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Larry Magid Reports On T-Mobile’s Hybrid WiFi-Cellular Phone

For the past several days I’ve been testing a very innovative new cell phone. It uses WiFi along with a regular GSM cellular network, it has a camera and you can use it to browse the web.

No. It’s not the Apple iPhone. It’s one of T-Mobile’s new “Hotspot at Home” phones that’s designed to make calls either through T-Mobile’s GSM cellular network or through the Internet from a wireless (WiFi) hotspot at your home, from work or at a public location such as a Starbucks coffee shop.

The Apple iPhone, which comes out on Friday, will also have WiFi access, but for data only. What makes these T-mobile phones unique is the ability to make calls over the Internet.

Because of the WiFi connection, the phones, which go on sale Wednesday, have two advantages over traditional cell phones.

One advantage is that you can use them in areas where there is spotty cellular coverage or no coverage at all, assuming you have wireless Internet access. The other advantage – depending which plan you get – is that when you’re using the Internet to make phone calls, you’re not burning up cell phone minutes.

Here’s how it works. When you’re out and about such as in the car or walking through a park, you can take and make calls on T-mobile’s regular cellular network.


Click here to hear Larry Magid’s podcast
on the new hybrid WiFi-cellular phones.


As with any cell phone call, the quality of the call depends on the strength of the signal. But when you’re near a WiFi hotspot, the phone automatically tries to make a connection to the Internet. If it succeeds, all of your calls are placed using Voice Over Internet Protocal (VOIP), similar to Skype, Vonage and other VOIP phone systems. But when using this phone, all calls must be made through T-mobile’s network. You can’t use the phone with Skype or any other VOIP service.

One market for this phone is people who want to cut the cord by using only a cell phone at home instead of relying on a wired “landline.”

A 2007 survey by the Centers for Disease Control and Prevention reported that 12.8% of American homes rely solely on a cell phone. When you consider people between 25 and 29, the percentage jumps to 29.1%. That number might be larger if it weren’t for the fact that 30% of cell phone users, according to T-mobile report that “poor reception at home is the biggest barrier to landline replacement.”

With this phone, people with WiFi at home can get great reception, regardless of the quality of their T-Mobile signal.

Another market for the phone could be college students and others who spend a great deal of time around WiFi hotspots. My son Will, who attends UCLA, has been itching for a WiFi phone. Like a lot of colleges, all of UCLA is covered by a WiFi hotspot. If he had this phone, he could use it from anywhere on campus without having to rack up cellular charges.

I tested the phone at home, at an independent local coffee shop with a free public WiFi network, and at a Starbucks which – like most Starbucks – offers a fee-based access to a T-Mobile’s WiFi hotspot. I also tested it from my car and while walking down the street to make sure it got good cellular coverage.

Usually when you want to use a T-Mobile hotspot at a Starbucks and other public locations, you have to pay for service and enter a user name and password to log on but T-Mobile is giving owners of this phone free access to its hotspot network for phone use only (you still have to pay to use your laptop at a Starbucks).

The phone also worked at the independent pubic WiFi hotspot and it worked on my home network once I entered my Wireless Encryption Protocol (WEP) security password from the phone’s keypad.

Callers call the same phone number regardless of whether you’re using the cell network or WiFi. In fact, it acts exactly the same way in either location. The only way you can tell is by looking at the screen. You’ll see the name of the network and the color of the bars that indicate reception strength will change colors depending on what type of network you’re in. T-Mobile is using UMA (Unlicensed Mobile Access) technology, which is a non-proprietary standard that is being adopted by other mobile carriers as well.

The most interesting aspect of the phone is the ability to seamlessly switch between cellular and WiFi as you move from one area to another. I tested the phone by making a call from a public WiFi network at a neighborhood coffee shop. While I was talking I walked away from the shop and as soon as I was out of range of the shop’s WiFi network the call was quietly transferred to the T-Mobile cellular network.

Then I walked into a Starbucks and, within a minute, the call was handed over to Starbuck’s WiFi network without any drop in call quality. I also tested the phone from home where it works great but when I walked out into the street the call was dropped.

At first I thought I might have encountered a bug but then I remembered that I don’t have very good T-mobile coverage in my neighborhood. In other words, the phone was performing exactly as advertised, giving me good coverage through my home network even though I have sketchy cell phone coverage at and near my house.

T-Mobile will be offering two basic plans for the service. On one plan, you will pay for all your incoming and outgoing calls at the same cell phone rate regardless of whether the call is made via the cellular network or WiFi.

There is no financial advantage to this plan but it does give consumers the ability to get service in areas with poor cellular coverage. With the other plan you pay (or use minutes) only for calls that are initiated via the cellular network.

If a call originates from a WiFi network it’s free of any charges or deductions from your minutes even if you leave home while on the phone and switch over to the cellular network during the call. Likewise if you start a call on the cellular network and continue it at home, you pay the cellular charge for the duration of that call.

To get unlimited WiFi minutes, you’ll need to sign up for the 1,000 minute, $39.99 a month plan for your regular cellular service plus an additional $19.99 for the WiFi service. WiFi family plans are $29.99 a month. There is a limited time introductory price of $9.99 a month for individuals and $19.99 for families.

When you add in the extra WiFi charge to the basic $39.99 cell phone cost, you have a pretty expensive plan. If the only reason you’re doing it is to get free minutes, you might be better off going with a company like MetroPCs, which offers unlimited calling plans.

If you plan to travel overseas, this phone could save you a lot of money. I didn’t have the chance to hop on a plane to try the phone from overseas but, in theory, it should work from virtually any WiFi network in the world.

Because T-Mobile uses GSM phones, you can make cell phone calls from Europe and most other parts of the world (GSM is the closest thing there is to a global mobile technology) but using an American GSM cell phone from overseas can cost $3.00 a minute or more in roaming charges.

However, if you were to use the phone from a WiFi hotspot overseas, the phone would treat all calls as if they were being made from the U.S., according to a T-Mobile spokesman, which means you should be able to get free incoming and outgoing calls. The spokesman said that use overseas is not “supported” but that he saw no reason why it wouldn’t work as long as it picks up a Wifi Internet connection.

I tested the phone with my regular Linksys wireless router that I’ve had for years. T-Mobile also offers its own versions of wireless routers from Linksys and D-Link that have a one-button security feature that enables you to pair the phone with the router by pressing a button on the router, saving you the trouble of using the phone’s keypad to enter a security key on encrypted networks.

T-Mobile says that its router provides for better (phone) battery life and is optimized to give voice priority over data for better call quality. Nonetheless, I didn’t notice any problems with voice quality using my regular router even when I was downloading files and talking on the phone at same time. The T-Mobile routers sell for $49.99 but the company is offering a rebate that makes them free.

The company offers two compatible phones: the Samsung t409 and the Nokia 6086 that I tested. Both are capable but unremarkable cell phone with cameras, BlueTooth connectivity, a music player, voice dialing and access to both WiFi and T-mobile’s Edge network for data.

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