T-Mobile brings cellphones home

T-Mobile USA is launching a new nationwide service today that it hopes will eliminate one of the remaining reasons for keeping a landline at home.

Called T-Mobile HotSpot @Home, the service allows subscribers to make mobile calls via the cellphone network or a Wi-Fi network, easily switching from one to the other without breaking off the connection. By allowing phones to use both networks, T-Mobile hopes to provide better coverage within buildings, which can be a problem. In addition, there would be no extra charge with certain voice plans for calls initiated via Wi-Fi.

"People expect it [their cellphone] to work everywhere — in buildings, at home, and in their backyard," said Joe Sims, T-Mobile USA's vice president of new business development. "And, if they use it at home all the time, they don't want a huge bill."

Sims said T-Mobile will be the first carrier in the U.S. to offer this technology.

To use the new service, which Bellevue-based T-Mobile USA has tested in the Seattle area for the past eight months, subscribers must get a new phone containing a Wi-Fi radio and special software. They would also need a wireless router hooked up to their home broadband connection. When making calls on the Wi-Fi network, users may choose to either use the minutes from their regular voice plan or pay $20 more a month to make unlimited Wi-Fi calls.

The service also works on most public Wi-Fi networks, including the 8,500 hotspots T-Mobile operates in locations such as Starbucks. The phone will automatically connect to those T-Mobile-branded hotspots. For other networks, the user must manually designate an available network.

The calls automatically switch to the network — Wi-Fi or cell — with the strongest signal. Where the call starts determines whether it will be a free call. For instance, if a call is made on the Wi-Fi network but the user moves to a cellular connection, the call would remain free for its entirety.

The T-Mobile service is targeting the growing number of people dropping their landlines in favor of mobile phones.

For T-Mobile, this trend is crucial because it and Sprint Nextel are the two nationwide wireless operators in the U.S. not affiliated with a landline company. Their independence makes it easier for them to capitalize on the trend without cannibalizing revenues of another division. Verizon Wireless and AT&T both have substantial landline divisions.

Sims said a handful of statistics show more people dropping their landlines. He said today one-third of the minutes used on the T-Mobile network are calls placed from people's homes, and that during the last three months of 2006, half of U.S. residents who moved didn't replace their landlines.

"We aren't trying to change customer behavior. We are launching a service into a market where the trend is already happening," Sims said. "It's a big launch for T-Mobile. It's a game changer among the companies, many of which still have a landline affiliation. T-Mobile doesn't have that."

In Seattle, 13.2 percent of the 1.29 million households have opted to drop their landlines, according to Telephia, a wireless research firm. Detroit, at 19 percent, was the No. 1 city for dropping landlines.

In another survey, research firm In-Stat found that nearly 20 percent of people who use wireless phones planned to drop landline phone service, especially among 18- to 24-year-olds.

Other technologies have been developed to solve the problem of poor indoor coverage. Redmond-based RadioFrame Networks and others, for instance, have built miniature cell sites that attach to a broadband connection.

But that technology, as well as placing calls via Wi-Fi, has been slow to reach the consumer.

With the miniature cell sites, called femtocells, the hangup has been that they can be expensive.

For the technology T-Mobile is using, there are several challenges. The cellphone, for one thing, requires a Wi-Fi radio and special software. That means consumers will have fewer choices when it comes to picking a phone. For now, T-Mobile is launching with just two models: the Nokia 6086 and the Samsung t409, both basic flip phones that are $50 with a two-year contract.

Also, because the phone is using both cellular and Wi-Fi radios, the battery will likely drain faster. T-Mobile says users can maximize battery life by using one of T-Mobile's special routers, available free with mail-in rebate. The routers have additional software that extends the battery life by at least 30 percent, gives priority to phone calls over Internet traffic to ensure good quality, and provides additional security, said Britt Wehrman, T-Mobile's director of product development.

Monica Paolini, an analyst who studies wireless broadband, was one of the early HotSpot @Home testers in the Seattle area. She was interested in the service because her Sammamish home has no cellphone coverage.

"I love it. It uses my Wi-Fi, and I have good coverage at home for the first time ever," she said.

Still, as an early user, she has dealt with battery-life issues and other glitches. Most of those problems have been eliminated, she said. Since the early days of the trial, T-Mobile has upgraded the handsets to the ones being sold today.

Seattle trial customers can upgrade to the new handsets at no charge by visiting a T-Mobile store.

Paolini said even though she is using the service, she will not drop her landline. If the electricity goes out, so does her Wi-Fi router and, therefore, her phone coverage.

Today's launch is fitting for T-Mobile given that it already manages thousands of hotspots nationwide and has more than 1.2 million hotspot subscribers using them.

"One of the things that's absolutely true," Sims said, "is that we understand Wi-Fi."

Tricia Duryee: 206-464-3283 or tduryee@seattletimes.com