I have been a T-Mobile customer for several years, and while I have had issues with their customer service (like all phone companies, it’s trying) I have been happy with their phone service. As phone companies go, they are an innovative company, and have done a great job carving a niche out for themselves among the youth and small business markets. This week, I upgraded to their new Hotspot@Home product, and while the iPhone has been sucking all of the air out of the room in recent weeks, I concluded that this is a much more disruptive, and useful, service that other carriers will be wise to watch.
Hotspot@Home is a dual-mode cellular + VoIP over WiFi service that, for only $10/month extra, gives you unlimited domestic US calling. There is some fine print, as you need a 2 year contract, and need to commit to a $60 per month airtime plan or better, but that’s all pretty reasonable, since any useful cellular plan is going to cost about that much. I signed up for this plan, bundled with an inexpensive Nokia dual-mode handset. I left the store expecting to be disappointed, given my experience with VoIP over WiFi (generally “OK” but also a nightmare to configure).
T-Mobile recommends new users get a Hotspot@Home router, a specially configured Linksys WiFi router with presets to work well with the T-Mobile network, but does not require it. Hotspot@Home should work with most WiFi access points, including T-Mobile public hotspots. I tested it at my parents house, on an old Linksys router (at least four years old if I remember correctly, and definitely not designed for WiFi VoIP). I was expecting it to be a configuration nightmare. I had a few minor issues that required about a half hour of troubleshooting, but once that was out of the way, it worked flawlessly. I am not going to critique the setup process because most users will, and should, just take a free Hotspot@Home router with them. T-Mobile wisely anticipated that few users will know anything about settings like IPSec passthru, and are better off to use the T-Mobile device for an “out of the box” experience.
I am impressed that T-Mobile has made their system open. While they don’t encourage third-party hardware, because of the support costs, they allow it, and they don’t do anything to make it artificially hard to use. I think that was a very smart move on their part. It means that people who’ve invested in wifi, either at home or at their offices, can use Hotspot@Home in many environments. I’ll certainly be using it as my primary phone service.
What really impressed me is that the service allows a pretty seamless handoff from WiFi to cellular. It doesn’t seem to make a big distinction between a WiFi base station and a cell tower. While the handoff is not completely transparent (WiFi signals by definition are very short range, so you can walk out of range pretty quickly). In most cases, the handoff was preceded by a second or so of bad audio, but otherwise was pretty transparent to the other person. I didn’t think that was such a big deal, but I was impressed that it worked so well. Other phone features, call waiting, voice mail, etc, all worked the same way on WiFi as they did on cellular. Voice quality was also very good, and because wifi is for indoor use, solves one of their big issues, indoor cellular reception.
The first batch of handsets they offer with the plan are so-so, and nothing for gadget freaks to write home about, but that’s OK. T-Mobile is going after a mass market with this product, and is shipping low cost phones with basic features and good battery life. That too is a smart move because the smartphone market has single digit marketshare, while there is a huge population of people who want affordable, quality phone service that does not require a degree in computer science to use. People who get a basic handset plus the pre-configured router should have a pretty easy time of it. They’ll be coming out with more handsets soon, and I also hear they will be upgrading to 3G this fall as well.
I am generally pretty critical of phone companies, but T-Mobile has been slowly rolling out some useful and fairly priced services. My plan consists of the following:
* 1500 anytime cellular minutes for $60 plus change
* Unlimited nights and weekends
* Unlimited WiFi calls anytime of day for $10/month
* Unlimited wireless data plus wifi hotspot use for $30/month
* 1000 SMS messages per month for $10/month
It all adds up to about $110, plus taxes and fees, a little bit more than I’d like to spend, but considering how much I use the service, it’s really a pretty good deal at a bit over $3 per day. Once they bump the speeds up on their data plans and offer some Hotspot@Home phones that are a bit nicer than the entry level Nokia handset I got, I’ll be pretty well set. My only real gripe is their international long distance and roaming rates. They are still pretty userous, especially the roaming fees, but those too will come down in time.
There is a cautionary tale in all of this for many VoIP companies. T-Mobile has been around for a long time (especially if you count its corporate parent Deutsche Telecom). They have deep pockets, and they are investing in technologies like 3G and dual-mode for the long-haul. They can afford to wait for the mass market to catch up, and what some entrepreneurs deride as slow, dinosaur-like decision making can also be smart long-range planning, ala tortoise and the hare. I am particularly impressed with T-Mobile because, unlike their competitors, they did not get caught up in the mania surrounding mobile television, 3G for the sake of 3G, etc, and because they did not waste billions of dollars in these other areas, have been slowly focusing on improving their core products, primarily voice, combined with low-cost flat-rate data. I don’t have inside sources there, but it seems to me that they correctly guessed that most consumers simply want good phone service with a few extras.
It’s nice to see a company stick to its main line of business. They didn’t launch the iPhone, but I think the products they are investing in now will pay off in spades in 2008-2010. I am generally very reluctant to give a phone company a strong endorsement, but this is a case where I think it is well earned.