T-Mobile Launches Voice Over WiFi Service

T-Mobile has finally launched its voice-over-WiFi service, selling the “T-Mobile HotSpot @Home plan” to customers in the Seattle area. Users need to get one of two WiFi-enabled handsets T-Mobile is selling, which cost as little as $50, and a wireless router (which T-Mobile will provide for free, after rebates) to connect to their home or office broadband connection. Then, for $20 per month, they can make unlimited calls from that location, as well as T-Mobile’s 7,000 WiFi hotspots located in Starbucks and other places. This service is interesting on two counts: first, it’s T-Mobile’s second recent attempt, following its MyFaves discount plan, to differentiate with new voice-based services. Second, it’s an attempt to drive up voice spending by adding a feature as mobile operators’ voice ARPU continues to drop. The common thinking seems to be that this service will go down well with young users who already have or are thinking of abandoning their landlines — but with the cost of traditional mobile calls falling steadily (as noted above), and most people already paying for many more minutes than they actually use, will they go for it? T-Mobile needs to reinforce the message that there are benefits other than cost to the service, with improved in-home coverage at the top of the list. Poor indoor reception continues to be a bugbear for US operators, and the ability to use WiFi to improve it could be a significant advantage for T-Mobile.

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