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GigaOm confirms T-Mobile will add free Wi-Fi calls to its UMA-capable phones: T-Mobile tried an alternative to femtocell and unlimited calling plans several years ago, allowing unlimited domestic calls over Wi-Fi for handsets with unlicensed mobile access (UMA) technology built in. UMA allows seamless roaming between Wi-Fi networks and the cell network, handling the billing and call details on the back end.
After a few years, however, even after making the add-on price as low as $10/mo for a family plan for unlimited calls that started on Wi-Fi (either placed or received on a Wi-Fi network at home or a hotspot), T-Mobile stopped offering the service to new customers. Apparently, it continued to be available as a calling option, with Wi-Fi calls being deducted from general minute pools.
Now, T-Mobile is making Wi-Fi calling free to postpaid Even More and Even More Plus customers (those that have had a credit check and pay at the end of a billing cycle). These customers need a UMA handset, which includes many BlackBerry models, and have to opt in to the free service.
In truth, it never left them: New Android-based phones from T-Mobile will include unlicensed mobile access (UMA) calling that allows talking over Wi-Fi or cellular networks without using special apps or VoIP as such. This is a change in tactics for the firm, which deprecated UMA for the last year or more. The service isn't yet available, nor was pricing discussed in the press release.
T-Mobile introduced converged Wi-Fi/cell calling using UMA four years ago; I wrote one of the first articles about this for The New York Times as it was launched in the Seattle area. The service slowly rolled out nationally, and, as far as I could tell, was a hit among the sweet spot of the audience. That was people who had poor coverage in the home, rather than those exceeding their cellular data pool.
Unlimited cell plans started percolating out a couple of years ago, and T-Mobile's offer there trumped any advantage from the flat-rate, unmetered Wi-Fi calling service. (UMA's other advantage is seamless handoff between Wi-Fi and cell during a call, also not an issue with unlimited calling.)
At some point in the last year, the company's UMA details started to disappear, and new phones weren't featuring UMA. As far as I recollect, only a few BlackBerry models could be purchased new with UMA, although existing converged calling customers could use the service without a change. And T-Mobile pushed the service for businesses, where UMA could integrate right into the enterprise's Wi-Fi network, providing better pricing and call quality than use of a plain cell plan.
Today's announcement puts UMA back front and center, although I have a hard time understanding why it's important to the company. It gives them a slight advantage in very narrow areas, especially for budget callers.
The general tech media is covering this as an innovation and something spectacular and new. It's the problem with short memories.
After more than a year of leaked news and trials, AT&T will ship its femtocell in April: We've heard about and seen pictures of the 3G MicroCell for quite a while. Like all femtocells, the idea is to connect mobile users voice and data calls in their homes or small offices to a broadband connection, improving quality and throughput without taxing AT&T's network. The benefit to customers is better coverage, fewer dropped calls, higher consistent data throughput, and, optionally, unlimited calling.
For carriers, every call or bit of data that they don't have to pass over their expensive, congested mobile networks saves them real money in preventing customer defection and deferred capital expense, while increasing subscriber revenues.
The AT&T 3G Microcell is unique in working only with 3G; Verizon and Sprint's options are 2G only, which allow them to offload voice but not data. For smartphones that have Wi-Fi built in, that's not such a big deal for any of those three carriers, but for customers without Wi-Fi (there still are some) or phones that can use 3G mobile broadband only, AT&T has a much bigger win.
AT&T, like Sprint and T-Mobile (which uses Wi-Fi with the UMA standard), will also offer an unlimited calling plan for domestic US calls placed and received when in range of the 3G MicroCell. AT&T will charge $20/mo for either individual or family plans. That's steep for an individual: AT&T's general mobile plans are $40 for a 450-minute plan, $60 for 900 minutes, and $70 for unlimited calling anywhere. For families, it's a far better deal.
T-Mobile's UMA unlimited calling service is $10 per month (individual or family), and Sprint's Airave is $10/mo/account or $20/mo for a family plan.
The 3G MicroCell will cost $150, with a $100 mail-in rebate if you purchase monthly unlimited service at the same time, and another $50 rebate for those who sign up for AT&T fixed broadband services (DSL or fiber). Sprint charges $100 for its femtocell and a $10/mo fee, while T-Mobile's router is about $50. (T-Mobile seems to have removed pricing information from its site, so I can't confirm at this moment.)
