Wi-Fi is an increasingly important element of the mobile user experience, and two new ventures are aiming to make that experience even more friendly. Start-up Hotspotio is riding on the emerging trend to find access points via social networking, while Scratch Wireless is the latest US MVNO to put free Wi-Fi ahead of cellular connections to attract new users.
Hotspotio is providing a free Android application which allows users to share Wi-Fi connections through Twitter, LinkedIn and Facebook, in exchange for a ‘favor’ ‘ a Twitter follow or a Facebook ‘like’. The app keeps track of those favors and creates a user profile.
Customers can share any Wi-Fi access point for which they have the SSID and password ‘ as long as that is allowed by the operator – and can discover shared networks nearby using the software’s GPS-enabled map. Hotspotio hopes to become the primary way for sharing Wi-Fi passwords, replacing current manual methods. An version for iPhone and iPad will follow early next year.
Meanwhile, Scratch Wireless is a new MVNO, running on the Sprint network, which provides free voice and SMS over Wi-Fi. Its market position is that it only connects subscribers to cellular as a ‘last resort’, where there is no Wi-Fi available. Otherwise, there are no charges except the initial fee of $269 for the handset. The first available model is the Motorola Photon Q and others will follow.
If users want cellular access, they can buy minutes and data passes ‘ ranging from a $2 pass for 30 minutes in one day, to a monthly allowance of 200Mbytes or 250 minutes, either priced at $15. Texting is always free, even on cellular. Although Scratch reduces its own costs by relying heavily on IP, it still provides each user with a single phone number. Its own revenues will come from revenue shares with media and app store partners, and possibly advertising.
Scratch is not the only Wi-Fi focused MVNO in the US. Republic Wireless bundles cellular and Wi-Fi in a low cost $19-a-month package; FreedomPop and some European players like GiffGaff in the UK and Free in France are pursuing the ‘freemium’ model where they derive their revenues from partners and advertisers, or from added-value services, rather than directly from mobile consumers. And many more conventional cellcos are finding ways to incentivize customers to use Wi-Fi wherever possible in order to reduce the strain on their main networks ‘ a process which will be made easier by technologies like Passpoint and Next Generation Hotspot, which will ease handoff between the different access networks and provide the carrier with control over the balance of the connections.
For its part, Sprint has been particularly aggressive about hosting MVNOs on its network, and is keen on low cost providers ‘ including its own Boost and Virgin brands ‘ which can bring in revenues for the legacy CDMA networks even as Sprint pushes its own higher value customers towards LTE.