Cablevision Systems believes it has cracked the code toward monetizing its extensive WiFi network with the launch of Freewheel, a WiFi-only phone product that will offer unlimited talk, data and text for a fraction of the cost of traditional wireless phone service.
Freewheel will be available online early next month at www.freewheel.com and will be priced at $29.95 per month for non-Cablevision high-speed data customers and $9.95 per month for the company’s current broadband subscribers. Freewheel will be accessed exclusively over Motorola Moto G handsets initially, which will be available for purchase at the highly discounted rate of $99.95, or about half their base retail price. Additional devices will be added to the mix later and eventually there will also be an app for the product.
“The goal is to have a device that we think is multi-purpose and serves the needs of the customer as well,” Cablevision executive vice president of product management Kevin Packingham said in an interview.
The product could be one of the keys that helps unlock what many operators believe is a treasure trove of hidden value – their WiFi networks. Primarily used as a retention tool for wireline broadband service as WiFi’s popularity has grown, operators have searched for ways to monetize their investment.
Cablevision was one of the pioneers in cable WiFi, spending $300 million back in 2007 to construct what has become one of the most robust WiFi networks in the country, with about 1.1 million hotspots both inside and outside the home. Cablevision also is a member of the Cable WiFi roaming alliance, which includes Comcast, Time Warner Cable, Cox Communications and Bright House Networks and has access to about 300,000 hotspots in businesses and other indoor and outdoor public venues.
“Cablevision recognizes the growing shift to WiFi-driven consumer electronic devices and services,” said Cablevision CEO James Dolan in a statement. “As a company, we are focused on providing services for these consumers and solidifying our position as the New York market’s premier connectivity company. Freewheel is the next leap forward in the advancement of the connected lifestyle, and our Optimum WiFi network and the prevalence of WiFi nationwide serves as its foundation.”
Dolan has been a big proponent of connectivity and along with other cable executives has identified WiFi as a means to get there. But with a WiFi-only phone, which would lose its broadband connection once the user leaves a hotspot coverage area, Cablevision could be taking a bit of a gamble. In the past, some analysts had expected cable companies to offer a hybrid WiFi/cellular product to customers.
In an interview Sunday, Cablevision COO Kristin Dolan said data usage trends have changed dramatically.
“Particularly in or footprint, with 1.1 million hotspots, we’ve seen massive utilization of data over the Optimum network,” Kristin Dolan said. “We didn’t feel like we needed any cellular backup because, for what people are using these devices for – which is predominantly data – we’re already the superior choice.”
She added that as voice usage declines and data grows especially on wireless networks, it seemed like a natural progression of that connectivity strategy.
“This is something that Jim [Dolan] really pushed on. He wanted us to come up with a way for people to expand their connectivity relationship with Optimum outside the home through WiFi,” Kristin Dolan said. “The best way to have a manifestation of that was to do this product, to put a device in their hand that was pre-configured for the network. …It harnesses the power of the backbone that we’ve spent the past seven or eight years building.”
According to the company, Cablevision customers used its WiFi network nearly 1 billion times in the fourth quarter of 2014 and those same subscribers consumed more than 19 billion megabytes of data during that time frame. Currently about 3.6 million devices are registered on Optimum WiFi, or about 2.88 devices per home.
Although Freewheel may not be for everybody, Cablevision believes it is an ideal offering for college students, office workers and people that work at home in WiFi-rich environments, current cell users that overspend on data or regularly exceed their data limits, as well as budget-conscious customers and those looking for a good first device for their children.
The product will be marketed as Freewheel, powered by Optimum and will be heavily marketed in the New York metro area. Kristin Dolan said the teaser campaign begins today (Jan. 26), aimed at a younger, hip, urban audience. The company will run the overall marketing campaign across print, broadcast, outdoor and its own avails throughout the launch.