Verizon has no calling plan, but sells its Wireless Network Extender for $250, with no recurring fees. It's meant to improve signal coverage only, which still seems strange to me. I suppose those who want Verizon service and can't get a good signal at home have an option with this device, as opposed to changing carriers.
Phone numbers need to be registered with the 3G MicroCell to be used. AT&T says the 3G MicroCell will be available in mid-April.
While T-Mobile's UMA offering has been around for years, Cablevision may be trying something new: Cablevision's COO mentioned in the company's earnings call today that the firm is testing phones that will switch seamlessly between cellular and Wi-Fi networks. That sounds an awful lot like UMA (unlicensed mobile access), a standard used for roaming by T-Mobile in the US and several carriers around the world.
T-Mobile offers UMA because it lets them leverage other companies' broadband and its network of home and roaming Wi-Fi networks. T-Mobile operates relatively few hotspots now compared to when it was anchored by Starbucks, but the key to UMA is voice over Wi-Fi over a wired or wireless broadband connection at home.
Cablevision has an even easier time of it, because it provides its CT/NY/NJ Wi-Fi network only to users that subscribe to its home cable broadband service. So any phone it offers can carry voice over Wi-Fi at home over its cable network and outdoors over its Wi-Fi network. In the past, Cablevision has partnered with Sprint for wireless service. However, I'm unaware of any production UMA gear that would work on Sprint's network.
The notion of UMA is to reduce the cost to a carrier of subscribers while providing subscribers with more unrestricted minutes. T-Mobile's plans, for instance, offer unlimited domestic calling over Wi-Fi even for plans with modest numbers of cellular minutes. This keeps customers loyal and happy with a lower cost structure. Femtocells have the potential to offer similar advantages to T-Mobile's competitors, but none are being priced or marketed in that way yet.
MagicJack says it can provide GSM femtocells in the home without agreements with AT&T and T-Mobile: This is one of the most audacious and fascinating attempts to work around spectrum rules that I've seen since Vivato convinced the FCC to tweak the point-to-point power limit rules for phased-array devices.
MagicJack currently offers a VoIP service using a tiny plug-in device that costs $40, including a year's unlimited calls, and $20 for subsequent years. MagicJack pulls off this trick by being affiliated with a CLEC (competitive local exchange carrier), which allows it to benefit from call completion fees (paid by other carriers whose customers call MagicJack customers) and integration.
The femtocell MagicJack is altogether different. Using very low power, the femtocell will act as a GSM base station, and phones will connect to it to complete calls over a broadband Internet connection in the same way that the wireline adapter works.
The snag is that MagicJack doesn't have agreements with any US GSM providers, such as AT&T and T-Mobile, the two largest. Instead, it's asserting a couple of different doctrines of non-interference and, Kevin Werbach suggests, the constitutional right to be free from unreasonable searches and seizures.
MagicJack believes that by only using the femtocell in a home, and not interfering with carriers' outdoor networks, that there's no conflict with the FCC licenses that carriers have paid for. I first thought this was ridiculous, but now think there's a case to be made that could disrupt calling plans in the same way as T-Mobile's UMA handset service for unlimited domestic calls over Wi-Fi.
It's one thing for MagicJack to assert these rights, another to get FCC approval. IDG News Service reports that the FCC has no application yet and MagicJack confirms it hasn't submitted one. The FCC tests for certain kinds of rules compliance, and thus is unlikely to block device certification. However, carriers may file FCC complaints once the product is officially out to prevent its use and tie up the product for years under a restraining order or a similar mechanism.
It's a crazy idea, but also clever.
T-Mobile will stop selling new @Home calling service; handset calling unaffected: T-Mobile introduced unlicensed mobile access (UMA) calling in 2007, where a dual-mode handset can place and receive calls over either a cellular network or Wi-Fi, and seamlessly continue calls as a customer travels.
This service works in homes and offices, and at associated hotspots. The service now costs $10 per month for residential plans with 1 to 4 phones, including unlimited domestic calls.
In mid-2008, T-Mobile extended that with updated routers that could also replace home landlines, allowing plug-in replacement of regular wired phones for an additional $10 per month. This service will no longer be sold, but existing customers can continue using it indefinitely.
It's not entirely surprising that T-Mobile would drop the landline replacement component. With an increasing number of households relying on cellular phones and no landline, the uptake rate was probably fine but had no growth curve--it only applied to people who wanted to retain the semblance of fixed home phone jacks. It makes more sense to focus on the pure celluar/Wi-Fi option.
