The new service, called T-Mobile HotSpot @Home, is currently available only in Seattle.
, the service is the first of its kind in the U.S. It will likely be viewed as a test case by other operators also considering launching a similar service. Sprint Nextel, through its , is also looking into developing a similar service. And Cingular is testing a service in its labs.
The benefit of the T-Mobile service for consumers is that it allows them to conserve their cell phone minutes while they are within one of T-Mobile's hot spots or when they are within range of any other Wi-Fi hot spot that doesn't require authentication.
The phone automatically detects Wi-Fi hot spots and uses a technology called unlicensed mobile access, or UMA, to seamlessly switch calls to the Wi-Fi network from the cellular network. The hand-off is so smooth, that users don't even know they've been switched to a different network, said Peter Dobrow, a spokesman for the company.
Just like with VoIP (voice over Internet Protocol) services from companies like Vonage, T-Mobile callers will be able to talk as long as they like to anyone in the U.S. for a flat monthly fee while they are chatting over the Wi-Fi network.
Consumers can buy special voice over Wi-Fi enabled handsets and sign up for the service at retail store locations in the Seattle area. They can also sign up on T-Mobile's Web site at www.theonlyphoneyouneed.com.
T-Mobile is offering two handsets to be used with the service: the Nokia 6136 and the Samsung T709. Each phone costs $49.99 with a two-year contract or $99 with a one-year contract. While the service works with any standard Wi-Fi router, T-Mobile is offering a D-Link Wi-Fi router optimized for the service. The routers are free with a mail-in rebate.
To activate the service, consumers must have a "qualified" T-Mobile voice plan, which starts at $39.99. The Wi-Fi functionality costs an additional $19.99 a month.
T-Mobile has been testing the service since August in a controlled trial in Seattle with a few hundred users. The company would not say how long it expects the Seattle pilot program to last or what its plans are for expanding the service.
T-Mobile, owned by Deutsche Telekom in Germany, also recently bought $4.2 billion worth of spectrum licenses through the, which will double its capacity in the top 100 markets in the U.S. The company in the next few years using that spectrum to upgrade its 2.5G cellular network to 3G technology so that it can compete with the other three major U.S. carriers: Cingular Wireless, Sprint Nextel and Verizon Wireless.