Cablevision Systems Corporation will launch Freewheel, a new low-cost, all-Wi-Fi phone service in the first quarter of 2015, and possibly as early as February. In other words, unlike some other services that rely on Wi-Fi, but default to mobile networks, Freewheel will operate exclusively using Wi-Fi.
In essence, Freewheel is launching using a pattern described by management professor Clayton Christensen, where disruptors enter a market “on the low end,” with offerings that offer clear value for some customers, but do not have all the features, or necessary the performance, of the market-leading offers.
The expectation is that, over time, as the upstart service gains traction, it starts to upgrade capabilities, until, in the end, the feature set and presumed value are equivalent to the market leaders.
Freewheel is the first all-Wi-Fi service to be introduced by a U.S. cable provider and will be offered with the Motorola Moto G smartphone, selling for $99.95.
Freewheel customers also will have automatic access to the Optimum Wi-Fi network of 1.1 million hotspots. The no-contract service will work anywhere in the world where Wi-Fi is accessible.
The service will cost $29.95 per month or $9.95 per month for Cablevision’s Optimum Online customers.
Freewheel primarily will be heavily marketed in areas where Cablevision offers triple play services.
In part, Cablevision is counting on a shift in mobile use cases, and a critical mass of Wi-Fi environment users, to drive demand for Freewheel.
Where ubiquity has been a requirement for voice and text messaging, Freewheel will try to build on some specific customer segments, including users that mainly want to use their mobiles at home, at work or on campus. In that case, the user can live without ubiquitous mobile coverage.
A somewhat related customer target are people who live in areas that have poor mobile signal coverage or are looking for an affordable service for children.
Cost-conscious customers worried about data plan spending, or do not like contracts, are other targets.
Cablevision has considered such untethered or mobile service in the past, exploring a GHz to 1.9 GHz range in the early to mid-1990s. The idea was to launch a service that cost less than mobile service and would not be usable at automobile speeds, but would work fine for consumers who were stationary or walking on the sidewalk.
Cablevision never ultimately launched such a service. The PCS spectrum allowed Sprint and what became T-Mobile USA to attack the mobile market directly, with lower prices, so a separate market for a new type of lower cost, lower functionality service never developed.
But Cablevision thinks it is time to try again. in a different time, with a different end user value proposition. Compared to 1993, untethered mobile Internet access is vastly more important, fully mobile voice and texting arguably a bit less important.
As often is the case, ideas sometimes are “too early.” That was the case for “application service providers,” in many ways the precursors of today’s cloud-based apps and business models.
That also might be said to have been true for the vision of PCS Cablevision originally had developed.
The point is that we now will get a test of whether Wi-Fi actually can provide an alternative to mobile service, a question that has been debated, off and on, at some level, for decades.
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