The ability to use VoIP over 3G and Wi-Fi turns iPhone into more powerful tool: AT&T, under pressure from the FCC to explain precisely why the iPhone can't place VoIP calls over 3G when its other smartphones can, reversed its previous policy. Apple will be updating its App Store rules to let developers run VoIP connections over any available network medium, not just Wi-Fi.
This change is a big one for AT&T, which I'm sure wrestled with lawyers, spreadsheets, and customer surveys before implementing the move--a move which could have been forced on the firm by the FCC.
And I think it's a good one for AT&T, despite the potential loss of revenue.
Why? Because it's yet another tool for customer loyalty to a company whose 3G network has delivered sub-par performance. I've been generally satisfied with AT&T's service, but I don't live in areas of weak coverage, and I don't travel extensively. (Two recent trips of hundreds of miles each across rural and highway portions of Oregon and Washington were generally satisfactory.)
In fact, AT&T turning on 850 MHz base stations in Seattle has distinctly improved my iPhone phone and data experience, especially in my house.
The move to allow VoIP over cell data means that iPhone customers can turn to Vonage Mobile, Skype, or other programs in new versions to make calls outside the U.S. at rates that aren't insanely high, and can downgrade subscription plans to have fewer minutes in the plans, relying more on VoIP for domestic calling.
But if you look at subscription trends already, this isn't as disruptive as it looks. I have no idea how many people pay AT&T's wireless international rates; perhaps billions are spent, but the costs are so high, I have to believe that most people are motivated to use calling cards or other solutions, which have included VoIP over Wi-Fi with Skype on the iPhone.
AT&T already offers rollover minutes, free evening and weekend calling, and free mobile-to-mobile calling as part of its cheapest postpaid plans. For most iPhone customers, AT&T gets a minimum of $75 per month ($40 voice, $30 data, $5 for the cheapest IM package); multi-line plans with two phones start at $120 ($40 voice, $10 extra line, $60 for two data plans, $10 for two IM plans).
For $100 per month, you can get unlimited voice from AT&T, so that's maybe the biggest competition for the firm: the $60 difference between a limited-minutes $40 plan and unlimited $100 plan.
However, never forget that the cost of customer churn and acquisition (and re-acquisition) is exceptionally high in the cellular industry, racking up hundreds of dollars per customer between advertising, subsidies for new phones, and company stores or commissions to independent stores.
If AT&T ups its iPhone customer retention rate by a measurable amount, the company likely saves more than the difference, and achieves better costs of scale, too.
Also remember that every minute someone uses a VoIP service over Wi-Fi is a minute that AT&T doesn't have to pay for (or pays very little for at its hotspots), and doesn't have to provide customer service for. Every minute of VoIP over 3G requires the firm carries roughly the same data traffic with none of the responsibility for call completion, billing, fee settlement, or customer support.
AT&T may actually benefit quite a bit from this change in policy, which may be why it didn't opt for prolonged legal action.
AT&T inches closer towards broad availability of its femtocell: Details of 3G MicroCell, an in-home base station for the AT&T network, have been floating around for months. What wasn't known was when the company was planning to expand its test program into commercial availability. With the launch of a detailed Web site describing all the advantages--but also with a Zip code availability checker--the company is moving far closer to release. (Update: Charlotte, N.C., is the first test market.)
The idea of a femtocell is to have a broadband-connected tiny base station in the home that allows an existing cellular handset to work without any modification. Sprint pairs its femtocell with an unlimited call options ($100 purchase price plus $5/mo for the base station's use and $10 additional/mo for unlimited calls). Verizon offers just the signal-strength improvements ($250). T-Mobile employs UMA, which requires one of many dual-mode UMA handsets that the company offers, but works over plain Wi-Fi.
The 3G MicroCell is unique in that Sprint and Verizon's systems support just 2G voice only. AT&T is a smartphone and calling adjunct, although most smartphones that the company sells include Wi-Fi, and thus the data side isn't very important to most home users. Better call quality and unlimited home calling are the big carrot.
Engadget has a price sheet which shows calling plans at $10/mo (for one or more cellular phones) for existing AT&T wireline customers, and $20/mo for everyone else. The base station is $150 if you want it just for coverage; $50 ($100 rebate) if you sign up for the service plan. (The pricing is apparently a test, too, however.)
That's relatively competitive to Sprint ($15/mo) and T-Mobile ($10/mo), and cheaper than Vonage or Comcast VoIP. Further with VoIP services, you pay per line available; with the AT&T option (as well as Sprint and Verizon) multiple cell phones can place calls at the same time, which gives you a form of multi-line service.
