T-Mobile's Home Phone Service Puts Vonage In Crosshairs (VG)

T-Mobile’s latest move: Rolling out its “@Home” Internet phone service across the country on July 2. The wireless company’s offer to its subscribers: If you buy a special $50 Internet router, you’ll be able to use your home Internet connection to make unlimited phone calls for $10 a month. T-Mobile had previously tested the service in Seattle and Dallas.

Sounds like a good deal? It is. Vonage (VG) charges $25 a month for unlimited calling. And the average home phone bill is $65 a month, according to a Scarborough Research report cited in T-Mobile’s release. The telco said 97% of its subscribers who tested @Home ended up cancelling their plain-vanilla phone service.

Most important: Will this encourage more people to sign up for T-Mobile’s mobile phone service? Maybe. It probably won’t be the first feature people look for, but it certainly can’t hurt. And while rivals AT&T (T) and Verizon (VZ) could probably roll out a duplicate service tomorrow, they still have millions of home phone customers left paying that $65 a month — so it’s probably in their best interest to stay on the sidelines for a few more years.

Most surprising: In theory, this should be very bad news for Vonage, whose customer base of 2.6 million is tiny next to T-Mobile’s 30 million. But shares are up 4.1% today to $1.79. Deutsche Telekom shares — parent of T-Mobile — are up 3.3% to $16.57.

See Also: T-Mobile Goes After Vonage, Cable, Phone Companies

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