DUAL-MODE D-DAY

Unlike Embarq, Cincinnati Bell operates its own wireless network. But because that network is not nationwide, the company faces stiff competition from companies, such as AT&T and Verizon, that offer nationwide plans. And that's not the only front where the carrier faces competitive pressure. David McNaughton, senior vice president of consumer markets for Cincinnati Bell, also pointed to local cable franchises, which are launching converged services with Sprint — although those offerings have yet to include dual-mode handsets.

“We're in a fight in a very competitive market,” McNaughton said. “If we can't figure out a way to win on product differentiation, then we certainly can't compete on scale or price. That's why we have to lead the market in the eyes of the consumer by providing the most innovative services.”

Cincinnati Bell has priced the Home Run service to encourage users to choose its own broadband service. Home Run sells for $10 a month to customers who also purchase DSL from the carrier, in comparison with $15 to $20 a month for those who use a different broadband carrier.

That pricing is quite similar to what T-Mobile charges for HotSpot@Home: $19.99 a month for a single line and $29.99 a month for up to five lines on a family plan. As with Embarq's offering, customers purchasing either Cincinnati Bell's or T-Mobile's residential services also must purchase wireless service from the same carrier.

Cincinnati Bell customers must use a Nokia 6086 dual-mode handset, which costs $64.99. T-Mobile customers may choose either that model or a Samsung t409; the company sells each handset for $49.99. Like Embarq, both carriers subsidize part of the cost of the handsets, which would normally carry a retail price of around $200.

Nokia developed special software for the Cincinnati Bell handset to enable it to automatically connect to public Wi-Fi hotspots operated by the carrier. To connect with a home Wi-Fi network, customers must do some simple programming on the handset.

“There is a menu structure on the phone,” said Lance Reid, director of new product development for Cincinnati Bell. The handset recognizes Wi-Fi networks in an area and prompts the user to enter a password, which the handset remembers from that point onward, he said.

T-Mobile's handsets run software from Kineto Wireless that is programmed in a similar manner to allow customers to use T-Mobile hotspots or a home Wi-Fi network. For those who don't already have a home Wi-Fi network, T-Mobile offers D-Link and Linksys routers that customers can receive for no charge after using a manufacturer's rebate.

Neither Cincinnati Bell nor T-Mobile has revealed take rates for their dual-mode offerings, but a Cincinnati Bell spokeswoman said that “activations have been going well.” And Steve Shaw, associate vice president for Kineto, said HotSpot@Home sales were exceeding expectations.