FreedomPop, an MVNO based in Los Angeles, CA, has launched a low-cost Wi-Fi service that gives users unlimited use of 10 million hotspots across the U.S. for US $5.00 per month. This service dovetails with FreedomPop’s core business model of offering free and very low-cost stripped-down phone plans over the Sprint cellular network; accessing Wi-Fi for most of their needs allows FreedomPop customers to stick with a very bare-bones cellular plan for the remainder of the time when Wi-Fi service is not available.
Republic Wireless, based in Raleigh, NC, is another MVNO offering low-cost phone service that primarily relies on Wi-Fi networks, pulling signals from cell towers only when Wi-Fi is not available. For US $10.00 per month, Republic Wireless offers a plan that moves calls seamlessly between their Wi-Fi network and Sprint’s cellular network, using a special technique developed by their parent company, Bandwidth.com. Alternatively, for only US $5.00 per month, consumers can make calls and connect to the internet solely over Wi-Fi.
While these Wi-Fi-centric phone plans are not going to put cellular network providers out of business anytime soon, clearly there is a shifting dynamic taking place. Wi-Fi speeds have increased by orders of magnitude over the last 10 years. We are not surprised that MNOs are offering Wi-Fi hotspots to complement their mobile phone service. And as more and more hotspots are built in U.S. cities where high-speed fiber optic cable networks are being installed, it is easy to imagine that accessibility to Wi-Fi will at some point be fairly ubiquitous, especially in urban areas. Last month Cablevision announced a phone plan powered entirely by Wi-Fi for US $30.00 per month, and Google is reportedly working on a cellphone service that relies heavily on Wi-Fi.
“As large carriers as well as MVNOs begin to push more traffic onto Wi-Fi, it may be just a matter of time before a robust Wi-Fi network is available across the country and cell towers are relegated to the role of backup service.”
Beith Teitel, Research Analyst at Tarifica