Vonage watch out! T-Mobile Extends Cellphone Service to Home Phones

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T-Mobile USA has launched a wired phone service for $10 a month, plus taxes and fees, to its wireless subscribers in the Seattle and Dallas-Fort Worth areas. The service, called “Talk Forever Home Phone”, comes with unlimited local and domestic long distance calls. This is a VoIP service that runs over a broadband connection, and in that sense, it is similar to VoIP offerings from the likes of Vonage. Talk Forever Home Phone will likely be available nationally in a few months. It works via a special Wi-Fi wireless router that you must buy, with a two-year contract, for a $50 one-time fee . The router has two phone jacks to connect 2 standard corded or cordless phones.

The router can either replace or supplement your existing wireless router and connects to the T-Mobile cellphone network. No other hardware is required from T-Mobile (e.g. you can use your own cordless or corded phones with it).Talk Forever customers must be on a T-Mobile individual plan costing at least $39.99/monthor a family plan costing at least $49.99/month.Talk Forever Home Phone has some significant downsides. It doesn’t support faxes, home-security systems and other devices that rely on dial-up modems. Also, unlike in POTS phones, your home address is not automatically transmitted to 911 emergency centers – the customer has to manually supply that address to T-Mobile during signup (and then change it whenever the address changes). This issue exists with any residential VoIP service. Cord-cutters can transfer their landline phone number to this new service, but it cannot be shared with the T-Mobile cellphone number. Also, the cell phones addressbook doesn’t transfer to the home phone (after all, addressbooks are generally local to the cellular handset).

This is similar to T-Mobile’s HotSpot AtHome program, which allows subscribers to place calls over their broadband connection using special Wi-Fi-equipped cell phones. The difference is that HotSpot AtHome uses the cell phone, while this Talk Forever Home Phone works with any standards corded or cordless phone. In both cases, T-Mobile is trying to get more people to give up their traditional landlines, but the new plan allows them to keep the familiar home phones as well as the home number.

Again the biggest losers out here will be pure-play VoIP providers such as Vonage! Not that there’s a complete overlap, but T-Mobile is positioning itself to carve out a chunk of Vonage’s customer base. This is waaaay cheaper than Vonage (doesn’t have all the features of Vonage, though) and will provide a better value proposition for those looking for cheap home service AND a mobile solution (users will have one bill for both at home and on-the-go voice service). Plus T-Mobile can market this cheaper than Vonage can because it already has a bigger customer base.

No doubt that this will be another nail in Vonage’s coffin – Vonage will now have to work even harder to survive