T-Mobile is taking the gloves off in its battle against wireline voice carriers. They will take their T-Mobile@Home service nationwide on July 2nd. T-Mobile has been testing T-Mobile@Home in Dallas and Seattle and according to their press release, “…virtually all customers (97 percent) who had a traditional landline phone service reported dropping that service since adopting T-Mobile @Home.” T-Mobile@Home is a VoIP powered voice service that uses a customer’s home broadband connection for connectivity. It’s priced at $10/month, and provides unlimited local and long-distance calling as well as basic features including voicemail, call forwarding and call waiting. The service is only available to T-Mobile customers who have a wireless contract of $39.99/month or more and requires the purchase of a $50 modem. The service utilizes UMA technology, which is also used for their Hotspot@Home service.
T-Mobile@Home offers some interesting competitive implications. It remains to be seen how consumers will react, but it seems like a decent value add to say to a customer who is buying a wireless service contract, we’ll throw in home phone service for an extra $10/month. That’s a pretty compelling differentiating feature that other wireless carriers can’t match right now. Bring your own broadband VoIP players like Vonage and Packet8 also seem vulnerable in this T-Mobile scenario. If I’m an existing T-Mobile and Vonage customer right now, why wouldn’t I switch to T-Mobile? Last I checked, Vonage didn’t have a $10/month plan. At the end of the day this strategy is more about maintaining and growing their core wireless business, than trying to take market share from traditional wireline voice business. Wireless providers are “pulling as many rabbits out of a hat” as possible these days to maintain and hopefully grow their business. The wireless market in the U.S. is approaching saturation. Expect to see more interesting strategies like T-Mobile@Home, as wireless carriers try to meet expectations of stakeholders in a sure to slow wireless growth market. Early indications are encouraging for T-Mobile. They tell PC World that 45% of T-Mobile@Home users in the Seattle and Dallas trials switched from other mobile operators.
Out of all the VoIP competitors to notice, this one fears me the most. If all wireless carriers can add a VoIP option at a price point like this, why wouldn’t huge numbers of people take advantage of it. The trend already shows wireless substitution gaining. This is just a value add for wireless substitution – making it even more attractive to cut your wireline service.
at&t and verizon already sell bundles with wireless instead of a wireline phone. writing is on the wall…