 said the price varies depending on the site.

One pico cell could cover a 10,000-square-foot building, but all structures present different challenges, Wilson said. Some deployments might require additional repeaters to extend coverage. Strata8 will hang the equipment for customers or train IT managers to do it themselves.

Strata8 is in final negotiations on a roaming deal with a cellular operator, but Wilson said he couldn't reveal which one. Verizon Wireless and Sprint Nextel have nationwide CDMA networks.

For now, end-users can choose from just five phones that work with the Strata8 system, including the Moto Q, Treo 700wx, Razr V3 and two HTC handsets. While any CDMA phone will work in theory, these selected phones support roaming between the Strata8 and the wide area cellular network.

Other companies such as RadioFrame, also from the Seattle area, sell pico cells that help improve cellular coverage for enterprises. However, Strata8 has advantages because its system connects to an existing corporate telephone system, reducing the costs of calls for enterprises, according to Wilson. In addition, because Strata8 is using its own spectrum, it was able to set the flat rate monthly fee, he said.

Strata8's service is available in some cities on the U.S. Virgin Islands and regions of nine states including Florida, New Mexico, North Carolina, Ohio, Indiana, Kentucky, Texas, Virginia and Washington. The company said it has a few customers already but declined to reveal their names.

Copyright © 2008 IDG Communications, Inc.

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