T-Mobile to launch $10 VOIP service nationwide

T-Mobile will soon launch its $10 landline phone service across the U.S., the company planned to announce Wednesday.

Already available in Seattle and Dallas, the service will be offered to T-Mobile customers elsewhere starting July 2. The $10 monthly subscription includes unlimited local and long-distance calling as well as services including voicemail, call forwarding and call waiting.

The service has a few drawbacks but should appeal to certain people, including existing VoIP (Voice over Internet Protocol) users looking for a better deal, said Charles Golvin, an analyst with Forrester Research. "You can cut down on expenses because it beats Vonage by a significant amount," he said. Vonage currently has a $15 per month limited promotion, with its standard rate at $30 per month.

The offer is only available to existing T-Mobile customers who have mobile subscriptions costing $39.99 per month and up, and who have broadband in their homes. Users must also buy a router priced at $50 with a two-year contract, or $150 with a shorter contract. Users can keep their existing phone numbers and plug any phone into the router for the service, called T-Mobile@Home, which works like traditional home-phone service.

The back-end technology is similar to standard VoIP but not exactly the same. T-Mobile is using UMA (Unlicensed Mobile Access), which it has already deployed to support its HotSpot@Home offering.

UMA was designed so that mobile operators could use Wi-Fi to extend mobile coverage into the home. It sends calls over the Internet to the nearest node in a wireless network, and from there the call is transferred via the mobile operator's existing back-end network.

T-Mobile developed the landline service after launching HotSpot@Home, which requires users to have a special mobile phone that connects to the cellular network when they're outside and the Wi-Fi network at home. While some HotSpot@Home customers might decide to give up their home phones because of improved coverage in the house, the operator found that a certain segment of customer didn't want to for several specific reasons, said Britt Wehrman, director of product development for T-Mobile USA. T-Mobile@Home, which can be used in conjunction with HotSpot@Home, is designed to address that segment of the market.

One reason is that the form factor of a home phone can be better for long conversations than a mobile phone, he said. Another reason is that some families like to have a central phone number for the family. As an example, when Wehrman and his wife go out, they like to have a home phone number to call the babysitter on, he said.

While subscribers can use any existing home phone, T-Mobile is selling cordless phones with preprogrammed features, such as a dedicated button to call voicemail and another for T-Mobile customer service.

The phones T-Mobile is selling attempt to address one shortcoming of the service -- subscribers won't be able to use existing phone wall jacks throughout their house to plug in multiple phones. So if a user wants more than one phone in the home, they have to use so-called "satellite" phones, such as the ones T-Mobile is selling. Such packages include two or more phones: One plugs into the T-Mobile router, and the others include a base station and phone that connect cordlessly to the phone that is plugged into the router.

Another drawback is that users can't attach fax machines or home alarm systems to the T-Mobile home phone service, Golvin said.

While Golvin didn't expect that a significant number of people would switch to T-Mobile in order to get the new service, T-Mobile said that 45 percent of users of the service in Seattle and Dallas had switched from other mobile operators.

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