Yesterday T-Mobile became the first major mobile phone carrier in the United States to begin selling service that allows a single handset to communicate over both cellular networks and Wi-Fi hot spots.
The first phones, which are available to consumers in Seattle on a trial basis, link to T-Mobile’s cellular network outdoors and to Wi-Fi routers at homes, in offices and in other locations like airports and hotels. This lets customers avoid using some of their cellular minutes and increases coverage in places where signals are typically weak, like basements and rooms without windows.
To gain access to the service, called T-Mobile HotSpot @Home, customers must buy a phone that works on both networks. T-Mobile is selling a choice of two handsets that cost $49.99 for customers who sign up for a two-year rate plan for at least $39.99 a month. Subscribers are charged $19.99 a month in addition to their regular cellular plan fees.
Customers also need a wireless router, which is free with a rebate. The router is then connected to any available broadband line for home or office use. The phones connect not just to the wireless router, but also at any of 7,000 Wi-Fi hot spots that T-Mobile operates at Starbucks coffee shops, Hyatt Hotels and other public locations.
T-Mobile has set up a Web site, www.theonlyphoneyouneed.com, for customers who want to sign up for the service.
Since customers can make unlimited calls using their broadband connections, the service represents a threat to Vonage, SunRocket and other companies that offer phone plans over high-speed Internet connections. The service also gives T-Mobile a leg up in competing with Sprint and other cellular carriers that are trying to develop similar services.
The dual-use phone service may appeal most to younger consumers who do not have a traditional phone line and rely solely on cellular phones and broadband lines.
“For the below-30 age segment, it’s a no-brainer,” said Roger Entner, a wireless industry analyst at Ovum, a consulting firm. “This is also a threat for other wireless carriers because it fixes the problem of poor coverage inside homes.”
Though consumers conceivably will use fewer cellular minutes with these phones, Mr. Entner said T-Mobile still benefits because consumers have to buy some kind of rate plan. T-Mobile can also lower its costs because some phone traffic that would otherwise travel on its cellular network will move to a competitor’s broadband network.
T-Mobile may also avoid having to build as many base stations and antennas to reach inside homes and offices.
A company spokesman, Peter Dobrow, declined to say how long the trial in the Seattle area would continue, or on T-Mobile’s plans to introduce the service elsewhere.
Earlier this month, however, Robert Dotson, the chief executive of T-Mobile USA, said his company would develop services that would eliminate the need for traditional phones.
Sprint has been working with cable companies to come up with services that integrate its cellular network with the broadband and video services offered by cable companies.