If you were having trouble streaming the Apple (NASDAQ:AAPL) keynote recently, you probably missed a little tidbit from Apple marketing executive Phil Schiller that the new iPhones will support Wi-Fi calling and voice-over LTE, or VoLTE. Even more exciting is that the phones will seamlessly hand off calls from Wi-Fi to VoLTE, too.
The next day, at another ever-more-frequent Uncarrier event, T-Mobile US (NASDAQ:TMUS) CEO John Legere announced that the company will support free Wi-Fi calling and hand off Wi-Fi calls to VoLTE. It's the only U.S. carrier supporting voice calls over Wi-Fi, although AT&T (NYSE:T) subsequently announced that it will support the feature next year.
T-Mobile's "Uncarrier" branding has revived the company, but it hasn't quite revived the carrier's network coverage. Its 3G and 4G networks have more and bigger holes in them than the corresponding networks on AT&T and Verizon. But regardless of carriers, most people have experienced dead spots -- sometimes in their home or office -- for which Wi-Fi calling is a simple solution.
So why has it taken this long for anyone to do anything about it?
This just in: Your carrier cares more about itself than it cares about you
The iPhone 6 isn't the first phone to support Wi-Fi calling, which is essentially what FaceTime has always been. In Legere's address, he noted that every smartphone the carrier sells will support Wi-Fi calling, so there are plenty of options. (Note that the iPhone 6 is the first to support the seamless handoff between Wi-Fi and VoLTE.)
There are some workarounds. Users can make calls using FaceTime or Skype over Wi-Fi, but there are a few disadvantages to those. Over-the-top applications require more processing power and often require the screen to stay on, both of which drain battery quickly.
The simple explanation for not supporting Wi-Fi calling is that your carrier is interested in making money. If you're going to make calls, you're going to make them on your carrier's network, and you're going to pay for it.
The way AT&T's CEO of mobility and enterprise, Ralph de la Vega, put it, "We don't have a burning desire or need for coverage." For some reason I thought AT&T is in the business of providing coverage anywhere people need it, so something is off about that statement.
Turns out AT&T is in the money-making business (like Heisenberg). That's why it will recommend a Samsung 63% of the time; Samsung pays better commissions but doesn't necessarily make better phones. That's why it doesn't offer Wi-Fi calling, either.
Playing catch-up has its advantages
T-Mobile was slow to roll out LTE, but when it did, it had the advantage of rolling out LTE-Advanced from the start. For the end user, that means T-Mobile's entire LTE footprint supports VoLTE and the ability to hand off calls from Wi-Fi to VoLTE and from VoLTE to legacy voice calling. AT&T, on the other hand, is forced to roll out VoLTE on a per-market basis.
But T-Mobile is playing catch-up in other areas as well. Most notably, it's still only the fourth largest U.S. carrier. But playing from behind allows a company to take more risks, which is exactly what T-Mobile is doing with each of its Uncarrier initiatives. The company continues to give things away to customers that other carriers charge for -- or at least did until T-Mobile didn't. It's causing a lot of disruption in the industry, and it's causing a rapid migration of customers to T-Mobile.
T-Mobile has added over 1 million net new subscribers in each of the past five quarters. Its churn rate has declined significantly since it started the Uncarrier initiative, declining from the mid-2% range to the mid-1% range. Now, T-Mobile is using the new iPhone feature to solve one of its biggest problems -- poor coverage, especially in buildings. It's also providing free Wi-Fi routers that prioritize voice calls. The result of Uncarrier 7 ought to show up in the churn rate.
Ready to pounce
While Wi-Fi calling and VoLTE aren't exactly features prospective customers pay attention to when making a purchasing decision, it's something they'll notice when they actually use the phone. Better coverage and clearer calls are the main purpose of buying a new cell phone (or they used to be). T-Mobile will deliver that with the new iPhone 6. The other carriers won't.
Signs point to this being the biggest iPhone launch yet. If T-Mobile can tout that it's the carrier that will help you get the most out of the iPhone 6's capabilities, it holds an advantage over the competition in capturing an outsized portion of high-value iPhone sales.
Adam Levy owns shares of Apple. The Motley Fool recommends and owns shares of Apple and Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.