Sprint MVNO wants to takes its infrastructure-free, WiFi-first model to other countries.

Sarah Thomas, Director, Women in Comms

March 26, 2014

3 Min Read
Scratch Wireless Eyes International Expansion

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

About the Author(s)

Sarah Thomas

Director, Women in Comms

Sarah Thomas's love affair with communications began in 2003 when she bought her first cellphone, a pink RAZR, which she duly "bedazzled" with the help of superglue and her dad.

She joined the editorial staff at Light Reading in 2010 and has been covering mobile technologies ever since. Sarah got her start covering telecom in 2007 at Telephony, later Connected Planet, may it rest in peace. Her non-telecom work experience includes a brief foray into public relations at Fleishman-Hillard (her cussin' upset the clients) and a hodge-podge of internships, including spells at Ingram's (Kansas City's business magazine), American Spa magazine (where she was Chief Hot-Tub Correspondent), and the tweens' quiz bible, QuizFest, in NYC.

As Editorial Operations Director, a role she took on in January 2015, Sarah is responsible for the day-to-day management of the non-news content elements on Light Reading.

Sarah received her Bachelor's in Journalism from the University of Missouri-Columbia. She lives in Chicago with her 3DTV, her iPad and a drawer full of smartphone cords.

Away from the world of telecom journalism, Sarah likes to dabble in monster truck racing, becoming part of Team Bigfoot in 2009.

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