T-Mobile USA, Cinci Bell embrace Wi-Fi connection

Two U.S. carriers have unveiled converged Wi-Fi/cellular products that use Unlicensed Mobile Access technology and offer customers the chance to stretch their wireless minutes and improve in-home coverage by relying on Wi-Fi for voice calls.
Regional telco Cincinnati Bell was the first to come into the market with its CB Home Run product, offered within its service footprint in the greater Dayton and greater Cincinnati areas. T-Mobile USA Inc. recently entered the arena with the national launch of its HotSpot@Home service, which previously had been in a trial
phase in the Seattle market.
Both products require a Wi-Fi-capable handset (T-Mobile offers two, Cinci Bell has one) and a wireless router and high-speed Internet service. The service is charged depending on how the call begins: a call that is initiated via Wi-Fi and handed off to the cellular network is counted as part of the unlimited Wi-Fi calling, while a call that begins on the cellular network and is transferred to Wi-Fi continues to eat up wireless minutes.
The highly vaunted iPhone also makes use of both cellular and Wi-Fi connections, but does not offer handoffs between the two technologies.
“I think people will try the Wi-Fi on it and realize that without something that makes it seamless, it’s really just a novelty item,” said Steve Shaw, associate VP of marketing for Kineto Wireless, which supplies the software client that enables T-mobile USA’s UMA service.
UMA increasingly is being used by operators around the world. According to a recent research note from ABI Research, British Telecom’s UMA consumer service has more than 40,000 customers and France Telecom’s “Unique” service has sold more than 250,000 UMA handsets. ABI predicted that UMA will capture 65 million fixed-mobile convergence customers by 2012.
T-Mobile USA, as a wireless-only provider, is using its UMA product as a way to further encourage cord-cutting among its customer base as well as attract new subscribers. The carrier also is playing up the budget angle of the offer, befitting its play as the “budget” option among the national wireless carriers.
Joe Simms, VP of new businesses for T-Mobile USA, said that between 13% and 17% of the carrier’s customer base has already cut the cord, and the new product offers an opportunity for the rest of its subscribers to do so for an additional charge of $10 per month for a single line or $20 per month for a family plan of up to five lines.
In addition to existing customers, he added, “We found it really applies to anybody who has a landline who’s sick of paying $50 a month for a line they hardly use.”
Meanwhile, Cincinnati Bell is approaching the converged product as one that will help it sell multiple services-high-speed Internet as well as wireless-and improve customer stickiness as well as overall revenue per user, with the option offered as a $10 add-on to wireless plans of at least $40 per month.
“Our ultimate strategy is convergence: how do we own more of the customers’ needs and have the products and services to make those needs work better together, to be the answer to convergence,” said David McNaughton, senior VP and general manager of consumer markets for the operator. “It isn’t just the $10 price . but also the fact that we can get them to buy a second or third product and make their relationship with Cincinnati Bell that much stickier.”
T-Mobile USA is not offering the product to business customers; Cincinnati Bell does make the product available to small and medium-sized businesses.
Using Wi-Fi offers benefits to the customer in the form of improved in-home coverage and cost, but the technology also has benefits for the carriers, according to Shaw of Kineto Wireless. If carriers can move some of their traffic onto Wi-Fi, they have additional capacity for other customers on their cellular network.
That advantage was echoed by Ton Van Kampen, VP of marketing and business development, mobile and personal, for NXP Semiconductors, (formerly Philips Semiconductors), which provides the chips for the Samsung handset used by T-Mobile USA. He said that about one-third of the time, callers are at home, and therefore moving in-home traffic off the cellular network could allow operators to add more subscribers to their network.
In markets with significant penetration rates, Van Kampen said, “operators want to grow, but they cannot grow any more by signing up new customers. They have to do something else, so the focus shifts from signing up new customers to let the customer spend more”-and one way to do that is to encourage them to use their wireless device more often.
One of the biggest challenges with UMA is related to battery life for dual-mode devices, but Van Kampen and Shaw say those issues have largely been solved. T-Mobile USA’s specs for the two UMA phones promise standby time of up to four days for the Nokia device and eight days for the Samsung handset, with talk time for both devices rated at up to five hours. However, the number of devices is still slim, although Shaw said he expects from eight to 10 new UMA handset announcements in the next half-year, as operator interest increases.
Shaw said that UMA also holds promise beyond voice products, with customers able to rely on a “true broadband connection” through their handsets via Wi-Fi-opening up new possibilities for video streaming and calling and mobile television that would not burden the cellular network.