Brand New Cell Phone Carrier to Offer Unlimited 3G Data and VOIP

Look out AT&T and Verizon, there's a new kid in town. Starting this April a fledgling upstart company called Zer01 will offer unlimited 3G data and voice via voice over IP (VOIP) all for a scant $69.95 per month. To put the cherry on top, they will do this with no credit checks and no contracts (source: tech.yahoo.com).

The new company offers the same coverage that AT&T does because it uses essentially the same network as AT&T. Zer01 has purchased its own IP backbone that it will use in a roaming agreement to tunnel from the AT&T network to their IP backbone (source: tech.yahoo.com).

The company plans to offer unlimited talk and data for $69.95 per month with unlimited long distance to 40 different countries for an additional $10 per month. Zer01 gets much of its savings by getting rid of the typical circuit-switched voice calling and instead uses a proprietary VIOP application to place its calls. As of right now, the application only covers Windows Mobile 6 cell phones but will work in the near future with Android, BlackBerry, Symbian, Java and yes an unlocked iPhone too (source: tech.yahoo.com).

Although the calls made will go out over a GSM network, none of the calls are made in GSM. Instead, each device used to make calls with this new system will have its own fixed IP address and opens a tunnel on the server of Zer01. The company gets around the 3G limit put in place by other companies by using interconnect agreements. Zer01 does plan to "police" the system though to ensure that heavy users do not overload a local cellular system (source: tech.yahoo.com).

As far as phones go, the company will work with a multitude of unlocked phones that are brought in by the customers but will also offer several for sale as well. The three phones (all HTC) to be sold by Zer01 will include the TyTnII (known on AT&T as the Tilt), the Touch Diamond and the Touch 3G (source: tech.yahoo.com).

The jury is out on whether Zer01 can compete with the big boys, but their presence will surely make them sweat a bit. If they are successful, expect to see the majors do something that don't want to do; lower prices. Just the fact that Zer01 is cheaper, makes them more attractive to many, but throw in unlimited services and no credit checks or contracts and you have what just may be the next big thing in the cell phone industry.