AT&T gets a huge benefit from femtocells, extending its market into homes where its cell service can't reach or reaches poorly, while offloading potentially large amounts of home calling from its network to broadband.
The WSJ writes of the low rate of adoption, interest in femtocells: I've long been a bear about femtocells, short-range indoor base stations designed to extend cellular networks to the home or small office, allowing the use of unmodified mobile handsets. Femtocells seem to be a way for carriers to bring their business into your home, instead of you gaining more control over your calling.
T-Mobile steered a different course years ago, signing on to the unlicensed mobile access (UMA) standard, which allows a handset to negotiate seamless during-a-call handoffs between a mobile network and a Wi-Fi network. T-Mobile had to introduce new handsets that include UMA software and Wi-Fi radios; the firm now has 10 such models which are priced like models without UMA.
Femtocells require no handset updates. A customer obtains the base station, plugs it into their broadband connection (just like UMA, the carrier doesn't pay for the call backhaul), and then unwinds up to 30 feet of GPS antenna. Femtocells have to have a precise location both to use the correct licensed frequencies for that area and to assist in meeting E911 call location requirements. (In fact, femtocells may help carriers meet those obligations well enough to offset worse performance elsewhere.)
But where T-Mobile paired UMA with a cheap, unmetered calling plan--now costing just $10 per month for 1 or more lines--Sprint's femtocell costs $100 and $5 per month plus a $10 per month fee for a single unmetered line. Verizon charges $250 with no monthly fee nor calling discounts. (AT&T's femtocell is still in testing in limited markets, and may have an unmetered plan associated.)
Further, T-Mobile counts all calls that originate on a Wi-Fi network under its unmetered plan, and allows you to use any qualified hotspot: any one for which you have access or a password, or that's part of its large aggregated HotSpot roaming footprint. If you receive a call or place a call over Wi-Fi, you can walk away onto the cell network and not have minutes apply. For Sprint, minutes are unmetered only when at the femtocell, and, as noted, Verizon doesn't engage in that at all.
Because T-Mobile relies on Wi-Fi for data, the speed that your handset can access the Internet is only limited by your broadband connection and the quality of the Wi-Fi network. Verizon and Sprint are shipping 2G-only femtocells, which means that handsets with 3G but no Wi-Fi would be severely cramped. AT&T will offer 3G service with its femtocell--but 3G drains a battery far faster than Wi-Fi does on a mobile device. You'll need to keep your iPhone or other phone plugged in to use it effectively in your home as a landline replacement. (AT&T's devices should be able to switch to Wi-Fi for data while making 3G calls, however.)
The cost of femtocells, where we're now a good year into real worldwide availability, is still far too high relative both to their utility and substantial deployment. Yes, that can drop via volume, but Om Malik points out that with only 20m femtocells predicted to be sold worldwide in 2012 (and 800K worldwide this year), the amount of investment in femtocell makers is far outstripped by the potential for revenue. That's a recipe for consolidation and closure.
Femtocells benefit a carrier by allowing customers to get coverage where they cannot, and offloading cell tower usage to a device that the customer has paid for or leases. Some reports have suggested that carriers should give away femtocells because the reduction in infrastructure buildout through heavy in-home use would be far cheaper than the cost of the femtocells.
Honestly, given the costs, limitations, and complexity, I'd rather simply use Skype on my iPhone over my home Wi-Fi network rather than a femtocell.
Why should AT&T be excited about Skype for iPhone: Because all of us iPhone users are paying minimum fees for service that we will use less and less in favor of Skype. The free Skype for iPhone application, due out tomorrow, will only work over Wi-Fi. (PC World has a full report including screen captures.)
Skype has 400 million users worldwide, and the voice quality tends to be better than that of the conventional POTS (plain old telephone service) or cellular network when there's sufficient bandwidth. With a user base that large, with a mobile version of Skype you're more likely to make Skype-to-Skype calls (which are free).
AT&T enabled the Wi-Fi part of this equation by belatedly offering free Wi-Fi for iPhone users to any of the nearly 20,000 in-network hotspots the company operates. AT&T acquired Wayport, its managed services provider for Wi-Fi hotspots, last year. This puts McDonald's, Starbucks, a number of hotels, and some chains under one plan, all free to iPhone users. (iPhone users should download and use Easy Wi-Fi for AT&T iPhones, a currently free app from Devicescape for automating your hotspot login.)
