Cablevision has come up with a new way to monetize its growing network of WiFi hotspots. For $29.95 per month, or $9.95 per month for existing broadband subscribers, Cablevision is introducing a new WiFi phone service with no annual contract.
Dubbed Freewheel, the service works over any WiFi connection and comes with free access to Cablevision Systems Corp. (NYSE: CVC)'s Optimum WiFi hotspots. At launch -- scheduled for some time next month -- Freewheel will be available exclusively on the Motorola Mobility LLC Moto G smartphone. (See Cablevision Plots WiFi Market Disruption.)
At first glance, Freewheel looks revolutionary. It's a low-cost cellphone service alternative offering "unlimited data, talk and text." But on closer examination, the value is harder to find.
Cablevision Optimum Online subscribers already get free access to Cablevision hotspots, which means any Internet-connected device (including the iPod Touch, which already acts like a smartphone without the cellular plan) can theoretically deliver the same functionality as a Freewheel phone… for free.
And for non-Cablevision subscribers, $29.95 sounds awfully steep for access to the cable company's 1.1 million WiFi hotspots. Boingo Wireless Inc. offers access to a similar number of hotspots on two devices for $9.95 per month.
From a screenshot of the Moto G phone with Freewheel service, it appears that there are one-click options for WiFi calling, text and voicemail. That's a useful feature, but also easy to replicate with existing Android and iOS apps. What service are users getting that's worth a significant monthly fee?
There's no doubt that cellular carriers and other WiFi network operators will be watching the Freewheel rollout closely. If WiFi service plans become a competitive alternative to traditional cellular service, it will prompt a major power shift in the wireless carrier market. (See Passpoint Moves Towards Carrier WiFi and Investments on the Rise for Carrier-Grade WiFi.)
However, Freewheel -- at least as it stands now -- can't claim that achievement.
In order to make WiFi phone offerings truly disruptive, providers will have to deliver higher-quality service than standard WiFi, a price that's not substantially above other WiFi hotspot offerings and/or compelling new features. The cable industry, including Cablevision, still has work to do.
— Mari Silbey, special to Light Reading