Cisco Gets Small Gains From Wi-Fi Collaboration With T-Mobile

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Cisco ( CSCO ) and T-Mobile recently announced a collaborative effort on Wi-Fi calling for businesses. Wi-Fi calling essentially enables customers to roam between cellular and Wi-Fi networks. This addition can benefit businesses by lowering their mobile service costs, and it can help Cisco gain share in wireless LAN market.

T-Mobile will look to establish Wi-Fi calling as one of its distinguishing features in order to gain corporate penetration and challenge other carriers like AT&T ( T ), Verizon ( VZ ) and Sprint ( S ). However success is likely to be driven by the extent of cost savings the businesses can make and whether it justifies their decision to switch the carrier.

You can see the complete $24.04 Trefis price estimate for Cisco's stock here.

Benefits of Adding Wi-Fi

Wi-Fi calling feature provides two main benefits to users: improved coverage and cost savings. Cellular network signals can be weak inside a building or a house, and if a Wi-Fi network is available, this feature would provide better coverage by offering a way to stay connected via a Wi-Fi network. Additionally, T-Mobile states that businesses can avoid expensive international roaming charges using Wi-Fi calling, which would directly translate into cost savings for businesses that operate globally or for business travelers.

Cisco's Role

Cisco's wireless LAN infrastructure provides support for Wi-Fi calling. If this technology picks up, Cisco can benefit by increased share of wireless LAN market . However wireless LAN products form a very small portion of Cisco's value and thus potential upside to our price estimate is limited.

Cisco's support is currently available for Blackberry and Nokia devices. While there has been a significant shift in smartphone purchases to android-based devices and iPhone over past few quarters, Blackberry still dominates the corporate world. Thus Cisco is poised to gain some share should the adoption of Wi-Fi calling pick up.

You can see the complete $24.04 Trefis price estimate for Cisco's stock here.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks , US Markets

Referenced Stocks: CSCO , S , T , VZ

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