Why does this benefit AT&T? Every minute that you use over Skype over Wi-Fi is a minute that AT&T doesn't have to pay cellular transit costs for. Sure, AT&T makes money from selling you outside-plan minutes at about 25 to 50 cents a minute. But savvy user now buy unlimited plans or have pools large enough or use prepaid plans. I believe the fees from the overage charges are trending into place. Which means that AT&T would prefer you use less minutes, loading its network less.
Skype charges for calling to the public switched telephone network, a couple cents a minute to North America and many other countries or fixed monthly plans, but the margins are very thin there.
Let's say a billion minutes are siphoned from AT&T cell calls using the iPhone and now are made over Skype. Skype relies on peer-to-peer infrastructure for the most part (with some central authentication) for its Skype-to-Skype calling, so that's no skin off its nose. For AT&T, that's a billion minutes it doesn't have to carry with a commensurate drop in termination fees, carrying costs, and infrastructure buildout. Further, this encourage more use over Wi-Fi instead of over 3G, freeing 3G service by having people seek out Wi-Fi hotspots.
If you're like my wife and I, we already have the cheapest possible plan from AT&T: a family plan with two lines, the lowest number of minutes, and two iPhones (first generation). This still costs us $130 per month including taxes and we haven't been able to drop any lower with our current offering.
If we start calling a bunch over Skype for iPhone, then we're still paying that same $130 to AT&T, and yet we're using it less and less. It's all about margins. Skype still requires that someone else operate the network and the broadband, so even while Skype sucks minutes from the telecom infrastructure, it's hard to see how AT&T loses in this case because of the high fixed cost of obtaining a minimum cellular data plan.
iPod touch reaches out: The mobile Skype application works on the iPod touch, too, bringing such users access to a high-quality worldwide network of existing users and cheap calling. This device needs an external mike or headset (there's no microphone built in), but Apple revealed recently that 13 million iPod touch models have been sold. That's a big audience.
iPod touch owners don't have automatic free Wi-Fi hotspot access, but that's easy to solve. Hotspot operators and aggregators already offer mobile pricing. Boingo Wireless, for instance, has an $8 per month plan for mobile devices for which the iPod touch already qualifies. Get Boingo's iPhone/iPod touch application and you get automatic login, too.
Femtocells arrive: Femtocells are cellular base stations the size of typical home broadband modems and gateways, one step below office-building picocells, designed to enhance a mobile carrier's network in interior spaces. I've been skeptical of femtocells for the several years in which they've been discussed as the Next Big Thing Next Year.
Apparently, 2009 is next year. Sprint introduced its Airave last year, Verizon just released its Network Extender, and AT&T slipped up and revealed plans for its 3G MicroCell, which is apparently 2 to 5 months away.
Femtocells vary from VoIP over Wi-Fi (whether via T-Mobile's HotSpot@Home or Skype over Wi-Fi using a USB headset) in that they use licensed frequencies for the area in which the femtocell operates. There's no chance of collision with other users, which makes voice calls for all three operators and data calls for AT&T (the only one of the three to support 3G data) consistent.
Sprint and Verizon's base stations allow up to 3 simultaneous voice calls. AT&T allows up to 4 simultaneous 3G voice calls or data connections. Sprint and Verizon's femtocells work with all existing 2G-compatible handsets, which is pretty much everything; AT&T is restricting its femtocell to 3G for a lot of sensible reasons.
I've written extensively about femtocell announcements and some of the carriers' strategy over in my general tech reporting gig at Ars Technica, but let me run down how this fits into the wireless data world.
Startup VoIP provider DeFi makes big claims, but delivers worldwide calling from a smartphone for $40 or $50 per month: DeFi has a very stripped down business model designed to appeal to a specific, but large class of traveler. They make software that's currently available for Nokia S60 phones (E and N series), and later this year for the iPhone, that acts as a kind of VoIP shunt for calling behavior. When you place a call, the software determines whether you're on a Wi-Fi network, and routes the call out that way; if not, it goes to cell. It also routes inbound calls, and can ring your cell phone's number if you're not on a Wi-Fi network and your inbound DeFi number gets a call.
For $40 or $50 per month (1 or 3 inbound phone numbers, respectively, in any of about 30 countries), you get 3,000 minutes (they call it "unlimited") of calling to and from 75 countries. This includes cell lines in Europe, typically a huge extra for most VoIP plans. DeFi said they signed deals directly with carriers, which they say most VoIP providers have not.
