Newsletter
Google Left Banner
T-Mobile Ups the Ante
21 Feb, 2008
T-Mobile joined the wireless unlimited calling party this week, but is now upping the ante with landline calling as well. Their new Talk Forever service complements their recently launched Hotspot@Home service, and provides unlimited domestic calling for $10/month. The new service will only be available in Dallas and Seattle for now. Hotspot@Home routes cell phone calls over the customer’s home Wi-Fi network, removing the minutes associated with that call from their wireless bucket of minutes, for an extra $10/month. The new Talk Forever is essentially a pure play VoIP service, similar to Vonage, where customers utilize traditional landline phones. So T-Mobile customers can now use their wireless or landline phone and get unlimited domestic calling for $10/month each (or $20 total). T-Mobile customers must subscribe to a $40/month plan to qualify for Talk Forever or Hotspot@Home, meaning customers would have a minimum bill of $60/month if they subscribe to both services. They also need to buy a compatible home router for $49.
This T-Mobile development is a clear move to encourage customers to give up traditional landline telephone service. With a wireless and broadband subscription, customers will now have unlimited calling from their home, and only use wireless minutes outside the home. I suspect as both this new plan from T-Mobile, as well as the multiple unlimited wireless plans announced this week begin to take hold, a fair percentage of consumers will question whether they need a landline phone. As Joe Sims, T-Mobile’s broadband products vice president and general manager, said in an interview with Wi-Fi Net News, “[we’re looking] to address the remaining reasons people were reluctant to cut the cord.”
After all of the activity this week, you have to wonder whether these communications conglomerates have well defined strategies, or are they winging it to see what sticks. My guess is a little of both. Does anyone really know the long term impact of these new plans, and whether they will provide enough margins for these carriers to continue them? Or is this just a “land grab” to shake out competitors, and then the market adjusts with fewer players?
digg this story
googleReply
About Telecompetitor
Telecompetitor is a leading industry blog covering the telecom competitive landscape. We provide insight, analysis, and commentary on the issues and implications of the evolving telecom competitive landscape.
a publication of
- Comcast Brings Wideband to the Northwest
- Muni-Wireless Not Dead Yet
- Is Three Screen Convergence a Pipe Dream?
- Verizon Joins CDN Movement
- iPhone 3G Coming to WalMart
- Verizon Business Teams With Nortel for Managed Telepresence Service
- Verizon’s Turn for Smartphone Spotlight with BlackBerry Storm Launch
- Full Speed Ahead for Clearwire and WiMAX
Channel
Webinars/Events
Upcoming Webinars
Packet Optical Networks – Enabling Your Future
Dec 16, 2008
Upcoming Events
NTCA Wireless Symposium
Jan 7-9, 2009 - Austin, TX
Featured Article
Should Telephone Service be Free?
12 Oct, 2008
Comcast announced a new promotion last week that offers 12 months of free basic cable service for new customers who also sign up for an additional service. Customers who don’t want an additional service can get Comcast’s basic service of about 20 -30 channels for $10/month. The promotion is tied to the digital TV transition of February 2009 and entices potential customers to avoid the transition “hassle” by getting “free” cable service. “The simple fact is that basic cable is the easiest path through the digital transition and now consumers can get it for free,” said Derek Harrar, General Manager and Senior Vice President, Video Services for Comcast in a company statement. This move is similar to strategies pursued by other video service providers, who are hoping to leverage the digital TV transition for new subscriber additions.
But is this strategy a leading indicator for the future? Should basic core services like basic cable and basic telephone service be offered for free, used as a “carrot” to entice customers to buy “more important” services like broadband? Maybe a very basic phone service, with no LD, access to landline 911, and maybe outgoing service only (to avoid telemarketers) should be a free component of a bundled offering. Such a wireline service may appeal to a customer who previously cut the cord for wireless only, but also needs broadband. There is a growing portion of the population who find the value of traditional wireline phone service elsewhere – either through wireless or broadband/IP services. But, if they could get the security of landline 911, and an extra dial tone in their home as a free value add for subscribing to broadband (or video from a telco’s perspective), maybe a telco’s bundled offering may look more attractive than a comparable cable offering. I realize this idea is not appealing to the hundreds of ILECs who are a part of the current access/settlement system (in fact, it couldn’t work in the context of today’s regulatory structure), but I wonder whether it’s inevitable. In this possible future scenario, the current settlement system adapts to broadband as the underlying service, as opposed to voice.
This scenario cuts both ways. From a cable company’s perspective, a growing portion of the population is turning to the Internet as a source for their video content, and no longer see value in paying for a broad package of video as a part of a traditional subscription pay-TV service. But, if they could receive basic TV (which includes local broadcast affiliates) as a free value add for buying broadband, maybe the cable bundle is more attractive. In a true IP/broadband world, very basic phone and video service is relatively easy to deliver, and has little impact on bandwidth and network performance. Maybe the digital transition is opening the door to a future where free basic services are a regular component of a bundled offering. Thoughts?