T-Mobile Dials Up Wi-Fi

Its HotSpot @Home is easy to use, but the handsets aren't great

Staring in dismay at your monthly mobile-phone bill, you've probably thought about trying out one of the new wireless handsets that run on a cheap or free Wi-Fi network, of the sort that may already be in your home. Such phones have never been particularly user-friendly, but T-Mobile has come up with a fresh approach that's practical, and nearly effortless to use.

For $10 a month, on top of your regular plan, you can eliminate the problem of poor wireless coverage in your home and make unlimited calls without using voice-plan minutes. All it takes is a broadband connection, a Wi-Fi network, and one of two Wi-Fi-ready handsets.

For T-Mobile USA, the new T-Mobile HotSpot @Home service makes a virtue of necessity. The company has invested heavily in Wi-Fi and operates thousands of public hotspots in airports, hotels, and retailers such as Starbucks (SBUX) and Borders (BGP). But its voice network suffers from spotty coverage, and it is way behind rivals Verizon (VZ), Sprint Nextel (S), and AT&T (T) in building high-speed data networks for mobile phones.

How It Works

The problem with Wi-Fi in handsets has been the lack of any simple way to switch between the phone network and Wi-Fi. Taking advantage of Wi-Fi required connecting manually to a network and using voice over Internet protocol (VoIP) software that did not let you make or receive calls using your handset's regular phone number. No wonder Wi-Fi capabilities ended up being used almost exclusively for data.

Under T-Mobile's new approach, the Wi-Fi setup is completely automated. If you get either a Linksys or D-Link wireless router suppled by T-Mobile ($50, free after rebate) or any other router that complies with the Wi-Fi Protected Setup standard, the push of a button on the router automatically configures your handset for the network. After that, you will connect to the Wi-Fi network in your home—or to one outside—whenever your phone comes into range.

Equally important: Your phone behaves exactly as if it is on T-Mobile's regular wireless network, even though you are connected through Wi-Fi. Instead of a signal being sent to your handset from a tower, the call travels over the Web to your home network, which then generates a ring signal. If you happen to be on a call when you move in or out of Wi-Fi coverage, you switch networks without dropping the connection.

I found both handsets worked seamlessly at all the T-Mobile hotspots I tried. And they'll do so throughout the U.S., though not abroad. You can also connect to any other Wi-Fi network, such as one in the office, if you have a password—or if the network doesn't require one. You cannot, however, connect to public Wi-Fi networks that ask you to register on a Web page, even if they are otherwise free. And international calls are still subject to long-distance charges.

Not Enough Choice

The biggest flaw in HotSpot @Home is the poor choice of handsets that work with it. T-Mobile offers only two relatively low-end models, the Nokia (NOK) 6086 and the Samsung T409 (both $50 with an @Home subscription). There are lots of other Wi-Fi-ready handsets, including the HTC Dash and Wing smartphones already offered by T-Mobile, and an assortment of feature-rich Nokias sold in Europe, such as the E61 and N95, but they're not set up to work with HotSpot @Home. T-Mobile says it will offer additional handsets in coming months.

The technology that makes @Home work is a standard called Unlicensed Mobile Access. It would be a boon to Apple's (AAPL) new iPhone, but iPhone carrier AT&T hasn't implemented it. And it's not available with the network technology used by Verizon and Sprint. T-Mobile has long been viewed as a technological laggard in the U.S., but @Home shows it has some tricks up its sleeve.

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