Save on your phone bill with a dual mode phone

T-MobileT-Mobile is rolling out a new service that will allow you to make free phone calls from a cell phone using your home WiFi network. While the technology is not new and some companies have been playing with it for a while this is so far the first attempt to offer such service nation-wide in the US. The trial is currently underway in Seatlle area but if successful I would expect T-Mobile to roll it out fast. What is the catch?

First, you cannot use just any phone. The phone has to support two standards, GSM (that is what T-Mobile is using for their cellular network) and 802.11 (your WiFi network at home). At this time T-Mobile is offering a choice of two handsets: Nokia 6136 and Samsung T709 for $49.99 with a two-year contract, or $99 with a one-year contract. T-Mobile is also offering a WiFi router for free with a mail-in rebate however any home WiFi router should do.

Second, you have to pay for the WiFi connectivity which is an additional $19.99 a month. T-Mobile right now charges $19.99 for unlimited access to the Internet via their cellular network and WiFi HotSpots (which I pay for my plan). I wish this was the same access charge that they are talking about. I would jump on the plan as soon as it is available in my home town.

One has to wonder why they want this kind of service at all. Here is how NYTimes explains it:

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.

The second reason I think is the competitors. If it is not T-Mobile then some other company will start offering the same or similar service. Wireless communications is a very tough business to be in right now.

I think it is a very smart and timely move on the part of T-Mobile. As it doesn’t only put them in the lead over existing cellular providers but also takes market share from Vonage, SunRocket and other companies that offer phone plans over high speed Internet connections.

If you are lucky to live around Seattle you can use this sign-up page that T-Mobile have set up specially for the early adopters. If you do sign up, please let me know how it works for you. :-)

Read more about this new offer from T-Mobile here and here.

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