Wi-Fi access works at what they say is "1 million" hotspots, but is really Fon plus several tens of thousands of typical hotel, café, and airport venues. Wi-Fi fees are included for VoIP and data in the monthly subscription. DeFi uses Devicescape behind the scenes to handle no-entry authentication to their Wi-Fi footprint.
The integration is the key point DeFi makes about their product, and may be a stumbling block for an iPhone application. The head of DeFi told me that the company wants their service to require no behavioral changes for customers. Of course, users still have to make sure when they're in areas in which a cell call would be expensive that they don't accidentally wander away from a Wi-Fi hotspot. And Apple doesn't currently allow the kind of integration that would be required for call handling and interception, although DeFi said it's having no problems in its development work.
Think-tank wonders whether banning in-flight VoIP constitutes a violation of FCC rules about blocking services: The Progress and Freedom Foundation's Barbara Espin uses the ban on in-flight VoIP by American Airlines (facilitated by provider Aircell) to make a broader argument about what she calls the FCC's "ad hoc approach to broadband network management issues." It's clever. American discloses that calling isn't allowed, and VoIP isn't even technically within the FAA or FCC's purview, as far as I can determine. The FAA could choose to regulate it as a safety issue. PFF generally tilts anti-regulation, and has as what it calls its "supporters" a broad area of multiple system cable operators and telecom firms, including Comcast, which was singled out and fined by the FCC for its undisclosed network disruption of P2P connections.
Espin references Joe Sharkey's excellent column on in-flight calling in Sunday's New York Times: Sharkey, a veteran travel writer, who survived a mid-air collision over the Brazilian Amazon a few years ago, looks at varying attitudes about calls made during flights. He quotes Aircell's Jack Blumenstein saying what I've telling folks for months: Aircell has a lot of techniques to block VoIP calls already, and "as we identify new ways that people are trying to do voice calls on the airplane, we just kind of zero in and knock those off." Many geeks have assumed Aircell is a bunch of unsavvy folks who wouldn't be able to figure out how to disrupt their clever workarounds for making VoIP. (I keep noting that introducing jitter for suspicious data connections wouldn't disrupt legitimate applications, but would destroy VoIP call quality.)
While driving by the Fremont Troll, I explain the new flat-rate paradigm of carriers, driven by competition from Wi-Fi, Skype, and other factors
T-Mobile rolls out its latest HotSpot@Home offering, Talk Forever Home Service, in Seattle and Dallas: The service, launching in those two markets on 21-Feb-2008, uses a new Linksys router that has two integral RJ11 phone jacks, and accepts SIM cell authentication modules for each line. T-Mobile can port your home numbers to the built-in lines, which also have 911 location information encoded based on your address.
The fee is just $10 per line per month for unlimited domestic calls--you can choose one or two lines--and includes all the features found on cell phones, such as Caller ID, 3-way conferencing, call forwarding, and others. The router costs $49 with a two-year commitment, and the service requires a broadband connection. (This router was spotted on the FCC's site in August 2007, so this isn't much of a surprise; it's all in the timing.)
This new service works alongside the existing HotSpot@Home offering, which allows converged Wi-Fi and cell calling using one of four handset/smartphone models that T-Mobile offers. Pricing was recently lowered for this service to $10 per month for unlimited domestic calling on up to 4 cell phones, making it an easier win for family plans. You can choose either or both the mobile or landline-replacmenent services, but the newer router is required for landline calling.
T-Mobile will still suffer from the same ills that befall standard VoIP (voice over IP) systems like Vonage, because they can't guarantee the transit of data reliably between their supplied router over the customer's broadband connection to their voice gateway. But unlike Vonage, they control a lot of network components, and are less beholden to third parties. And as part of Deutsche Telekom, they're in a better position to complain and see it through if they're discriminated against by competitors.
Both HotSpot@Home and Talk Forever Home require a minimum $40 per month voice calling plan. That means if you sign up for both the mobile and fixed plans, you spend a total of $60 for unlimited home calling on a single line; unlimited weekend and evening calling; either 300 minutes with a MyFaves package (unlimited calls to 5 other domestic numbers of any type) or 1,000 minutes with a current standard individual plan promotion; and unlimited mobile calls originating on Wi-Fi, whether at home or in hotspots. (T-Mobile has a 5-year deal in place with AT&T to cover Starbucks locations as AT&T takes over operations this year of the coffeeshop's Wi-Fi.)
