Helio ends hybrid WiFi/3G data plan; What's next?

Helio ends hybrid WiFi/3G data plan; What's next?
MVNO Helio is ending its hybrid WiFi/3G data plan next month. It hasn't said why, although it's probably safe to assume it was lack of uptake (Why else do operators pull plans?). The plan was introduced last October using the some 55,000 hotspots controlled by Boingo and Sprint Nextel's CDMA2000 1xEV-DO service which Helio buys minutes from. Using specially designed software, Helio Hybrid combined the use of an external 3G card with a laptop's built-in WiFi capability, automatically searching for the best wireless signal from free private or commercial WiFi hotspots and from the EV-DO networks. Then it automatically connected users to the best-performing network. The card was available on Helio's website for free with a two-year customer agreement and a data plan costing $85 per month for unlimited access.

The plan was actually quite attractive and got some rave reviews since 3G-only plans cost about the same. Verizon Wireless, Sprint Nextel or AT&T don't offer a decent WiFi plan alongside their 3G services, let alone on a single bill. They'd rather keep traffic on their own networks. T-Mobile offers attractive packages but doesn't really have a competitive high-speed mobile data network.

WiFi should have been the preferred connection method both because it's faster than 3G and it's cheaper for Helio because, as an MVNO, it has to pay Verizon or Sprint for each minute or bit they use.

Does that mean WiFi/3G plans are unattractive to end users? I suspect that Helio is suffering more from spreading itself too thin. The move to offer mobile broadband service is a divergence from its main business plan: to offer young tech-savvy users an advanced mobile-phone experience. A data-card WiFi/3G offering is still attractive primarily to the road warrior business professional.

Hopefully, Helio will continue to experiment with WiFi. Chances are it will, given the fact that Helio's CEO Sky Dayton is the founder and chairman of Boingo. But Helio is also burning through a lot of money and will need significantly more than the $440 million its parent companies, Earthlink and SK Telecom in Korea, have pledged to it.

Can it afford to keep experimenting? Right now it's working to differentiate itself from fellow MVNO Amp'd Mobile, which is going after the same teen demographics. WiFi may present a key differentiator for Helio beyond just access. For instance, it could take a cue from T-Mobile, which is running a promotion with Sony Computer Entertainment America that involves offering a new firmware upgrade for its PlayStation Portable (PSP) system, called version 3.30, that will enable PSP users to play games online, browse the Internet and download podcasts on all 7,000 of T-Mobile USA's hotspots for free for six months. After the six months are over, T-Mobile will offer PSP owners an option to purchase a subscription at a special rate.

It's a rather creative way for both Sony and T-Mobile to drive customer adoption. Sony notes that more PSP users are going online to challenge each other in multi-player games. Giving them the ability to do that in more places only increases the attractiveness of the device. T-Mobile, in return, potentially receives access to the millions of PSP owners who will try the service for free, get hooked on using it for six months for online gaming and be willing to pay the special rate reserved just for them. A similar offering could give Helio the opportunity to bundle mobile services and cross-sell applications. As mentioned in today's Spotlight story, Nintendo DS systems account for about 25 percent of the WiFi traffic in McDonald's restaurants.

Finally, I'm pleased to announce this year's 2007 FierceWireless Fierce 15 list. It consists of the 15 privately held startups the staff at FierceWireless believes hold the most promise to help shape the wireless industry and establish a successful presence in this market. Check out this year's list here. --Lynnette