Cablevision and Google to Challenge Wireless Business Model

In a first time move for a U.S. cable operator, Cablevision announced it would launch a Wi-Fi-only mobile phone service dubbed Freewheel next month. For $9.95 per month, Freewheel will offer unlimited data, talk and text to Cablevision broadband Internet subscribers (the company also plans to offer a $29.95 service for non-customers). Meanwhile, Google is expected to launch its own wireless service this year through deals with Sprint and T-Mobile. Both services are expected to put pressure on the wireless industry, already at war over prices. 

Google’s plan to resell Sprint and T-Mobile wireless access as a Mobile Virtual Network Operator (MVNO) could impact the wireless industry’s current business model. The service would identify which Wi-Fi hot spots and Sprint and T-Mobile cell connections offer optimum signals for routing calls, texts and data.

streamingBoth plans would challenge the industry’s traditional system of providing service through exclusive agreements with individual carriers such as AT&T, Sprint, T-Mobile or Verizon.

“While that approach has helped carriers collect the steady income needed to support massive investments in what are now some of the world’s most advanced wireless networks, critics say it leads to higher prices and sometimes worse service,” reports The Wall Street Journal.

“Cablevision has spent the last eight years building out its Wi-Fi network, which now offers more than 1.1 million hot spots for both indoor and outdoor access in the New York metro region,” adds The New York Times.

“That period coincided with the introduction of smartphones and an explosion in the use of Wi-Fi rather than cellular connections for mobile activities like browsing the Internet and watching videos.”

According to Cisco, more than 90 percent of U.S. mobile data traffic in 2013 was delivered over Wi-Fi networks. And a recent Adobe Mobile Benchmark report indicates that more than half of smartphone browsing and 93 percent of tablet browsing takes place over Wi-Fi. However, wireless billing does not necessarily reflect the growing trend.

FreedomPop, Republic Wireless and Scratch Wireless are among the startups that have been experimenting with ways to reduce consumers’ wireless bills by leveraging Wi-Fi technology. Cablevision and Google are the first major companies to throw their resources, reputations — and in the case of Google, a leading operating system in Android — behind such an idea.

Speaking at the World Economic Forum, Google CEO Eric Schmidt suggested that better broadband connectivity has the potential to solve major world problems — from governance to education to human rights, as noted by VentureBeat.