T-Mobile Plans Dual Mode Cell/Wi-Fi Phones?

By Geoff Duncan September 8, 2006

When we hear about dual mode mobile phone service which bridges seamlessly across both traditional cellular and Wi-Fi Internet networks, the context is generally Europe. Now, reports are emerging that U.S. mobile operator T-Mobile plans to introduce dual-mode phone service in parts of the United States as early as this month, enabling users to use the same phone to place VoIP calls over their home Wi-Fi network or other Wi-Fi networks to which they can connect, as well as traditional cell phone service.

Although the service will likely roll out in phases, T-Mobile’s service is likely to enable traditional cell phone access over its GSM network, VoIP service via home-based Wi-Fi networks, and (possibly at launch, possibly later) VoIP access via T-Mobile Hotspots, the company’s network of nearly 8,000 Wi-Fi hotspots in airports, restaurants, and other publicly accessible locations.

Part of the reason dual mode service hasn’t emerged yet in the United States has to do with pricing models: most cell phone users subscribe to plans which give them more minutes per billing cycle than they normally use for a flat fee, so there’s little cost pressure for consumers to move off the traditional cell phone networks. However, for T-Mobile, whose cellular spectrum and network is comparatively small compared the three top mobile operators (Sprint-Nextel, Verizon, and Cingular) moving customers to VoIP based service not only frees up capacity on their existing cellular network for both more customers and high-bandwidth applications like mobile music and video, it also provides a way to offer services unavailable via standard cellular networks (such as Skype-like availability indicators, retrieving media and voicemail via the Internet, or managing services via the Web rather than phone, etc.). Plus, data services will likely have more bandwidth via Wi-Fi than via 3G cell networks.

Dual mode service is most likely to appeal to users who push the edges of their billing plans, such as heavy talkers who’ve also ditched their home landlines. If customers already have their own in-house Wi-Fi network, they could talk on their their phones at home without using any cellular minutes—and, given that in-home cell phone reception is often pretty spotty, some users will actually have better reliability and call quality via VoIP than traditional cell networks.

If T-Mobile launches the service and it gains traction with consumers, expect other operators to join in: Sprint is already in talks with major cable companies about utilizing their networks for VoIP service, and AT&T might be a good candidate for dual-mode service once its recent acquisition of BellSouth is completed.

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