Subscribe to BusinessWeek

Even if you happen to have had a cell phone with Wi-Fi wireless capability, it hasn't been very easy to use it for phone calls over a Wi-Fi Internet connection. Cell-phone service providers haven't been very helpful because they want you to use your plan minutes for every call. So you've had to download an application from another company such as Skype (EBAY) to take advantage of the free or at least very cheap calling rates so common now with voice-over-Internet-protocol technology over a wired broadband line. These calls have required a separate account with a distinct phone number or user identity. And if you started such a call on your home Wi-Fi network and wandered beyond that signal's range while talking, the connection dropped.



Over the past year, though, a few overseas mobile providers have introduced a technology that combines cellular and Wi-Fi, and now it's arrived in the U.S. with T-Mobile HotSpot @Home service. So does @Home solve all problems typical to dual-mode phones? Most of them, yes, albeit imperfectly.



Seamless Hand-Off, Rock-Bottom Pricing

The service lets you make Wi-Fi and cellular calls using a single phone number and without a separate Wi-Fi application. Even more impressively, when you start a call on either the cellular or Wi-Fi network, it can switch over to the other if the signal you're on grows weak. The hand-off between cellular and Wi-Fi was so seamless, I didn't notice when it happened.



I like the pricing of @Home, too. A traditional home landline costs about $40 a month. A cheaper alternative, VoIP service from the likes of SunRocket or Vonage (VG), can be had for $10 to $30 a month. But @Home, pegged as a home line replacement, is initially available for only $10 a month on top of a T-Mobile calling plan, or $20 a month extra for a family plan of up to five lines [those who sign up now will enjoy these rates indefinitely]. In mid-September, @Home prices will rise to $20 for a single line and $30 for family plans.



Wait, There's More

All calls are free when connected through your home Wi-Fi network, a free Wi-Fi network away from home, or any of T-Mobile's 8,000 hotspots in retail locations such as Starbucks (SBUX) [see BusinessWeek.com, 6/27/07, "T-Mobile's Triple Threat"].



And even better: If you initiate a call on a Wi-Fi network and it switches to the cell network as you gab your way to your next destination, that call remains completely free, too.



You'll need to lay out $50 for a wireless router that becomes free after a mail-in rebate. You'll also need to purchase one of two phones initially available for the service, a Nokia 6086 or a Samsung t409, both of which cost $50 with a two-year plan or $170 with no commitment.



Setup took only two minutes. I plugged the wireless D-Link router, designed to extend the phone's battery life, into my computer and existing router. Happily, this router features the new simplified Wi-Fi setup for security and pairing devices. During a call, the phone shows one icon at the top left corner of the screen when you're speaking over Wi-Fi, and another, a picture of a cell tower, when you're using cellular minutes. It was simple as that.



Some Drawbacks

Unfortunately, the service needs some ironing out. Say I walk into a Starbucks. If the cellular signal remains strong, it can take up to three minutes for my phone to switch to Wi-Fi and stop consuming my calling plan minutes. That's because, in an effort to save battery power, the phone sniffs around for Wi-Fi connections only every once in a while.



I also dislike the available handsets. While the Nokia (NOK) flip phone has nifty features such as an MP3 player and FM radio, the design's not great. Bulky and nearly an inch thick, it looks eerily like a phone I owned two years ago -- only this one's bigger.



The garden-variety cell phone doesn't even have Wi-Fi, but the Nokia and Samsung handsets' lack of a full Web browser is a frustrating limitation. It means you're stuck with T-Mobile's sparse Web content, whether it's through a cellular or Wi-Fi connection. I couldn't use the phone to surf the Web, check my e-mail, or shop online, as one usually likes to do with a Wi-Fi device.



The Verdict

T-Mobile USA says it will release @Home phones with full browsers in the coming months, so I'd wait for those to come out before signing up. But once they do come out, be prepared to pay extra for a wireless Internet plan: You'll certainly need one to go surfing on T-Mobile's cellular network, and the company won't say whether it'll allow you to use the Web free via Wi-Fi even if it's your home router or another free network. I'd be pretty ticked if they charged.



So would I run out and buy one now? I think I'll wait a bit, even if it means missing out on the introductory pricing.