Correction: An earlier version of this story mischaracterized the state of the U.S. iPhone 3G's SIM card. It can be removed, but AT&T does not provide an unlock code so that another carrier's SIM card will work on the phone.
Truphone, which has an App Store application that enables iPhone and iPod Touch users to make cheap international phone calls via a Wi-Fi connection, now can be used by iPhone users to make cheap calls from anywhere.
Previously, Truphone,, worked only when users were within . But the latest iteration of the application will allow iPhone users to make cheaper-than-usual international calls additionally via their carrier's cellular voice networks.
This means that users won't be tied to the confines of a Wi-Fi hot spot. But users should be wary of how they use the application, so as not to incur unexpected costs from their carrier. U.S. customers, especially, should be cautious, because AT&T charges roaming fees when calls are made from AT&T phones outside the country.
Truphone works like several other VoIP services, such as, that allow calling to and from regular phones. In short, it uses the local carrier network to establish a phone call, but it routes the call internationally, using its own network of voice over Internet Protocol points of presence. And when the call is connected on the other end, it uses the local phone network to establish the connection.
By using local phone networks in combination with VoIP technology, Truphone is able to offer phone rates for as little as 6 cents per minute when dialing a landline in the United Kingdom, for example, and 30 cents per minute when calling a cell phone.
By contrast, U.S. iPhone users making regular calls via AT&T's network could be charged $1.49 per minute when calling a landline in the United Kingdom or $1.69 when calling a U.K. cell phone, according to AT&T's current rates. But subscribers also have the option of signing up for a special international calling plan that costs an additional $3.99 per month. It drops the per-minute costs down to 8 cents a minute for calls from the U.S. to landlines in the U.K. and to 28 cents a minute to cell phones in the U.K.
The Truphone application could also help frequent travelers save on making calls when they're abroad. But for AT&T subscribers, unless they are in a Wi-Fi hot spot, the Truphone application won't likely save them any money while they're traveling abroad.
The reason is that AT&T still charges a roaming rate for phones that connect to another operator's network. For example, AT&T customers traveling in the United Kingdom pay a standard roaming rate of $1.29 per minute to make calls while in the United Kingdom. With a $5.99-per-month World Traveler plan, that rate is knocked down to 99 cents per minute.
The new version of Truphone's software also allows users in Wi-Fi hot spots to make and receive free calls when connecting to other Truphone users in Wi-Fi hot spots. A presence feature will let users know which Truphone contacts are connected to Wi-Fi networks, so that they can be called for free.
In summary, Truphone is certainly a better option for AT&T iPhone users, if they make international phone calls from the U.S., and they don't want to pay the extra $3.99 a month for AT&T's special international rates. But the rates offered with the $3.99 plan are similar to those offered by Truphone.
And for AT&T subscribers traveling abroad, I'd suggest taking an old, unlocked GSM phone, and popping in a local SIM card for making phone calls while in another country. Most of the time, it will be a whole lot cheaper to use a local service than paying AT&T's standard roaming rates, or even signing up for a $5.99 monthly international roaming plan and still paying the per-minute charges.
While the SIM card on the iPhone can be removed, AT&T does not provide a code to unlock the phone. So unless users are able to hack the phone to unlock it, they won't be able to use a local SIM card to get service while abroad. But any other AT&T phone can be unlocked, simply by calling AT&T customer service and requesting the unlock code.