The move marks one of the first agreements between a major telecom supplier and a startup company developing cross-network roaming capabilities.
Once integrated into Nortel's hardware, the Mobility Networks technology will allow Nortel's customers, including wireless carriers Sprint, Verizon and BellSouth International, to integrate Wi-Fi networks into their existing infrastructure without requiring additional hardware.
"Our solution looks like an extension to a General Packet Radio Service [GPRS] network. It connects the Wireless LAN to the same core network for billing, authentication and provisioning," said Naveen Dhar, vice-president of marketing and business at Mobility Networks.
Industry analysts claim the 12-month to 18-month timeframe for cross-network roaming is not caused by the technology but revolves around integrating a billing system into the older billing systems used by the telecoms.
"Many times you will find a new telecom service is free only because the billing is not in place yet. We solved the problem through software," Dhar said.
Nevertheless, the system will not go live until late in 2003 mainly because the commercial applications for the technology are not yet available.
The switching technology will happen intuitively, according to Mark Morell, director of strategic marketing at Nortel. The technology from Mobility Networks will be used for Global System for Mobile communications (GSM), GPRS, and Wideband CDMA networks.
Nortel is partnering with other companies to offer the same roaming between Wi-Fi and CDMA networks.
"As you leave a hot spot and service degrades you will switch to the wide area network and still have the same single bill, same services and applications by integrating GSM, Wideband CDMA and 1X networks," said Morell.
Nortel was not ready to announce any customer trials but Morell said he expected deployments within 12 months.
While telecom providers appear to want integration with wireless LANs, there is still a debate over how WLANs and WANs will coexist and what the model will be in future.
"At present WLAN has a place in the mobile network," said Morell.