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August 10, 2007

T-Mobile Might Make Home VoIP Play on Top of Converged Calling

By Glenn Fleishman

News outlets are reporting on the FCC filing by T-Mobile for a VoIP/Wi-Fi router: The filing shows an unannounced Linksys WRTU54G Wi-Fi router, much like the ones that T-Mobile is selling along with its HotSpot@Home service to ensure the best quality of service and battery performance for their Wi-Fi/cell handsets when used in the home. The only difference? The router up for certification has two phone jack plugs, similar to those found on telephone adapters used for VoIP services, including other models sold by Linksys.

The fact is that unlicensed mobile access (UMA), the technology underlying T-Mobile’s converged calling plan, matches regular GSM calling over cellular networks with VoIP over the Internet via Wi-Fi. The VoIP part is encrypted using GSM technologies, but between the Wi-Fi/cell handset and the Internet portal on T-Mobile’s network where the voice conversation pops out, the call has all the problems and benefits of pure VoIP.

Writers at TG Daily (the original source of this information) and News.com mistake the reason for the router’s ability to accept up to two GSM SIM cards. The writers talk about how it might be “merely a way to get up to two phone numbers into the WRTU54G” (TG Daily) and that the cards “would also allow users to add up to two additional cell phone lines” (News.com).

Not right. To perform GSM authentication and encryption, a device has to have a SIM. For the router to work interoperably with T-Mobile’s UMA gateways, it has to make VoIP look like encapsulated GSM, which means that a SIM is required. A UMA handset treats a Wi-Fi network like another cell tower. A router with landline-style phones that can make UMA VoIP calls only on the Internet side is actually three layers of pretense: A landline phone is pretending to work like a landline phone; the router is pretending it’s on a GSM network; calls placed are pretending that they’re being made from a cell handset.

It’s a little contrived, but it allows T-Mobile to leverage 100-percent of its existing infrastructure, with perhaps a slight increase in cost on the SIM side. The routers don’t add any additional cost to T-Mobile handling calls, except increased call volume, but 100 percent of that volume would come on the Internet side, far cheaper to handle than on the cellular side.

The big issue in my book is pricing. T-Mobile’s requires at least a $40/voice subscription to use HotSpot@Home. You can then pay $10/month for one line or $20/month for two to five lines for unlimited Wi-Fi minutes, or choose to use minutes from your cell pool for Wi-Fi calls. (The rate rises this fall, apparently, to $20 for one line and $30 for multiple lines, but the initial rate applies indefinitely to anyone who signs up in the early period.)

Would T-Mobile decide to include the one or two lines in the Linksys router as FamilyTalk additional lines, lumping them into the monthly multiple-line fee, in the interests of making sure to capture more revenue, and perhaps convert more family members on the cell side? Or would there be an additional fee, perhaps $10 per month, to acknowledge the additional calling that would take place? Would integrated voicemail across multiple lines be provided? Could you easily forward your cell to the landlines so that as you arrive home, your calls come in on a cordless not a cell? Is this another tool in T-Mobile’s arsenal against Vonage et al.?

A lot of questions remain to be answered, but it could be a unique combination of services that would increase ARPU (average revenue per user), especially in families, while decreasing the cost of delivering service, and decreasing churn.

Posted by Glennf at August 10, 2007 1:48 PM

Categories: Home, Voice

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