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The New York Times

July 5, 2007
IPhone-Free Cellphone News
By DAVID POGUE

Man, oh man. How'd you like to have been a PR person making a 
cellphone announcement last week, just as the iPhone storm struck? 
You'd have had all the impact of a gnat in a hurricane.

But hard to believe though it may be, T-Mobile did make an 
announcement last week. And even harder to believe, its new product 
may be as game-changing as Apple's.

It's called T-Mobile HotSpot @Home, and it's absolutely ingenious. It 
could save you hundreds or thousands of dollars a year, and yet 
enrich T-Mobile at the same time. In the cellphone world, win-win 
plays like that are extremely rare.

Here's the basic idea. If you're willing to pay $10 a month on top of 
a regular T-Mobile voice plan, you get a special cellphone. When 
you're out and about, it works like any other phone; calls eat up 
your monthly minutes as usual.

But when it's in a Wi-Fi wireless Internet hot spot, this phone 
offers a huge bargain: all your calls are free. You use it and dial 
it the same as always - you still get call hold, caller ID, three-way 
calling and all the other features - but now your voice is carried by 
the Internet rather than the cellular airwaves.

These phones hand off your calls from Wi-Fi network to cell network 
seamlessly and automatically, without a single crackle or pop to 
punctuate the switch. As you walk out of a hot spot, fewer and fewer 
Wi-Fi signal bars appear on the screen, until - blink! - the T-Mobile 
network bars replace them. (The handoff as you move in the opposite 
direction, from the cell network into a hot spot, is also seamless, 
but takes slightly longer, about a minute.)

O.K., but how often are you in a Wi-Fi hot spot? With this plan, 
about 14 hours a day. T-Mobile gives you a wireless router 
(transmitter) for your house - also free, after a $50 rebate. Connect 
it to your high-speed Internet modem, and in about a minute, you've 
got a wireless home network. Your computer can use it to surf the Web 
wirelessly - and now all of your home phone calls are free.

You know how people never seem to have good phone reception in their 
homes? How they have to huddle next to a window to make calls? That's 
all over now. The free router is like a little T-Mobile cell tower 
right in your house.

Truth is, the HotSpot @Home phones work with any Wi-Fi (802.11b/g) 
router, including one you may already have. But T-Mobile's routers, 
manufactured by D-Link and Linksys, have three advantages.

First, you turn on the router's encryption - to keep neighbors off 
your network - by pressing one button, rather than having to fool 
with passwords. Second, these routers give priority to calls, so that 
computer downloads won't degrade your call quality. Third, T-Mobile's 
routers greatly extend the phone's battery life. The routers say, in 
gadgetese, "I'm here for you, any time," just once, rather than 
requiring the phone to issue little Wi-Fi "Are you there?" pings 
every couple of minutes.

T-Mobile was already a price leader in the cellphone game. But the 
HotSpot @Home program can be extremely economical, in four ways.

SAVING NO. 1 It's not just your calls at home that are free; you may 
also get free calls at your office, friends' houses, library, coffee 
shops and so on - wherever Wi-Fi is available. You can access both 
unprotected and password-protected Wi-Fi networks (you just enter the 
password on the phone's keypad).

The phone has a built-in Search for Networks feature. Once you select 
a wireless network, the phone memorizes it. The next time you're in 
that hot spot, you're connected silently and automatically.

There's one big limitation to all this freeness: these phones can't 
get onto any hot spot that require you to log in on a Web page (to 
enter a credit card number, for example). Unfortunately, this 
restriction rules out most airports and many hotel rooms.

There's one exception - or, rather, 8,500 of them: T-Mobile's 
archipelago of hot spots at Starbucks, Borders and other public 
places. In these places you encounter neither the fee nor the 
Web-page sign-in that you would encounter if you were using a laptop; 
the words "T-Mobile Hot Spot" simply appear at the top of your 
screen, and you can start making free calls.

The cool part is that, depending on how many calls you can make in 
hot spots, the Wi-Fi feature might permit you to choose a much less 
expensive calling plan. If you're a heavy talker, you might switch, 
for example, from T-Mobile's $100 plan (2,500 minutes) to its $40 
plan (1,000 minutes). Even factoring in the $10 HotSpot @Home fee, 
you'd still save $600 a year.

SAVING NO. 2 T-Mobile's billing system isn't smart enough to notice 
handoffs between Wi-Fi and cellular networks. So each call is billed 
according to where it begins. You can start a call at home, get in 
your car, drive away and talk for free until the battery's dead.

The opposite is also true, however; if you begin a call on T-Mobile's 
cell network and later enter a Wi-Fi hot spot, the call continues to 
eat up minutes. If HotSpot @Home catches on, therefore, the airwaves 
will reverberate with people coming home and saying, "Hey, can I call 
you right back?"

SAVING NO. 3 When you're in a hot spot, T-Mobile has no idea where 
you are in the world. You could be in Des Moines, Denmark or 
Djibouti. So this is a big one for travelers: When you're in a hot 
spot overseas, all calls to United States numbers are free.

SAVING NO. 4 T-Mobile's hope is that you'll cancel your home phone 
line altogether. You'll be all cellphone, all the time. And why not, 
since you'll now get great cell reception at home and have only one 
phone number and voicemail? Ka-ching: there's an additional $500 a 
year saved.

Have T-Mobile's accountants gone quietly mad? Why would they give 
away the farm like this?

Because T-Mobile benefits, too. Let's face it: T-Mobile's cellular 
network is not on par with, say, Verizon's. But improving its network 
means spending millions of dollars on new cell towers. It's far less 
expensive just to hand out free home routers.

Furthermore, every call you make via Wi-Fi is one less call clogging 
T-Mobile's cellular network, further reducing the company's need to 
spend on network upgrades.

In principle, then, HotSpot @Home is a revolutionary, rule-changing, 
everybody-wins concept. But before you go canceling lines and 
changing calling plans, consider a few small flaws.

At the moment, you have a choice of only two phones: the Nokia 6086 
and Samsung t409. Both of these are small basic flip phones (both $50 
after rebate and with two-year commitment). They sound terrific; over 
Wi-Fi, in fact, they produce the best-sounding cellphone calls you've 
ever made. But the screens are small and coarse, and the features 
limited. Fortunately, T-Mobile intends to bring the HotSpot @Home 
feature to many other phones in the coming months.

The Wi-Fi sucks power, too; these phones get 6.5 hours of talk time 
on the cell network, but only 4 hours over Wi-Fi.

Finally, T-Mobile eventually intends to price the service at $20 a 
month, or $30 for family plans. Only people who sign up during the 
introductory period (now through an unspecified end date) will be 
offered the $10 price, or $20 for families.

Even at the higher price, you could still come out ahead. With 
HotSpot @Home, T-Mobile has taken a tremendous step into the future. 
Most phone companies cower in fear when you mention voice calls over 
the Internet (Skype, Vonage and so on). After all, if the Internet 
makes the price approach zero, who will pay for phone service?

But T-Mobile has found a way to embrace and exploit this technology 
to everyone's benefit. The result is a smartly implemented, 
technologically polished, incredibly inexpensive way to make over 
your phone lifestyle.

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