It’s the week of the iPhone and that means, for carrier AT&T, it is top billing and headlines galore. Likely lost amidst all the hype, likely below the radar, reports are that competitor T-Mobile is today rolling out a unique launch of its own.
As of today, T-Mobile will be the first major U.S. carrier to launch a national UMA (Unlicensed Mobile Access) service. UMA, though it sounds like just another acronym for buzz-word bingo, is a technology already widely used in Europe and worth noting. Bypassing technical detail, UMA is a wireless telephony technology that works over wireless (WiFi) Internet networks. That means in areas of weak signals a UMA equipped cell phone can act like a cordless wire-line phone using a local internet connection instead of a cellular tower. Distinct from other Internet telephony technologies like Voice-over-IP, UMA phones can hand-off between a wireless internet connection (on a private network or a public Hotspot) and a cellular connection depending on which signal is stronger; and they can do so almost seamlessly. (Dropped calls are reported to be no more likely do to the handoff, than they are in every day usage of cell phone network).
T-Mobile has been testing its UMA service in Seattle since October on specially equipped phones. Going national, use of the service will require, in addition to monthly charges (which may irritate some users who recognize they are paying to use their own bandwidth), an phone equipped with a WiFi chipset and the appropriate programming.
Initially, two phones are available. The Nokia 6086 and the Samsung t709. (When other US carriers eventually roll out similar services more cutting edge phones will be equipped with necessary programming and WiFi chipset to use them. It’s also unclear if independently purchased, unlocked WiFi equipped phones will work with the service). To benefit from the service, access to a WiFi network is also a prerequisite. For those not equipped at home, T-Mobile is subsidizing the transition with the offer of either of two routers for free after a mail-in rebate. Those using the T-Mobile provided wireless routers will be able to use WiFi encryption without entry requirements over their home broadband Internet connection. All of the features of the phones, including mobile entertainment services and functions, should work seamlessly regardless of which form of network connection is used.
For T-Mobile, in addition to bringing better signal quality options to some customers, implementing UMA will allow them to offload some of the cellular network traffic load on their near 8,000 U.S. WiFi hotspots. (T-Mobile operates Hotspots through Starbucks coffeeshops, Kinkos, Borders book stores as well as in several hotels and airports.) Doing so may provide T-Mobile, which buys bandwidth on AT&T and other carriers networks, some cost savings. Additionally, the UMA convergence technology may help T-mobile take some market share from traditional phone companies.
Economically, for customers, with T-mobile largely offering free nights and weekends for its cellular plans, the unlimited UMA access (promotionally priced at $10m for a single line but normally priced at $19.99-$29.99) will largely be an unnecessary expense and novelty except for those whose homes have poor service coverage. For those with bad home cellular connections, the UMA package may be a nice upgrade. For those considering keeping obe phone line and no home based (landline) service, the UMA package may also be interesting. (Statistically, T-Mobile representatives say 30 percent of cell phone calls are made from the home. The redundancy of phones lines in the household is something they see as a possible market opportunity.)
The main shortcoming of the new technology, besides limited phone options or added expense, is that use of WiFi will dramatically reduce the talk-time, or life-per-charge of the phones (more than cutting usage-time in half). It’s a fact of the technology that WiFi transmission requires more power than GSM phones use for cellular connections.
The T-mobile launch won’t likely get too much attention. It is, after all, iPhone week which given the hype is starting to feel like a national holiday. With UMA, the potential, like with a lot of things, is not realized in the initial offering but in the prospect of the added functionality and convenience that will come once the technology is more widely adopted and entrenched. T-Mobile is taking the first step toward that end. Other carriers will likely follow over the next couple years.