& cplSiteName &

Scratch Wireless Eyes International Expansion

Sarah Thomas
3/26/2014
50%
50%

SAN ANTONIO -- CCA Global Expo -- Scratch Wireless may be a small startup, but it has big ambitions. The Sprint MVNO says it plans to take its infrastructure-free, WiFi-first service model to other parts of the world, potentially starting in Asia.

Speaking at a Fierce Wireless breakfast here on Wednesday morning, Scratch Wireless CEO Alan Berrey said he wants to replicate his business model -- a completely free consumer wireless service -- anywhere in the world where regulation will allow.

It would be able to do that because Scratch doesn't own any cellular towers, doesn't rely on any vendors for hardware, and its entire telephone infrastructure is built completely on customized open-source code using any open WiFi access points. It does, of course, pay Sprint Corp. (NYSE: S) for cellular connectivity, but becoming a mobile virtual network operator (MVNO) allowed it create a telephony company essentially overnight with no capex required. (See Why WiFi-First Works for Wireless and Is WiFi the New It Network?)

Berrey wouldn't share any subscriber numbers for the service, which launched in December, but said that two-thirds of its customer base solely uses WiFi, meaning they never pay a dime, while one-third uses cellular to fill in the gaps. For its entire customer base, 91% of calling is over WiFi, 75% of the 1,200 text messages sent per month are over WiFi, although they are free on cellular as well, and 86% of the average customer's time is spent on WiFi.

"Our model is to take WiFi to the extreme and utilize it for as much as possible," Berrey explained. "We can essentially replicate Scratch in Hong Kong or Mexico or anywhere, and it costs me zip to create another mobile offering any other place in the world."

So where to first? Berrey didn't have anything specific to announce, but he said he is in conversations with operators in other countries. Scratch's largest investors are in Asia, so that would be a logical place to start.

In the meantime, it's still proving out its model in the US. A limitation of Scratch is that there is no handoff between WiFi and cellular. While that's fine for those customers who want to avoid paying for cellular, it means any call initiated on WiFi will drop if the user moves away from the access point. It's a limitation that applies to Sprint's own WiFi calling service, and is something fellow Sprint MVNO Republic Wireless addressed in its latest device, the Moto X. Berrey said Scratch will also have a handoff solution in its next device, but didn't say which phone or when it would be launched. (See Taqua Lets Mobile Users Talk Over WiFi and Republic Wireless Revamps Its WiFi Handoff.)

Scratch is far from the only WiFi-first operator. It's a new trend that's popped up as WiFi has improved, and operators like Sprint make it easy to wholesale cellular backup. But Berrey says Scratch is profitable on a per-customer model -- it makes most of its money on device sales and cellular usage -- and, if you'll excuse the pun, has only scratched the surface on where it can go next.

"We hope to be disruptive," Berrey said. "Our focus right now is to blow it out in the US, but we're also already in conversations with other countries."

— Sarah Reedy, Senior Editor, Light Reading

(2)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
3/26/2014 | 2:58:37 PM
Re: WiFi usage
Sounds like Scratch is operating on a freemium business model – give away the Wi-Fi service, and make money on self-service and device sales. Is that correct?
Sarah Thomas
50%
50%
Sarah Thomas,
User Rank: Blogger
3/26/2014 | 11:42:17 AM
WiFi usage
Kinda crazy that Scratch's WiFi numbers are so high. It only uses readily available WiFi APs, so that suggests that most people are using Scratch primarily in their homes or maybe at work (although their users tend to be younger). Scratch isn't yet working with a WiFi aggregator like fellow panelist Devicescape, but it's very interested in doing so. I bet we'll see them strike a deal soon.
Featured Video
From The Founder
Light Reading is spending much of this year digging into the details of how automation technology will impact the comms market, but let's take a moment to also look at how automation is set to overturn the current world order by the middle of the century.
Flash Poll
Upcoming Live Events
November 1, 2017, The Royal Garden Hotel
November 1, 2017, The Montcalm Marble Arch
November 2, 2017, 8 Northumberland Avenue, London, UK
November 2, 2017, 8 Northumberland Avenue London
November 10, 2017, The Westin Times Square, New York, NY
November 16, 2017, ExCel Centre, London
November 30, 2017, The Westin Times Square
May 14-17, 2018, Austin Convention Center
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Muni Policies Stymie Edge Computing
Carol Wilson, Editor-at-large, 10/17/2017
Is US Lurching Back to Monopoly Status?
Carol Wilson, Editor-at-large, 10/16/2017
Pai's FCC Raises Alarms at Competitive Carriers
Carol Wilson, Editor-at-large, 10/16/2017
'Brutal' Automation & the Looming Workforce Cull
Iain Morris, News Editor, 10/18/2017
Worried About Bandwidth for 4K? Here Comes 8K!
Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation, 10/17/2017
Animals with Phones
Selfie Game Strong Click Here
Latest Comment
Live Digital Audio

Understanding the full experience of women in technology requires starting at the collegiate level (or sooner) and studying the technologies women are involved with, company cultures they're part of and personal experiences of individuals.

During this WiC radio show, we will talk with Nicole Engelbert, the director of Research & Analysis for Ovum Technology and a 23-year telecom industry veteran, about her experiences and perspectives on women in tech. Engelbert covers infrastructure, applications and industries for Ovum, but she is also involved in the research firm's higher education team and has helped colleges and universities globally leverage technology as a strategy for improving recruitment, retention and graduation performance.

She will share her unique insight into the collegiate level, where women pursuing engineering and STEM-related degrees is dwindling. Engelbert will also reveal new, original Ovum research on the topics of artificial intelligence, the Internet of Things, security and augmented reality, as well as discuss what each of those technologies might mean for women in our field. As always, we'll also leave plenty of time to answer all your questions live on the air and chat board.

Like Us on Facebook
Twitter Feed
Partner Perspectives - content from our sponsors
The Mobile Broadband Road Ahead
By Kevin Taylor, for Huawei
All Partner Perspectives