VoIP firm Vonage tests routers for mobile service | CNET News.com

Vonage, Nextel and certainly others are hard at work preparing to offer wireless VoIP also know as wVoIP. The NXTL plan cost $40 per month for unlimited service through 7,000 Boingo hot-spots.

Using the "Fool" terms, this application is going to be a rule breaker. Consumers are going to be the big winners. Land line based phones will quickly fade in importance. Six percent of all cell phone users do not have a land-line phone. This number will grow dramatically when VoIP becomes commonly available. Why pay for a "home" phone if your wireless phone gives you unlimited calls through your home wireless router?

Profit margins for cell phone companies comes in several ways. First of all the actual cost to provide a minute of cell phone use is virtually nothing if the towers and other equipment are already amortized. As systems are built-out and equipment is amortized the "accounting" profit per minute of use goes up. Secondly, the number of phones required is increasing. Households that decide to not pay for a seperate home phone will likely pay for a seperate phone for each family member. Marilyn and I find that we use our individual cell numbers more and more. Finally new data or internet services are being offered. Cell phones are trying to be the gateway for music and other services. Thus when Apple and Motorola built a combo phone and i-Pod, the phone companies refused to offer it for sale unless they are offered a cut on the song downloads.

Times are truly changing. My 83 year old mother is easier to catch on her cell phone. Her land line is a Vonage phone and when visits her children, it is nice that it rings at the house of my brothers or sisters.

NXTL and other cell phone companies will not see the explosive growth of the past. The maximum most consumers will pay per month has been capped because of unlimited "free" service through computer networks. Still, NXTL should experience steady growth and declining costs.

is likely to come public this year. It will probably come at a very dear price. I see companies such as NXTL being the real competition for Vonage. The NXTL-FON deal will close soon. When the equipment is readily available, combo phones sold by the cable companies will include unlimited VoIP calls and cell phone minutes supplied by FON-NXTL. This is when the growth will accelerate. Whether you are ready or not, in a few years, most people will only have one phone number and they will have it with them most of the time. Thankfully voice mail and call screening will save us from getting calls that we do not want.

Buy the Big Bull Boom Bubble. This market is starting to cook a number of hedge fund frogs. I'll write more about this later.