Saturday, February 7, 2015

Cablevision Launches First "Wi-Fi Only" Mobile Service

Cablevision Systems has launched Freewheel, its new Wi-Fi-only mobile service. It costs $30 a month for customers who are not buying Cablevision high speed access, but only $10 a month for consumers who do buy Optimum Online broadband services.

The service should provide a huge real-world market test of the attractiveness of a "Wi-Fi only" approach to mobile device access, a possibility that observers have speculated about--as an alternative to mobile service--for decades.

The market window for such an approach might be somewhat limited, some might argue, as coming fifth generation (5G) networks are expected to feature an ability for devices to choose any available access network.

Perhaps significantly, this is not the first time Cablevision has actually contemplated building a service that is mobile and untethered, but not “full mobile.”

Back in the 1990s, when the U.S. government was auctioning a new block of spectrum still called Personal Communications Service (PCS), the thinking was that the new spectrum might be used to create new types of services distinct from mobile service.

At that time, mobile service was expensive and used primarily by people in business. The thinking was that PCS would be a lower-cost type of mobile service.

Predating many of today’s fundamental concepts, the thinking was that Cablevision could create a big network of small cells, with antennas perhaps located at every amplifier location, which would create a grid of transmitting sites supporting in-home or pedestrian call hand-off between cells.

The thinking was that a person walking on a street would be able to transition a call between one small cell and the next, something that would not be possible at highway speeds, though.

So basically, the thinking went, the service would work in the space between a “home cordless phone” and a full “mobile service.”

Cablevision never proceeded with the plan, but as so often happens, some of the basic concepts were correct, but just too early for the commercial market.

Lower cost service, in home or pedestrian use, new spectrum, small cells, a new transmission network and new market entrants were hallmarks of the original Cablevision plan.

On the other hand, as also often happens, the potential market shifted. Whatever thoughts proponents might have had, the release of new PCS spectrum--initially thought to be the underpinning for new types of service--wound up bringing much more competition to the mobile services business, changing a niche market into a mass market.

With the release of PCS spectrum, Sprint and what become T-Mobile US emerged as leading mobile providers in a new mobile mass market.

That competition lead to far-lower service prices, which eliminated the gap between cordless phone and mobile phone service, and also made mobile a viable replacement for fixed voice service.

But the Cablevision Freewheel offer nevertheless is historic, as the first U.S. Wi-Fi only mobile service.

On the other hand, Freewheel faces a market likely to change. Already, most smartphone owners use a “mobile-first, Wi-Fi often” form of access.

In fact, in some cases, the volume of data consumed might already be “Wi-Fi first, mobile second.”

All other service provider offers already incorporate the ability to shift to Wi-Fi as the primary network connection.

A number of providers use a “Wi-Fi first” approach, with a switch to mobile access as needed.

Also, a growing number of service plans are offered at prices comparable to the Cablevision “not a subscriber” price of $30 a month. it is the $10 “current subscriber” price that is disruptive.

So the primary customer base is likely to turn out to be existing Cablevision high speed access customers.

HIstory suggests the offer will face high obstacles. Rarely, if ever, do “non-standard” consumer electronics or communications offers succeed broadly when they deviate from the general market expectations.

That has applied to any number of appliances that blend in-home phone and Internet access capabilities, for example. None have gotten traction. Instead, people rely on smartphones.

Cablevision suggests the service might appeal to several potential  customer segments, including people who do not travel outside the New York metro market that often, or
spend their typical days in WiFi-rich environments, including colleges, offices and homes.

Other potential customer segments include users who worry about overspending on data.

Also, Cablevision suggests, the service might appeal to customers who live in in areas that suffer from poor cellular reception  

The low price for Cablevision high speed access customers ($10 a month) might make it a useful service for children getting their first phones, the company suggests.

The issue is how long the market window exists for a Wi-Fi-only service, given the growing trend to “use any access” approaches.

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