Last year, Alan Masarek made news as he left Google to become Vonage’s new CEO.
Using Voice over Internet Protocol (VoIP), T-Mobile has just waged what could become one of the fiercest price wars between telephone companies in years. Starting July 2nd, T-Mobile customers will have access to unlimited domestic calling from their regular home phone for the extremely low price of only $10 per month. Customers will need to have high-speed Internet access to use the service though because VoIP converts calls into digital signals that travel over the Internet. Other carriers such as Vonage, Comcast, AT&T and Verizon offer the digital phone service with unlimited calling for about $25 per month. T-Mobiles offering brings a much cheaper comparable service for less than half the cost at time when the popularity of the service is at a high and word is quickly spreading about the quality and benefits of using VoIP. There are some requirements to using the new T-Mobile@Home service. It is limited to new and existing customers that spend at least $40 per month in wireless service and customers will have to commit to a 2-year agreement with the service. In addition, an Internet router (to connect your phones to the computer) is required to use the service at an additional one-time cost of $50 and a broadband connection for high-speed Internet will be required to make calls. The struggle T-Mobile will face, just as other traditional and VoIP service providers, is that more and more people are doing away with home phone service as a result of the 84% mobile phone penetration in the United States. Analysts believe the company has priced the service low enough to entice the 15% of disconnected consumers who might miss home phone service to come back at a much lower cost. T-Mobile is betting its new low-priced VoIP service will not only entice its current mobile customers to sign up, but that it will also take customers from its rivals like AT&T and Verizon.