KinetoWireless, a supplier of software that helps to transparently hand-off calls between fixed-line and mobile phone networks, on Tuesday said it received $15.5 million in funding from a group of investors including Motorola.
Milpitas, California-based Kineto develops software for companies to build products that integrate fixed and mobile networks. Its customers include Motorola, Samsung, Texas Instruments, and Ubiquisys.
With so-called fixed-mobile convergence (FMC) technology, mobile carriers can extend their sphere of influence into the home or office and onto the broadband network.
Ideally converged phones allow users to move automatically and seamlessly from expensive mobile networks to less-expensive fixed-line networks without dropping or interrupting their calls.
The technology could provide savings to both consumers and business users, and in rerouting voice, data, and video traffic from bandwidth-constrained mobile networks to high capacity broadband networks. It could be a bonanza for mobile carriers.
“This is a land grab opportunity for carriers,” said Chris Gilbert, CEO of Ubiquisys, an early FMC market entrant. “They can win over customers from other carriers with things like free voice calls from your home or free or inexpensive data services.”
However the market has emerged rather slowly. FMC technology has had its problems. Dual-mode WiFi/cellular phones have proven to be battery hogs and converged technologies such as femtocells are not yet ready for commercial introduction.
There is also some question as to whether there is any real market demand for converged phones. A number of analysts believe that neither consumers nor business users are particularly interested in paying for the merging of their fixed-line and mobile services.
“The concept of transparent hand-offs between cellular networks to Wi-Fi is something people perceive as nice to have but the issue is whether it is something people are willing to pay for,” said David Lemelin, senior analyst with In-Stat.
There are a number of existing ways of merging cell phone and fixed line services such as find-me-follow-me, unified communications, and PBX-based integration, Mr. Lemelin said, which will delay demand for dual-mode phones and femtocells.
Still, VCs, carriers such as Deutsche Telekom, and companies such as Motorola, Intel, Cisco, and Google have been quite generous with startups in the FMC market.
Ubiquisys has taken more than $40 million in funding in less than two years from an array of investors including Google, Deutsche Telekom, AccelPartners, Atlas Venture, and Advent Venture Partners.
Ubiquisys markets femtocells, devices that create a micro-cellular technology that acts as indoor extensions of the outdoor cellular network.
In May, Qualcomm joined Cisco, Motorola, and Intel when it made an undisclosed investment in U.K.-based femtocell product maker ip.access.
“It is an attractive market, but it is very early in the game for fixed-mobile convergence,” Mr. Lemelin said.