NEW YORK T-Mobile USA, the No. 4 U.S. mobile service, said on Wednesday it was starting to offer customers a new service that uses short-range Wi-Fi networks to improve reception when needed.
The U.S. wireless unit of Deutsche Telekom AG said the service would improve indoor coverage by automatically swapping calls from the cellular network to run over Wi-Fi, a radio technology found in most laptop computers and an increasing number of cell phones.
Subscribers would pay an extra fee of up to $19.99 per line or $29.99 for five lines on top of regular monthly cellular bills for unlimited calls in a subscriber's home or the nearly 8,500 places T-Mobile runs Wi-Fi, like Starbucks coffee shops.
Mike Selman, T-Mobile USA's product marketing director, hopes the service appeals to people who want to ditch their landline home phone but are concerned about weak cellular coverage or costs.
"About 30 percent of wireless calls are made from within the home," Selman said.
Selman said the service would help T-Mobile USA compete better with its rivals. Two of them are owned by traditional wireline telephone companies: AT&T Inc. and Verizon Wireless, a venture of Verizon Communications and Vodafone Group Plc.
Sprint Nextel Corp.,the No. 3 U.S. wireless service, does not have a landline business but has forged a venture with cable operators to provide services similar to T-Mobile USA's latest offering.
Jupiter Research analyst Michael Gartenberg said the service made sense for consumers who want only one phone.
"At that point it becomes a very strong incentive to get rid of the landline," he said. "If you have to keep your landline in addition, unless you're planning on talking on your cell phone a lot, the extra $20 may not make sense."
T-Mobile USA's service will work with Samsung Electronics Co.'s t409 phone or the Nokia 6086, which the company will sell online or in its stores.
(Reporting by Sinead Carew)