Cablevision is dialing up your cellphone
Cablevision (CVC) may be turning the cellphone service industry on its head.
The company is becoming the first cable provider to offer WiFi wireless service. Called “Freewheel,” Cablevision will launch the program in the New York area, where it already has more than 1 million WiFi “hot spots.” The voice, data and text plan will cost Cablevision customers $9.95 a month. Others can get it for $29.95 a month.
Yahoo Finance Columnist Rick Newman likes the idea.
“I think it’s great that this is happening,” he says. “It would be great to see a new kind of technology and new kind of competition to the Big 4-- AT&T (T), T-Mobile (TMUS), Verizon (VZ) and Sprint (S). We just don’t know if it’s going to work. That’s what we have to find out.”
Get the Latest Market Data and News with the Yahoo Finance App
Newman thinks one group of customers might definitely be interested.
“They’re targeting this to people who may be willing to pay less for spottier service, such as college students who spend most of their time on campus,” he says.
Yahoo Finance Editor in Chief Aaron Task agrees.
“Google (GOOGL) is proposing something similar,” Task notes. “And I think it would be appealing to a college student or someone on a fixed income or anyone who knows they are going to be near a WiFi hot spot regularly. Why not pay less and try to break the grip the Big 4 have on consumers now for their cellphone service?”
However, Newman says despite Cablevision’s move, we’re still a long way from a massive change in the cellphone service market.
“It’s not a game changer yet,’ he argues. “It’s fair to call it an experiment. This is only going to work starting with one phone (Motorola’s Moto G). What we don’t know is how well it’s going to work. What they are doing is patching together WiFi and cellular service, so it’s important to get the technology right so you’re not constantly losing your calls or data interruptions as you’re transitioning from hot spot to hot spot.”
Newman says Cablevision’s effort to move into the wireless arena makes perfect sense.
“Cable companies are struggling with the loss of customers on the TV side,” he points out. “So they’re trying to figure out where is our growth going to come from. I hope it works. But I think we’re going to have a period of experimentation here first.”
Newman also hopes consumers will eventually benefit from cable companies getting into the wireless market.
“What would be great-- and everyone with a cellphone would love it-- if you didn’t have to commit to that long-term contract,” he says. “So if we could get to something that looks a little bit more like ala carte pricing for cellphone service, that would be pretty cool.”
