T-Mobile USA officially rolled out its new T-Mobile HotSpot @Home dual mode cellular/WiFi service in Seattle on Monday – however, it can be argued that the service is still very much in the “beta” stage.
The new wireless service - which has been undergoing trials in Seattle for about the past two months with a group of about 300 users - lets T-Mobile’s subscribers make free phone calls using their at-home WiFi network or from any number of public WiFi hot spots which have been set up throughout the city. For now, only subscribers using the Nokia (News - Alert) 6136 and the Samsung (News - Alert) T709 dual mode phones can place free calls over WiFi.
The service provides “seamless handover” between cellular and WiFi networks via UMA (Unlicensed Mobile Access) technology. T-Mobile claims the hand-off is so smooth that users can’t tell when they’ve been switched to a different network.
The advantage of the service for subscribers is that it lets them conserve their cell phone minutes and make free mobile calls anywhere in the U.S. (In its publicity on the rollout, T-Mobile hasn’t divulged how many hot spots it has deployed - nor is there any news, as of yet, as to how many customers are actually using those hot spots.) Another advantage for users is that once they are in a hot spot, they gain access to a higher speed network which allows them to download mobile content including Web pages, music files, video files and games - much faster than they can from a 2G, or even 3G wireless network.
T-Mobile’s UMA network enables a dual mode phone to automatically detect a hot spot and switch over to WiFi mode as soon as it comes in range (i.e. as soon as the signal is strong enough). Conversely, it automatically switches back to cellular when the user exits the hot spot. Although other carriers have offered services which allow subscribers to make free calls using their home WiFi networks, T-Mobile will be the first US carrier to roll out a nationwide network providing “seamless handoff” capabilities, with public hot spots that can be used by any of its subscribers. Other US carriers are planning to build similar networks, including Sprint Nextel, which is partnering with four cable companies to launch a similar service, and Cingular (News - Alert), which is reportedly testing its own flavor of dual-mode wireless in its labs.
On a global scale, however, T-Mobile is not the first carrier to introduce such a service. That credit goes to British Telecom (BT), which introduced its Fusion VoIP service, featuring dual-mode, seamless handover between cellular and WiFi, in the fall of 2005. The service is based on the pre-3GPP GAN standard. Today, the Fusion service uses Bluetooth in phones supplied by Motorola (News - Alert). Also, in August of this year, TeliaSonera launched a similar WiFi based UMA service called “Home Free.” Then, in September of this year, Orange announced its “unik” service - the largest network of this type to date - which covers more than 60 million of Orange’s mobile subscribers in the UK, France, Poland, Spain and the Netherlands. Also launching a UMA-based service in September was Telecom Italia.
People who live in the Seattle area who want to try out the new T-Mobile service can sign up for it - and buy the required phones - on T-Mobile’s Web site at www.theonlyphoneyouneed.com. For a limited time, T-Mobile is offering either the Nokia 6136 or the Samsung T709 for $49.99 with a two-year contract, or $99 with a one-year contract. T-Mobile is also offering a D-Link WiFi router optimized for the service for free with a mail-in rebate (it should be noted, however, that any home WiFi router can be used). The WiFi functionality costs an additional $19.99 a month.
Still no word yet on when T-Mobile will be expanding the service to other areas of the US.
One thing which is yet to be explained in detail is how the technology works, and more precisely, how billing will take place. For example, if a user initiates a long distance call from a WiFi network but then roams to outdoors and switches over to a cellular network, does that mean they are billed only for the minutes they spend on the cellular network? If so, then how will T-Mobile accurately keep track of how many minutes are used on the WiFi network and how many are used on the cellular network? Similarly, what happens if a user initiates a call on a cellular network and then enters a hot spot? Are they charged “cellular rates” for all the minutes of that call – or does the call become “free” mid-way in the session? Will customers have to keep track of how many minutes they spent on either network in order to safeguard themselves from over-billing? The financial model for the new service seems to have been purposely left vague. Perhaps the most important question for users is: Will this new type of service open the door for wireless providers to either knowingly or unknowingly “cheat” their customers out of minutes which were actually spent on a WiFi network? Even if it is only a minute here or there, per user, multiply that times millions of users and it could add up to millions of dollars per year in additional revenue for the carriers. (For now, when it comes to advanced mobile services such as Web browsing, video downloads and music downloads, obviously the user will have to stay within the hot spot in order to stay connected to the higher speed network – but that will change as more wireless providers launch 3G and other advanced services.)
Another question which many people are asking is: How many of T-Mobile’s customers will actually make use of the new WiFi service – and if a majority of them do make use of it, what impact will this have on T-Mobile’s profits? Since the WiFi calls are “free” (not including the standard sign up fee and the flat fee for the WiFi service), what happens if users suddenly start making a majority of their calls using those networks? Perhaps this is part of the reason T-Mobile is rolling out the new service slowly – and only in selected markets.
T-Mobile, which is owned by Germany-based Deutsche Telekom (News - Alert) (News - Alert), made news on TMCnet in September when it announced that it had purchased $4.2 billion worth of spectrum licenses through the Federal Communications Commission’s spectrum auction, which will double its capacity in the top 100 markets in the US. As TMCnet’s Robert Liu wrote in his article, the company plans to spend another $2.66 billion in the next few years using that spectrum to upgrade its 2.5G cellular network to 3G technology so that it can compete with the other three major U.S. carriers: Cingular Wireless, Sprint Nextel and Verizon Wireless.
(Editor’s note: TMCnet contacted T-Mobile to get responses to some of the questions raised in this article. The company gave us the following response: "Consumers in greater Seattle are currently able to purchase T-Mobile HotSpot @Home products and service through a pilot program at 24 Seattle-area T-Mobile retail stores. The service, along with the supporting handsets and routers, are not currently available for purchase beyond the Seattle market. T-Mobile HotSpot @Home service is based on Unlicensed Mobile Access (UMA) technology and makes use of available Wi-Fi networks for voice calls and data services, in addition to T-Mobile’s robust GSM/GPRS/EDGE network. The service provides great coverage in the home, and offers unlimited nationwide calling for one low price for calls placed over Wi-Fi connections at home or at any T-Mobile HotSpot location nationwide. T-Mobile is not commenting on future plans for the service. However, consumers can learn more about T-Mobile HotSpot @Home, find participating store locations, and register to be informed when T-Mobile HotSpot @Home service will be available in their area at www.theonlyphoneyouneed.com.")
Patrick Barnard is Associate Editor for TMCnet and a columnist covering the telecom industry. To see more of his articles, please visit Patrick Barnard’s columnist page.