Joe Sims, T-Mobile's broadband products vice president and general manager, said in an interview that they were looking to "address the remaining reasons people were reluctant to cut the cord" and ditch their home wireline service. They found that 50 percent of those signing up for HotSpot@Home are new customers to T-Mobile, and were happy with the service's general uptake, but wanted to remove the last stumbling block to bring landline customers (of other telecoms) over to the service. One in 8 households have cell-only service, Sims said.
Sims noted that this is the "very first T-Mobile product with a dial tone." He also said that the company would have a total of 10 handset models by the time school starts this fall, up from 4 models currently. The World Mobile Congress last week in Barcelona saw the introduction and demonstration of piles of dual-mode cell/Wi-Fi phones, some of which include UMA (unlicensed mobile access), which is the specific technology T-Mobile deployed.
The home line service rolled out to Dallas and Seattle--my home town--can't handle fax machines or alarm systems yet, which is an important proviso. Electronic fax services like Maxemail can more cheaply replace a dedicated fax line, however, and newer alarm systems can be fitted with cellular calling. If you cut your monthly landline bill by $40 per month or more with this service and your long-distance bill by $20 to $40 per month, you might have the money to shift over to the alarm system.
Sims also commented on the Starbucks deal, noting it was critical to T-Mobile that "our customer experience didn't change." I asked if T-Mobile, now having consummated a real roaming relationship--it had some roaming deals for airports and international networks before--might consider other partners, given that their HotSpot@Home service would benefit from a greater number of locations for placing calls. He said, "Going forward, we are looking at other roaming partners. It's less about the footprint and more about the service."
I need to introduce a new concept into Wi-Fi access: not backhaul, but backside utility: That is, how useful is a Wi-Fi location if you can't sit down comfortably and without risk of expulsion? (An alternative construction might be an "assiness index," but that's too offensive for regular use.)
My essential problem with Fon is that there's no good way to determine how many of what they describe as nearly 200,000 Fonero locations are really hotspots rather than an antenna sticking out of a house or some inconvenient location. To me, a hotspot is a spot with high backside utility. If I can't sit down, potentially get electrical usage, but at least sling my bag somewhere, I can't work productively for long.
Making a phone call requires little backside utility. You can stand and walk around the pavement to make a call, often in inclement weather, as long as ambient noise isn't too high. But at 11 pm in a residential neighborhood, you're unlikely to make that phone call--or the police might be called.
In speaking recently to the BusinessWeek editor who wrote up the Fon/BT deal, I tried to explain how I debate Fon's count of 200,000 locations as comparable to 200,000 hotspots, because Fon doesn't have airports, convention centers, downtown hotzones, parks, or metro-scale networks. All of those vary among their backside utility, the captive-user potential, and the public-access-without-harassment possibility. But they're all large. Access across 1m sq ft of an airport isn't comparable to a sliver of use on a street in Barcelona outside someone's apartment.
Thus I was remiss in my discussion of the BT deal in mentioning that Fon could be a key improvement in BT's converged calling (unlicensed mobile access or UMA) service called Fusion. BT spun off its cell side, so in order to make Fusion work, they need as many minutes spent at home or at OpenZone hotspots to keep from burning up GSM minutes. If a good hunk of BT's wired DSL customers flip the Fon switch, then there is, in fact, a high probability that a Fusion user would see a dramatic improvement in how few minutes were fried via GSM. This reduces BT's cost and improves a Fusion subscriber's monthly bill, too, if they would otherwise have gone over their minutes' pool. They would likely see better coverage in areas with poor cell service, too.
So while I want to emphasize that backside utility and public use without harassment are two factors in how you might say whether a location is a hotspot or just lukewarm, applications are a critical component. If I need to look up a fact on my smartphone, and I can use Wi-Fi to do so via a Fonero's network, that's very high utility and I don't need to sit down or linger. If I want to spend 60 minutes reading email on a laptop, I need a seat.
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.
T-Mobile expands HotSpot@Home, a Wi-Fi plus cell system, to the whole U.S.: The company first offered their version of unlicensed mobile access (UMA) system in Washington state last fall. The ongoing commercial trial was apparently a success, and the company pulled the trigger Wednesday morning, June 27. T-Mobile has updated the pricing, handsets, and routers from their Washington trial, although basic service still starts at $20 per month for unlimited domestic U.S. calls originating on Wi-Fi.
