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Going Cellular Feed

T-Mobile standing out from pack with WiFi

Posted by Joe P on March 18, 2008

I’ve long preached the virtues of including WiFi in cell phones. No, it won’t work everywhere, but when you’re in a hotspot, it’s a nice, cheap alternative to your expensive cell network. In fact, that’s the most likely reason why you’re not seeing a greater WiFi phone selection from AT&T, and none from Verizon. Both of those companies have a certain reliance on landline services, and to include WiFi into handsets is to see more and more people using VoIP services like Skype to place calls from their homes. T-Mobile, though, has no landline connection, so they’ve been using WiFi as a competitive measure. And it’s been working out for them just fine.

“Because they are the No. 4 company, they need to be more of an upstart and go out there with a different message because they are scrambling for market share, ” said Charles Golvin, an analyst at Forrester Research. “In today’s market, it’s much more about stealing from competitors than finding new customers in the first place.”

And that’s exactly what T-Mobile has done. While the other carriers are trying to sell more services, including landlines, T-Mobile is undercutting them with their $10 per month Hotspot @Home service. While the other carriers are touting unlimited plans, T-Mobile has done the same, only added unlimited text messaging to their package.

And that’s the overall goal, isn’t it? Not to slight T-Mobile’s long-time customers, but Hotspot was created in order to poach from other carriers. In America, our cellular market is pretty much to the saturation point. You’ll pick up new users, usually youngsters entering the market for the first time. But for the most part, they’re coming in on their family’s plan. So that brings you back to a poaching strategy.

Of course, Verizon is standing behind its decision to not go with WiFi-enabled handsets:

“Verizon Wireless stakes its name on the quality of the wireless experience customers have when they use any of the services offered over our network,” said spokeswoman Brenda Raney. “Currently, there are no standards that will allow Wi- Fi to work on our entire network to the level we consider acceptable.”

Yes, that might be part of the reason. However, a paragraph earlier in the article better explains the situation:

That is because Wi-Fi removes users from carriers’ networks, giving them less control and less ability to generate revenue. Wi-Fi calling may also drive customers to drop their fixed phone lines, which still generates a large amount of cash.

You might not see it in their overall numbers — they’re still under 30 million subscribers. But T-Mobile is a force to be reckoned with. Now, if only they’d improve their signal in the NYC/Metro area.

[CNN Money]