July 5, 2007 STATE OF THE ART IPhone-Free Cellphone News

By DAVID POGUE Man, oh man. How'd you like to have been a PR person making a cellphone announcement last week, just as the iPhone storm struck? You'd have had all the impact of a gnat in a hurricane.

But hard to believe though it may be, T-Mobile did make an announcement last week. And even harder to believe, its new product may be as game-changing as Apple's.

It's called T-Mobile HotSpot @Home, and it's absolutely ingenious. It could save you hundreds or thousands of dollars a year, and yet enrich T-Mobile at the same time. In the cellphone world, win-win plays like that are extremely rare.

Here's the basic idea. If you're willing to pay $10 a month on top of a regular T-Mobile voice plan, you get a special cellphone. When you're out and about, it works like any other phone; calls eat up your monthly minutes as usual.

But when it's in a Wi-Fi wireless Internet hot spot, this phone offers a huge bargain: all your calls are free. You use it and dial it the same as always - you still get call hold, caller ID, three-way calling and all the other features - but now your voice is carried by the Internet rather than the cellular airwaves.

These phones hand off your calls from Wi-Fi network to cell network seamlessly and automatically, without a single crackle or pop to punctuate the switch. As you walk out of a hot spot, fewer and fewer Wi-Fi signal bars appear on the screen, until - blink! - the T-Mobile network bars replace them. (The handoff as you move in the opposite direction, from the cell network into a hot spot, is also seamless, but takes slightly longer, about a minute.)

O.K., but how often are you in a Wi-Fi hot spot? With this plan, about 14 hours a day. T-Mobile gives you a wireless router (transmitter) for your house - also free, after a $50 rebate. Connect it to your high-speed Internet modem, and in about a minute, you've got a wireless home network. Your computer can use it to surf the Web wirelessly - and now all of your home phone calls are free.

You know how people never seem to have good phone reception in their homes? How they have to huddle next to a window to make calls? That's all over now. The free router is like a little T-Mobile cell tower right in your house.

Truth is, the HotSpot @Home phones work with any Wi-Fi (802.11b/g) router, including one you may already have. But T-Mobile's routers, manufactured by D-Link and Linksys, have three advantages.

First, you turn on the router's encryption - to keep neighbors off your network - by pressing one button, rather than having to fool with passwords. Second, these routers give priority to calls, so that computer downloads won't degrade your call quality. Third, T-Mobile's routers greatly extend the phone's battery life. The routers say, in gadgetese, "I'm here for you, any time," just once, rather than requiring the phone to issue little Wi-Fi "Are you there?" pings every couple of minutes.

T-Mobile was already a price leader in the cellphone game. But the HotSpot @Home program can be extremely economical, in four ways.

SAVING NO. 1 It's not just your calls at home that are free; you may also get free calls at your office, friends' houses, library, coffee shops and so on - wherever Wi-Fi is available. You can access both unprotected and password-protected Wi-Fi networks (you just enter the password on the phone's keypad).

The phone has a built-in Search for Networks feature. Once you select a wireless network, the phone memorizes it. The next time you're in that hot spot, you're connected silently and automatically.

There's one big limitation to all this freeness: these phones can't get onto any hot spot that require you to log in on a Web page (to enter a credit card number, for example). Unfortunately, this restriction rules out most airports and many hotel rooms.

There's one exception - or, rather, 8,500 of them: T-Mobile's archipelago of hot spots at Starbucks, Borders and other public places. In these places you encounter neither the fee nor the Web-page sign-in that you would encounter if you were using a laptop; the words "T-Mobile Hot Spot" simply appear at the top of your screen, and you can start making free calls.

The cool part is that, depending on how many calls you can make in hot spots, the Wi-Fi feature might permit you to choose a much less expensive calling plan. If you're a heavy talker, you might switch, for example, from T-Mobile's $100 plan (2,500 minutes) to its $40 plan (1,000 minutes). Even factoring in the $10 HotSpot @Home fee, you'd still save $600 a year.

SAVING NO. 2 T-Mobile's billing system isn't smart enough to notice handoffs between Wi-Fi and cellular networks. So each call is billed according to where it begins. You can start a call at home, get in your car, drive away and talk for free until the battery's dead.

The opposite is also true, however; if you begin a call on T-Mobile's cell network and later enter a Wi-Fi hot spot, the call continues to eat up minutes. If HotSpot @Home catches on, therefore, the airwaves will reverberate with people coming home and saying, "Hey, can I call you right back?"

SAVING NO. 3 When you're in a hot spot, T-Mobile has no idea where you are in the world. You could be in Des Moines, Denmark or Djibouti. So this is a big one for travelers: When you're in a hot spot overseas, all calls to United States numbers are free.

SAVING NO. 4 T-Mobile's hope is that you'll cancel your home phone line altogether. You'll be all cellphone, all the time. And why not, since you'll now get great cell reception at home and have only one phone number and voicemail? Ka-ching: there's an additional $500 a year saved.

Have T-Mobile's accountants gone quietly mad? Why would they give away the farm like this?

Because T-Mobile benefits, too. Let's face it: T-Mobile's cellular network is not on par with, say, Verizon's. But improving its network means spending millions of dollars on new cell towers. It's far less expensive just to hand out free home routers.

Furthermore, every call you make via Wi-Fi is one less call clogging T-Mobile's cellular network, further reducing the company's need to spend on network upgrades.

In principle, then, HotSpot @Home is a revolutionary, rule-changing, everybody-wins concept. But before you go canceling lines and changing calling plans, consider a few small flaws.

At the moment, you have a choice of only two phones: the Nokia 6086 and Samsung t409. Both of these are small basic flip phones (both $50 after rebate and with two-year commitment). They sound terrific; over Wi-Fi, in fact, they produce the best-sounding cellphone calls you've ever made. But the screens are small and coarse, and the features limited. Fortunately, T-Mobile intends to bring the HotSpot @Home feature to many other phones in the coming months.

The Wi-Fi sucks power, too; these phones get 6.5 hours of talk time on the cell network, but only 4 hours over Wi-Fi.

Finally, T-Mobile eventually intends to price the service at $20 a month, or $30 for family plans. Only people who sign up during the introductory period (now through an unspecified end date) will be offered the $10 price, or $20 for families.

Even at the higher price, you could still come out ahead. With HotSpot @Home, T-Mobile has taken a tremendous step into the future. Most phone companies cower in fear when you mention voice calls over the Internet (Skype, Vonage and so on). After all, if the Internet makes the price approach zero, who will pay for phone service?

But T-Mobile has found a way to embrace and exploit this technology to everyone's benefit. The result is a smartly implemented, technologically polished, incredibly inexpensive way to make over your phone lifestyle.

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Copyright 2007 The New York Times Company

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Went past one of their kiosks today, they actually had two different routers on display.