Despite all the coverage that Apple’s new iPhone is getting, there is still innovation going on at other cellular providers. Last week, T-Mobile announced their new “HotSpot @Home” service. For an additional $10 a month, you can use your WiFi-equipped cellphone as a VoIP device. When you’re in range of a WiFi access point, the cellphone will use the Internet to make VoIP calls (instead of the cellular system) – and the minutes used here won’t count towards your monthly plan, giving you essentially unlimited usage time when you make calls this way. Your phone still retains all its original functionality, such as call hold and caller ID, so your phone isn’t crippled.

The best part, however, is the seamless integration. As you move out of range of a hotspot, the phone will automatically hand off to T-Mobile’s cellular network, in much the same way as hand off occurs between adjacent cellphone towers when you’re moving. This is not only beneficial, but a prime example of the convergence of wireless networks that many people believe is going to play a bigger and bigger role in the future. Kudos to T-Mobile for offering innovation in this area, instead of just a new phone with a lot of fancy features.

iPhone blowback

When the iPhone was announced, the hype was almost immediate. For the most part, it’s lived up to its expectations, but two issues identified before launch seem to have no resolution. Firstly, it can only be used with AT&T. Secondly, and perhaps more importantly, was the lack of an SDK for the iPhone. Many people lamented this decision, and wondered if Safari and web-apps would be able to replace the flexibility offered by a true SDK. Despite worries of data usage costs (for the eventual non-US users), there have already been a plethora of iPhone apps released.

The real reason, some say, for the lack of an SDK is perhaps Apple’s (and AT&T/Cingular’s) worry about a VoIP application being developed for the iPhone that has the potential to severely cut into their income. After all, phone calls over the Internet wouldn’t count as regular minutes. Additionally, AT&T is known to harbour fears of companies that “use their” pipes, especially when they’re offering services that could cut into their bottom line. The result of this is a stifling of innovation.

Convergence of networks

As I mentioned before, wireless convergence is a key component of next-generation networks. The idea of separate devices operating on separate wireless networks is really an archaic one, held in place partly by companies unwilling to compete in a world of open, convergence networks. Convergence is not only good for the end-user/customer, but also good for the companies that provide the service. Customers get the best of both worlds: Cheap calls while you’re localized, and you still have wide coverage when you’re not.

There is also a clear need for a service like this. Many people already use Skype to make cheap or free VoIP calls. There are even WiFi Skype Handsets available to use with the service. T-Mobile’s new service basically integrates that functionality with a cellphone, and thus has the potential to take over that market with a more useful device.

The benefits for companies are perhaps even greater. Take T-Mobile’s HotSpot @Home service as an example. Because the phone will use a WiFi network to make VoIP calls when one is available, this not only provides better coverage but also decreases the strain on T-Mobile’s own infrastructure. Since many people have WiFi at home and at work, there will be less users on T-Mobile’s cellular system, decreasing its load and increasing its ability to support more customers. True, T-Mobile still has to have infrastructure on their own end for translating VoIP calls to landlines and vice-versa, but the benefits of less cellular load clearly outweigh this.

Which leads me to question why they’re even charging an additional $10 a month for this service. Since it’s beneficial to them, shouldn’t they be offering this for free? Indeed, if more cellular providers started offering these kinds services, they would be a true force against Skype. They wouldn’t need to fear it, or try to inhibit other VoIP providers, if they themselves could come up with an improved solution like this. They need not charge more, since the increased usefulness will attract more customers, and thus increase their profits naturally. But, perhaps I’m just nitpicking here, since no other company offers a service like T-Mobile’s, and is a true example of using innovation to compete, instead of stifling it.

Let’s hope this sort of service comes to Canada. If it does, I might truly have no need for a traditional land line.