The day the US mobile operators have dreaded will arrive next month, when Cablevision launches Wi-Fi-only phone services, the first major cableco to do so. Cable operators round the world have been investing heavily in WiFi networks, threatening to reduce their reliance on MVNO deals with mobile carriers and challenge them in a wide range of services.
So far, the members of the CableWiFi roaming alliance in the US, including ringleader Comcast, have danced around the issue of whether they would go head-to-head with mobile services, concentrating on the need to add a wireless element to their triple play fixed line bundles. However, as they achieve massive coverage through hotspot building and aggregation, and by attaching homespots (with a second, open SSID) to their residential broadband lines, they are in a position to offer a low cost alternative to cellular services in many areas.
WiFi does not match cellular for full coverage and mobility, nor for voice QoS (quality of service), but it is certainly ‘good enough’ for many users, as the popularity of mobile Skype has indicated. Cablevision will call its new offering ‘Freewheel’, leveraging the 1.1m WiFi hotspots it had deployed in its Greater New York service area over the past seven years.
Cablevision was the first of the larger US cable providers to recognize the potential of WiFi, at a time when peers like Comcast and Time Warner Cable were still investing in their own cellular spectrum and in mobile-focused alliances, first with Sprint/Clearwire and later with Verizon. Back in 2007, the Cablevision hotspots were built purely to allow subscribers to access high speed internet when on the move, but the potential applications for WiFi have expanded as the technology has improved in terms of data rates and QoS. Automated log-in and cellular hand-off, thanks to the new Hotspot 2.0/Passpoint standard, will further boost WiFi’s claim to be ‘carrier-class’. This is enabling WiFi-first and WiFi-only handset-based services for the first time.
Cablevision will offer its broadband customers unlimited WiFi voice, data and text for $9.95 a month, while non-subscribers will pay $29.95. The latter shows another important aspect of WiFi for cablecos – the opportunity to move beyond their fixed-line service areas. Freewheel will initially be marketed in its provider’s New York territory but will later be offered nationwide.
The first handset on offer, from next month, will be the Motorola Moto G, priced at $99.95 but Cablevision will add further devices and is considering an app so that customers can use their existing smartphones. It is also evaluating “attractive” international WiFi calling plans.
The cableco is still steering away from throwing down the gauntlet to mobile carriers too openly, claiming its aim was to add value for quad play customers, not to become a mobile service. However, The Wall Street Journal reminisced about the day Cablevision launched fixed-line phone services and claimed it had no intention of going after the phone companies – but has now become the biggest landline phone provider in its territory.
“We’re riding the wave, and WiFi is the clear winner as the technology,” COO Kristin Dolan told the Journal. She acknowledged that WiFi voice would not be adequate for enterprise users such as conference calling from a car, but would appeal to consumers with limited budgets. She added that, if users were not moving about too much, they could get a better experience from WiFi than cellular, especially as there have been significant improvements in aspects such as hand-off between hotspots. EVP of product Kevin Packingham was more bullish, saying: “We definitely know our hotspots offer a better, faster data experience than cellular.”
And as the CableWiFi network expands, it will hope to promise similar advantages nationally via roaming. The QoS promises of a major provider, with control of its own infrastructure, may help justify the fact that its prices are higher than those of WiFi-first MVNOs like Republic Wireless and FreedomPop. The latter recently launched its first WiFi-only option starting at just $5 a month, extending its current freemium approach to WiFi-led handset services.
The FreedomPop news also highlighted the way that, in some types of services, WiFi-only will squeeze mobile carriers’ consumer revenues and MVNO fees, driving them to make sense of their spectrum investments in other sectors such as enterprise. But FreedomPop’s new service also highlights another important trend in public WiFi – the continuing move towards the crowdsourced model initiated by FON, which has potentially disruptive effect for traditional telcos and cellcos in the US and Europe, in particular.
FON’s crowdsourced homespots model started in democratic mode, but has largely been ambushed by broadband and cable operators, which are using the community hotspots (home WiFi routers with a second SSID left open for public access) to build massive WiFi coverage zones at low cost, leveraging their existing broadband lines. That is enabling players like Iliad in France and Comcast in the US to reduce their overall network costs, giving them the opportunity to undercut rivals and create a quad play with reduced capex investment.
Such trends have spawned WiFi-first services from MVNOs like Republic Wireless, in which users only venture onto the cellular network when WiFi is unavailable. That reduces the provider’s fees to the MNO, and gives it greater control of the subscriber’s behavior and data. In the hands of larger players (the cable WiFi players in the US are almost certain to launch such services), this could be a major blow to mobile operator revenues and force them to reduce their own prices, especially for data services – fully mobile voice is still inadequate on WiFi.
Despite that last point, some WiFi-only services are emerging based on handsets, targeted at consumers who use voice rarely or are willing to accept a lower quality of service than cellular, in return for very low monthly fees. FreedomPop started selling a WiFi-only handset last year and has now added WiFi services to its portfolio alongside its existing WiFi-first offering It will offer unlimited voice, SMS and data over WiFi only, for just $5 a month.
That is in addition to its existing WiFi-first deals, which follow a freemium approach – 200 VoIP minutes, 500 texts and 500Mbytes of 4G data come free, and then there are charges for more usage, mainly on LTE, encouraging users to stay on the WiFi network as much as possible.
For those willing to do away with a cellular fallback altogether, FreedomPop can achieve its rockbottom WiFi-only tariffs because it has a low cost base. As well as reducing the amount of cellular usage so that it pays less to its MNO host, it has not invested in its own WiFi build-out but is moving towards a crowdsourced model reminiscent of FON. For now, it has aggregated a network of about 10m hotspots run by many ISPs and aggregators, but hopes to expand that further via crowdsourcing techniques and homespots.
The first step will be a forthcoming deal with Devicescape, which could add millions more locations, especially in smaller businesses, said the firm. Then it hopes to start asking its customers to add their home WiFi routers to the network, FON-style.
CEO Stephen Stokols, in an interview with GigaOM, said that the FreedomPop service could be found in many large retail locations such as Walmart and Starbucks, as well as outdoor metrozones. However, there is no deal with Boingo, which may limit airport coverage – not that business travellers are FreedomPop’s target market, of course.
The company has developed an Android application which automatically logs onto an available FreedomPop access point and sets up secure links, and it plans to migrate to the WiFi Alliance’s nascent Hotspot 2.0/Passpoint login and roaming standard as that gains critical mass. This app will enable customers to sign up for the new WiFi access services from their own devices (though no iPhones yet), if they do not wish to purchase the FreedomPop handsets or tablets, and of course it takes the provider beyond the cellular space, where it resells Sprint 4G services, and into the bigger fields of WiFi.