A new U.S. MVNO, Scratch Wireless, has partnered with Chinese device manufacturer Coolpad to offer an Android smartphone for an unsubsidized price of US $99.00. The Coolpad Arise, which is expected to start shipping in June, comes provided with a Wi-Fi radio that seeks out the best public Wi-Fi signals and automatically privileges them over cellular service. Scratch’s service is free if only Wi-Fi is used, and users are charged only if they want to switch to the MVNO’s cellular service, which runs on Sprint’s 3G network. Scratch offers prepaid daily, weekly or monthly packages or “passes” for voice and data—ranging from US $1.99 for 24 hours of voice to US $14.99 for 30 days of voice, and US $1.99 for 50 MB that must be used within 24 hours to US $24.99 for 1 GB that must be used within 30 days.
Scratch Wireless is among of a new breed of “Wi-Fi first” carriers that rely on the growing ubiquity of public Wi-Fi networks. Google has jumped into this arena with its recently-launched Project Fi, an offering that includes cellular service on both Sprint and T-Mobile’s networks and chooses Wi-Fi before either of those. The differences are that Google is developing its own Wi-Fi network, and that the service is not free, even if traffic is not handed over to cellular. Also Google’s proprietary device, the Nexus 6, is far more expensive at around US $649.00. Clearly Scratch Wireless does not have anywhere near the reach that Google does, but its modest offering is likely to appeal to very budget-conscious users who are not heavy data consumers. The offer of a very inexpensive smartphone along with connectivity that theoretically, at least, the customer would never have to pay for is certainly seductive. What remains to be seen is how it plays out in practice—whether there is enough free Wi-Fi to provide sufficient connectivity. Even if users do end up buying voice and data “passes,” the device itself could be a persuasive selling point for the MVNO. Up until now, Coolpad has been marketing its products in its home country, where there is a vigorous market for low-cost smartphones. Its debut in the U.S. could show that there is pent-up demand there for such devices.
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The Tarifica Telecom Industry Research Department