Starting next month, Cablevision will be the first cable operator to offer a Wi-Fi based phone service to both subscribers and non-subscribers.
The service, which is called “Freewheel,” will provide users with unlimited data, talk and text over Cablevision’s 1.1 million New York metropolitan area Wi-Fi hotspots or anywhere else in the world where Wi-Fi is available.
Freewheel will cost $29 per month for non-subscribers and $9.95 for Cablevision’s data subscribers, the latter of which is up to 80 percent less than competing cellular services, with no annual contract. For now, Freewheel will work with Motorola’s Android-based Moto G smartphones, which come with a discounted price tag of $99.95.
“Cablevision recognizes the growing shift to Wi-Fi driven consumer electronic devices and services,” said Cablevision CEO Jim Dolan. “As a company, we are focused on providing services for these consumers and solidifying our position as the New York market’s premier connectivity company. Freewheel is the next leap forward in the advancement of the connected lifestyle, and our Optimum WiFi network and the prevalence of Wi-Fi nationwide serves as its foundation.”
While cable operators have historically struggled with offering a cellular service, Cablevision was an early proponent of Wi-Fi. Cablevision started its Wi-Fi network build out in Long Island back in 2008 at an estimated cost of $300 million. Since then Cablevision has been a leader among cable operators when it comes to Wi-Fi by offering it at train stations and at indoor and outdoor high traffic areas.
Cablevision is also a member of CableWiFi alliance, which is a roaming agreement that also includes Comcast, Time Warner Cable, Cox Communications and Bright House Networks that allows subscribers of the participating companies to access each other’s Wi-Fi networks. With more than 300,000 hotspots, the CableWiFi partnership is the largest Wi-Fi network in the nation.
“There has been a dramatic shift in how consumers use their mobile devices; today, it’s all about data, and WiFi is now preferred and clearly superior to cellular,” said Kristin Dolan, chief operating officer of Cablevision. “Freewheel is powered by the strength of our Optimum WiFi network integrated with a high-quality device to deliver a breakthrough service for truly unlimited data, talk and text without the high costs imposed by cellular providers.”
Since Freewheel is Wi-Fi only, and doesn’t include a wholesale agreement with another cellular service provider as backup for when Wi-Fi isn’t available, MoffettNathanson analyst Craig Moffett said it was more of a proof of concept service than a true “Wi-Fi First” offering.
“The service itself is unlikely to be financially material for either Cablevision or the wireless industry,” Moffett wrote in an e-mail this morning. “The concept, however, is a very big deal.”
Moffett sees Freewheel as Cablevision’s first step towards a Wi-Fi First service, which would be “the game changer.”
“A Wi-Fi First service, particularly if (when) offered by Comcast, which has a vastly larger footprint and marketing capacity, has the potential to attract a meaningful number of customers if priced aggressively and could be enormously deflationary for the traditional cellular providers,” he wrote.
Moffett also compared Freewheel with Republic Wirelesses’ Wi-Fi only plan, which costs $5 a month, but charges $50 more for the same Moto G phone.
“With a footprint that covers just 4 percent of the U.S., and a service that will have limited appeal because of its lack of cellular backup, this (Freewheel) service isn’t going to have much impact on the wireless companies, nor will it generate enough revenue for Cablevision to be material,” he wrote. “The best Cablevision might hope for is to monetize the company’s Wi-Fi footprint, even if only to a small degree, by lowering churn.”
