Sprint MVNO Scratch Wireless starts offering 'free' Wi-Fi-based service

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Three months after announcing its offering, Sprint (NYSE:S) MVNO Scratch Wireless is launching its service: a Wi-Fi-based service that it claims will let customers get wireless service for free, with no catch. The service is only available by invitation, and is described as a beta.

Scratch makes text, voice and data services free when a user is on Wi-Fi, and makes texting free all of the time. Like with fellow Sprint MVNOs Republic Wireless and TextNow, when a customer is out of Wi-Fi range, they roam onto Sprint's network.

However, unlike those services, customers can choose whether or not they want to buy passes to get access to voice and data services--or not. The passes provide minimal amounts of each, but can be purchased on a daily or month-long basis.

Scratch offers 24-hour data and voice passes for $1.99 each, and the passes provide 30 minutes of cellular calling or 25 MB of cellular data. Scratch also sells 30-day data and voice passes for $14.99 each and they provide either 250 cellular voice minutes or 200 MB of cellular data. Customers can buy the passes through an app on their phones, and can automatically have the service start by entering a PIN linked to their billing information.

Source: Scratch Wireless

Right now, the service supports just one phone, the Motorola Mobility Photon Q, for $269 (the device is a bit long in the tooth; it hit Sprint's network in the summer of 2012). Scratch has said it is working with Motorola on other potential devices, but there is no timeline on when additional devices could be introduced.

In a recent interview with FierceWireless at the 2014 Consumer Electronics Show, Jon Finegold, vice president of marketing at Scratch, said early usage patterns of customers in its beta trial show that 95 percent of voice calling is on Wi-Fi and around 34 percent of texting is on Wi-Fi. He said 28 percent of users have paid for some form of cellular voice or data.

Finegold and Scratch CEO and co-Founder Alan Berrey declined to say how many customers are in the invitation-only beta or how long it will last. Berrey said that Scratch has real customers who have "paid the full freight" for their Photon Q devices.

Berrey said that Scratch appeals to customers who want to use Wi-Fi as much as possible but don't want to have to pay a large cell phone bill every month. "I have to pay every month for the blessing of connecting over Wi-Fi," he said of most cellular customers. "That's just crazy."

Scratch uses public Wi-Fi hotspots and is not currently working with a Wi-Fi hotspot aggregator such as Boingo Wireless or Devicescape, but Berrey has said Scratch is "absolutely" interested in a deal with such companies. In the CES interview, he said that the "cable industry has some interest in what we're doing" and that the cable companies' CableWiFi initiative could increase Scratch's value proposition. Comcast, Time Warner Cable, Cablevision, Cox Communications and Bright House Networks created the network, which has more than 200,000 hotspots now, and lets their customers connect to those hotspots for free. Berrey said that in the next 12-18 months he expects the MSOs to add "several million" new hotspots.

Berrey said that Scratch has "a few engineers" working on improving the quality of service on its voice calls over Wi-Fi, but that the handoff from Wi-Fi to cellular is lower on the company's list of priorities. "We'll be enhancing the voice side of it," he said. "Right now our focus is on making this the best holistic experience."

In contrast, Republic now claims that its handoff between Wi-Fi and cellular is seamless, because the service is engineered via an "intelligent predictive algorithm" that can determine, based on factors such as location, jitter and packet loss, when a call is starting to drop on Wi-Fi. The service then anchors that call in the cloud and in milliseconds is able to transfer it over to cellular service, according to Republic. Republic leverages Devicescape's curated network of Wi-Fi hotspots for its service.

For more:
- see this Scratch release
- see this Scratch site

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