Tuesday, July 10

T-Mobile announces seemless VOIP / cellular package

Of all the rotten times to launch an amazing new service.

On July 5th T-Mobile announced T-Mobile HotSpot @Home. In a word it is a cell phone that also does VOIP.

For only $10 extra a month you can make calls from the same phone both via cellular and VOIP potentially saving yourself thousands of dollars a year.

To put it another way, this service offers all the ubiquity of a cellular network with all the inexpensiveness of VOIP.

Re: IPhone-Free Cellphone News - New York Times

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.)

I say hurrary!

This first generation service may not be perfect but at the very least it shows that T-Mobile "get's it".

Cellular companies are no longer in the voice communications business... they're in the internet communications business.

This service is a huge step forward. For a cellular company to embrace VOIP to save their customers money and in so doing potentially make much more profit itself is unprecidented.

But this isn't the only way for a cellular company to utilize the internet to make more profit.

Many may also see a direct parrellel between this service and the potential offerings of the iPhone. The iPhone is after all among other things a device that already has all the hardware capabilities of T-mobiles new service. It is an "internet communicator" to quote Steve Jobs... yet it has no VOIP application on the phone.

I assure you hackers and many others are VERY hard at work trying to bring VOIP to the iPhone.

Personally my friend Adam (a non-blogger but brilliant guy non-the-less ;) thinks Apple is trying to use the iphone to leverage itself into the world of communications in exactly the same way it used the iPod and Pixar to leverage their Apple from simply computers into media. This final piece of the puzzle would of course give Apple the unprecidented power to sell and deliver digital media and services DIRECTLY with it's customers anywhere and anytime.

What's more with already ubiquitous WiFi and the potential for ubiquitous WiMax sometime in the next 2-10 years my friend thinks Apple is going to try and leverage the iphone into being a communications company by either buying out a current cellular company or slowly using their leverage to turn all important cellular services into a mere commodity regardless of whether the end use of their networks is voice, data, text messages or accessing ANY webservice.

This may sound like a long shot, but it is VERY similar to what apple is now doing with the iTunes Music Store in shaking up the music biz and turning major music labels product back into a simple 99 cent commodity.

Not only do I think my friend is right on all counts but I'll one up him.

Given DRM dies in a fast and firey death as it is extremely anti-competitive and a huge hindrence to fluid markets the commoditization of BOTH these markets (digital media AND cellular data) will bring TREMENDOUS innovation to both markets over time accellerating the pace of innovation and creating ironicly explosive growth and revenue for Apple's unwitting and often disagreeable partners.

In so commoditizing cellular services into merely data access providers much like internet service providers I think the cellular companies will find a cornicopia of growth like they've never seen before as millions of webservices innovators, so called web 2.0 companies, strive to deliver services over their networks.

As cellular networks stop trying to be the gatekeepers of cellular networks like Cable TV operators... offering extrmely limited services like 10 cent text messages and $2.99 ringtones and finaly offer full unprecidented access and integration with the internet like the iPhone and T-Mobile's new Hotspot @Home service... the tremendous innovation in web based services will add tremendous value to their network and with it exponetial usage and revenue increases.

The most basic lesson here for cellular network providers is this:

Better to make a penny a kilobyte then a buck a minute.

Cellular services only THINK they are in the voice communications business.

Soon they will wake up and realize they have it all wrong. While they were slumbering on their profits or trying to find more ways to nickle and dime their customers to death their industry changed.

Cellular network providers are no longer in the voice communications busines they're in the mobile internet access business.

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