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New operator promises cheap wireless service

Zer01 Mobile plans to use voice over IP technology to offer an unlimited voice and data wireless service for $70 a month without a contract.

In these tough economic times, everyone is looking for a good deal.

And Sascha Segan at PC Magazine seems to have found a darn good bargain if you're looking for a cheap wireless plan that offers unlimited data and voice calling. The service, which costs only $70 a month with no monthly contract, is offered by a new mobile virtual network operator, or MVNO, called Zer01 Mobile.

The company also offers unlimited international calling to 40 countries for an additional $10 a month.

Segan reports in his story posted on Thursday that the company is using a form of a roaming agreement with AT&T and T-Mobile to provide access to their cellular networks. But instead of using the 3G wireless network to carry voice and data traffic, Zer01 sends the voice and data traffic over its own IP backbone.

The company's CEO explained to Segan that instead of buying wholesale cellular minutes from AT&T and T-Mobile the way other MVNOs have done, it has bought its own IP backbone and only uses the carriers' networks to interconnect or roam. Carriers throughout the world, such as Verizon Wireless or Sprint Nextel, use these interconnection agreements to provide coverage to their customers when they are not in their own coverage area.

The devices on the Zer01 network get fixed IP addresses and they each open a separate VPN session to the company's servers when a call is placed, according to the article. By using interconnect agreements, Zer01 can keep costs low and get around the carriers' 5GB per month data caps, Segan points out.

The service uses a proprietary voice over IP application that today only works with Microsoft's Windows Mobile 6 phones. But the application will eventually work on other phones such as Google's Android devices, Research In Motion's BlackBerry, Symbian phones, and perhaps even jailbroken Apple iPhones.

Unlike other mobile VoIP services, the Zer01 service allows users to dial from the phone's keypad without launching a separate VoIP application.

The service isn't yet available to the public. But the company is expected to provide details about a launch date around the wireless industry's CTIA tradeshow in Las Vegas, which starts April 1, so stay tuned.

Zer01 is expected to sell three HTC phones for the service: the HTC Tilt, which was made for AT&T, the Touch Diamond, and the Touch 3G. But users will be able to bring their own unlocked GSM phones to the network.