T-Mobile launches discount VoIP service with a few big downsides

Posted by Joe on June 30th, 2008

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At just $10 per month for unlimited nationwide calls, T-Mobile’s recently launched HotSpot@Home VoIP service seems like a great deal for most consumers on the surface. However, there are a handful of limitations and requirements that may cause potential subscribers, especially those that are not already using T-Mobile for their wireless service, to pass on the new service.

First, HotSpot@Home is only available to existing T-Mobile customers with qualifying wireless plans. In this case, qualifying means that you must be spending at least $40 per month on your wireless service. Existing T-Mobile subscribers who have opted for the lower priced cell phone service plans would need to upgrade in order to purchase VoIP service. Those consumers that are not existing T-Mobile subscribers would have to purchase a new T-Mobile wireless service in order to qualify.

Those T-Mobile subscribers that do qualify to purchase HotSpot@Home service will also have at least a two year service contract with the company. The multi-year commitment is a fairly common practices in the cell phone industry, so it is not necessarily surprising that T-Mobile would include a long term contract for new VoIP subscribers. However, these types of commitments are far less common with VoIP providers, many of which offer competitively priced month-to-month plans and even no risk free trials. We think the two year lock in period is what make HotSpot@Home far less competitive, even for existing T-Mobile subscribers, than it otherwise could be.

In all fairness, T-Mobile isn’t really trying to compete with more established VoIP providers, like Vonage, with the launch of HotSpot@Home. Their main target audience are existing T-Mobile subscribers that want to convenience of managing all of their calls, whether through their cell phone or home VoIP line, on a single bill. HotSpot@Home also has the added bonus of allowing subscribers to receive calls at either a home or mobile location from a single phone number.

HotSpot@Home may not be for you even if you are an existing T-Mobile subscriber. The additional contract commitment means getting locked into pricing for both your wireless and VoIP service. Since these are two very competitive markets with constantly decreasing price points and a better deal around every corner we would suggest no locking yourself in.

Most consumers would probably be better off considering a VoIP service like Vonage, which is a true land line replacement solution with very high call quality and advanced features only available on VoIP. You can learn more about Vonage or other VoIP providers by visiting our guide to VoIP service providers.

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