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« Wi-Fi Still a Missing Piece of iPhone | Main | Hotel Broadband, Wi-Fi Builders Move into IPTV, Entertainment »

June 26, 2007

T-Mobile Takes Cell/Wi-Fi Calling National

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 timing of the launch, two days before Apple and AT&T push out the iPhone, is certainly intended to steal a little thunder. The iPhone's service plans carry tariffs similar to those for normal voice and data plans, and even though the iPhone includes Wi-Fi, there is zero provision for VoIP whether from Apple, AT&T, or a third party. It could be added later, certainly. T-Mobile is focused entirely on voice here; Apple, on a broad "digital life" experience that includes voice, Internet access, and media, with no network integration among the three.

The closest equivalent to T-Mobile's offering is the Skype plus Boingo package built into Belkin's Wi-Fi Phone. The $180 phone combines Skype's calling with an optional $8 per month Boingo Mobile plan. The Boingo plan includes unlimited voice calling on tens of thousands of its aggregated locations worldwide, and Skype charges varying rates for "real" phone calls, including a $30 per year unlimited U.S./Canada plan. But the Belkin phone requires Wi-Fi and a trusted network or participating hotspot. T-Mobile can also work anywhere there's a trace of cell access.

Some cell phones with Wi-Fi can optionally run third-party VoIP software, but this requires choosing whether to use cell or Wi-Fi to place a call, which eliminates seamless roaming; relies on the quality of an arbitrary Wi-Fi network connection and VoIP provider for call completion; and means doing business with presumably two firms.

T-Mobile's Wehrman said that in talking to customers, they found three factors that had to be there for a UMA offering to work: It had to work in the home, thus custom routers (see below); it had to be a feature of a regular-sized cell phone; and it had to be affordable--"I don't want to be hit with a bit overage bill at the end of the day," is what customers told T-Mobile. (That's what led me to Cingular-now-AT&T, with their rollover minute plan that evened out my erratic, and thus expensive use.)

T-Mobile needs UMA in a way that the other carriers do not: it lacks any landline or broadband wired presence in the U.S., and has yet to build out any third-generation (3G) cell offerings, having just purchased spectrum several months ago for that purpose. To compete against Sprint Nextel, which has partnered with the four largest cable systems operators, Verizon, and AT&T, T-Mobile needs something that allows its customers to use their phone service at home to replace a landline while achieving a comparable quality.

And T-Mobile has hotspots--8,500 of them in the U.S.--which they can use as mobility outposts for calling and Internet connectivity. (T-Mobile said roaming partners for airports and other locations aren't included, but their own airports--San Francisco and Los Angeles, among them--are part of the plan, as well as the airport lounges they operate at most U.S. terminals.)

It's easy for T-Mobile to price the service as an unlimited offering because estimates I received from the industry indicate that cell calls cost roughly a nickel a minute to carry, while calls over Wi-Fi networks are about a penny a minute. But that's over Wi-Fi networks that a carrier doesn't own where it needs to pay a third party.

In T-Mobile's case, they're not interested in having you connect to any old Wi-Fi network. Rather, because of the difficulty in ensuring good voice call quality, they'd prefer you use a router they supply at home where you're paying for your own broadband, and T-Mobile HotSpots across the U.S. when you're out of the house. Use of the hotspots with this plan is at no additional charge. This also allows them to conserve other costs since they're already paying all the overhead of the hotspots.

"We've tried to make sure the phone and system is optimized for the places you use it most, namely your home and hotspot situations," said Harlin. For home users, T-Mobile offers custom models of D-Link and Linksys routers for $50, but with a two-year contract, they rebate that $50 back to you for the price of a stamp.

The two routers have three special features: a "key" pairing button on front; Wireless Multimedia (WMM) for voice packet priority; and WMM Power Save for improving battery life. The key button works with a router on which you've enabled encryption. Press the button on the router, and then select the network from the phone, and they use a proprietary process--not yet Wi-Fi Protected Setup--to exchange the key securely. I tested both D-Link and Linksys routers and found it worked precisely as advertised. The WMM feature lets the phone and router tag and prioritize packets that contain voice data, making for crisper phone calls; ordinary data is pushed lower in the queue for network handling. WMM Power Save reduces chatter, allowing a phone to use substantially less power--as much as 25 to 40 percent less. The WMM features aren't unique to these routers, but they're not common to home routers in general yet. That's changing. These two routers can be remotely updated and diagnosed by T-Mobile tech support, too.

The new service comes with two spanking new handsets, too: the Nokia 6086 and Samsung t409, revisions of the two models offered last fall. (Washington state trial subscribers will be able to trade up.) Both phones now include Bluetooth and the MyFaves features that allows unlimited calls to five numbers, whether in T-Mobile's network or not. Both phones cost $50 with a two-year contract.

(The Bluetooth support is limited to hands-free and headset support, unfortunately. With the Samsung phone that I tested, I was at first stymied at how to transfer the near 300 KB photos I had taken using its quite good cameraphone. I tried pairing with a computer; no luck. I tried emailing and posting to a T-Mobile photo site; only downsampled images are sent or uploaded. T-Mobile answered my query noting that photos and other data can only be transferred via USB, using a cable that isn't supplied with the phone!)

Wehrman said that T-Mobile also had a unique way to support E911 calling with the phones. All 911 calls go over a GSM network, even if you're in range of a Wi-Fi network. However, if you're out of GSM range and at a T-Mobile HotSpot, the phone will call over Wi-Fi and transmits that hotspot's location by handing off the physical address associated with the MAC (media access controller) address of the router, which is registered by location in their system. Finally, they can pull a registered E911 location you provided when signing up. It's a unique solution, Wehrman said.

Phones that use UMA aren't Wi-Fi phones with fancy browsing features--at least not yet. There tends to be a split today between a limited portfolio of UMA handsets and a much wider array of cell phones that have Wi-Fi for browsing, syncing, or third-party applications, which can include VoIP software. The UMA market is only now growing, with major carriers in Italy (Telecom Italia), France (Orange), and the UK (BT) just ramping up this year. Expect UMA smartphones if the market grows to reach into the millions; those phones could then leverage Wi-Fi for either converged calling or full-on Internet service.

Both phones do include EDGE support for roughly 150 Kpbs maximum downstream access. The phones will use Wi-Fi for data transfer, too, when they're on a Wi-Fi network. WAP browsing is still crummy, but at least it's fast. Unlimited EDGE is an additional $20 per month.

A combo laptop Wi-Fi/cell phone EDGE plan is just $30 per month: $40 for voice, $20 for calling, and $30 for cell data and laptop Wi-Fi is $90 per month for a pretty powerful fixed and mobile combination.