Profile: Strata8 Networks

Startup hopes to lower cell phone costs within the enterprise

Nancy Gohring  / InfoWorld
Fri Jan 18, 2008 7:24 AM ET

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.

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 $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.

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