T-Mobile: Move Over, Vonage

Posted by: Olga Kharif on February 21, 2008

Today, T-Mobile USA introduced its first home phone line replacement service. For $10 a month, plus the price of a $50 router, T-Mobile’s existing wireless customers with high-speed Internet connections can make unlimited calls over the Web.

The new HotSpot@Home Talk Forever Home Phone plan is way cheaper than almost every other home phone service out there. Today, Vonage’s service costs $25 a month. Comcast charges $30 per residential phone line when it’s bought along with TV and Web access services. Not only could T-Mobile’s new plan deal a blow to Vonage, but also to cable companies and to telcos like AT&T and Verizon, currently charging about $40 a month for residential lines.

Sure, you need to have a T-Mobile wireless plan worth at least $40 a month to sign up. But that's way less than what most of us pay for mobile service already: Americans' wireless service bills average $55 a month.

Since this plan can save people between $15 and $30 a month on home phone service, I bet that quite a few Americans who aren't yet ready to drop their home lines altogether may switch to T-Mobile just because of this plan.

This pricing move could end up having a huge impact on the Web-calling industry and could kick off a new wave of price wars for home phone service.

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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