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T-Mobile And Apple Prepare For Wi-Fi Cell Phone Battle

While Apple and AT&T's Cingular Wireless ready pricing plans for the Wi-Fi-equipped iPhone, T-Mobile is raising the competitive stakes with a national launch of its Wi-Fi HotSpot @ Home service.
While Apple and AT&T's Cingular Wireless prepare to announce pricing plans for the Wi-Fi-equipped iPhone, T-Mobile is going to up the competitive stakes with a national launch of its Wi-Fi HotSpot @ Home service.

Personnel at AT&T stores said Thursday they're still waiting for pricing plans for the much-anticipated iPhone, which is scheduled to ship next month. T-Mobile's HotSpot @ Home service has been tested in the Seattle area for several months at $20 a month.

The Wall Street Journal reported Thursday that T-Mobile is planning a national launch of Wi-Fi-equipped mobile phones as early as mid-June. The network infrastructure of both AT&T and T-Mobile is based on the European-developed GSM standard, which is generally less robust than the CDMA2000 EV-DO Rev. A standard used by Verizon Wireless and Sprint.

However, Wi-Fi has broadband capabilities that could catapult the iPhone and T-Mobile handsets into the world of high-speed communications. Cell phone companies have hesitated to embrace Wi-Fi until recently because it could cut into revenue when it's used with VoIP.

"In the future, VoIP on Wi-Fi could tear at the whole underpinnings of the [wireless] industry," said Joe Nordgaard, managing director of wireless consultancy Spectral Advantage, in an interview. "This issue is only going to grow. Operators are going to have to develop strategies to deal with it."

While the two GSM-based firms -- AT&T and T-Mobile -- will compete at least partially over Wi-Fi, Verizon and Sprint have gone off in different directions. Verizon is centering its data future on EV-DO, the 3G infrastructure developed by Qualcomm. Sprint, which is in the process of deploying EV-DO, also is rolling out Wi-Fi and its more advanced wireless solution WiMax. Sprint also offers a handset -- Audiovox ppc6700 -- that has Wi-Fi capability.

The key will be pricing, as mobile phone providers slug it out over data services, Nordgaard said. So far, T-Mobile's $20-a-month fee for users in its Seattle trial -- similar to the charge for its Starbucks service -- is the only public pricing available to date. The Sprint Wi-Fi feature is free and pricing for the iPhone isn't yet available.

Other mobile phone providers have been inching into the Wi-Fi and VoIP market. Mobile VoIP provider WiFiMobile announced Thursday that its Version 751 software for making VoIP calls over Wi-Fi is available for Nokia N95 handsets. The software, WiFiMobile said, also operates over 3G networks.

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Sara Peters, Editor-in-Chief, InformationWeek / Network Computing
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John Edwards, Technology Journalist & Author
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