UMA service treats trusted Wi-Fi networks as just more GSM cell transceivers. This requires new handsets that have both Wi-Fi and GSM radios, and which can operate both radios simultaneously to allow a seamless handoff between GSM and Wi-Fi (in either direction), just as cell networks hand off between two transceivers. "This is GSM over Wi-Fi," said T-Mobile spokesperson Tom Harlin.
The advantage of UMA is typically twofold: it infills areas that have poor coverage, such as inside buildings and homes, by using Wi-Fi as it's intended to work, covering interior spaces; and it's cheaper to carry service over Wi-Fi and consequently the Internet than it is to shuttle voice calls over a cell network.
T-Mobile's plan offers unlimited domestic U.S. calling for $20 per month for a single line or $30 per month for two or more lines. A minimum $40-per-month voice plan is required for a single line; $50 for a family plan. You can also choose to make Wi-Fi calls out of a cell minutes pool at no additional monthly charge, which might make sense when you're looking for better coverage rather than cheaper minutes. An introductory lifetime offer through mid-September offers unlimited individual plan calling for $10 per month and two or more lines for $20 per month; that price remains for as long as a customer keeps the service.
Calls that originate on a Wi-Fi network are unmetered even when you roam onto the cell network. "Any call that originates on Wi-Fi, the whole duration of that call is free and doesn't use cell phone minutes," said Britt Wehrman, director of product development. Conversely, calls originating on the cell network tick away your minutes even if you wander onto Wi-Fi.
The Wall Street Journal reports that T-Mobile will extend its converged cellular/Wi-Fi calling plan and hardware nationally: The plan, called HotSpot@Home, has been available in Washington State since October. The Journal calls that "Seattle" and "a few months," a dramatic understatement of how long T-Mobile has taken to shake the bugs out of this service. I was starting to wonder whether T-Mobile would ever launch nationally. The launch could happen in mid-June.
The converged plan uses a handset with both GSM and Wi-Fi radios built in, allowing seamless roaming among preferred personal hotspots (home, for instance), the T-Mobile HotSpot network in the US, and the GSM network.
When I tried it and wrote it up for The New York Times last fall, the roaming part of the operation--from cell to Wi-Fi and Wi-Fi to cell--wasn't up to snuff, but I like the Nokia phone I tried and Wi-Fi-based calls sounded great. The Journal says those problems have been ironed out through handset improvements, which I believe. The technology would seem to me to involve a lot of tweaking, rather than overcoming insurmountable odds.
The article notes that the $20 additional monthly fee for unlimited Wi-Fi calling, and $5 per month for subsequent phones in family plans, could be tweaked for the national rollout. In the Washington trial, you can also pay nothing and use normal minute plans to make Wi-Fi calls if you're after improved call quality in your home instead of more minutes.
An intriguing option I hadn't heard would be to extend the plan, allowing a landline connection in the home to use the same system, although it hasn't been set for launch. This is extremely simple to do because it involves no roaming and probably very little hardware--an additional plug on the routers that T-Mobile offers to customers with this plan. The router is free ($50 minus a $50 rebate), and supports WMM Power Save for improved battery life and WMM for voice prioritization over the Wi-Fi network.
The reporter hasn't done his homework, because he says that three European carriers are "launching" Wi-Fi phones: BT launched back in January, and seen 40,000 subscribers by early April, according to Light Reading. BT's plan includes their OpenZone hotspots, home service, and GSM as well. France Telecom's Unik converged service has done far better, with 100,000 subscribers, due in part to the telecom's success with a bundled broadband offering that has put 3.5m gateways into homes. These gateways are optimized for calling over Wi-Fi; BT and T-Mobile need to get gateways into homes, which is a higher bar to gain customers.
EarthLink will test a custom Accton voice over IP (VoIP) over Wi-Fi phone on their metro-scale networks, starting in Anaheim: The service and handset are free during a testing period, and includes only domestic calling in this period. The phone's charging cradle is also an 802.11g gateway. Anaheim customers can contact the company to sign up for testing; Anaheim is one of EarthLink's earlier large-scale deployments.
The phone and cradle/gateway are expected to cost $100 at launch. Unlimited domestic inbound and outbound calling will likely be $25 per month, and 500 outbound/unlimited inbound domestic calls would run $15 per month.
The service and phone don't require a subscription to EarthLink's metro-scale network, as it will work with any broadband network. Of course, if you want wide-area roaming, their networks are the obvious choice as a provider.