Cablevision's Dolan says Freewheel and other Wi-Fi services will disrupt cellular industry

Just weeks after launching its low-cost Freewheel Wi-Fi calling and data service, Cablevision (NYSE: CVC) CEO James Dolan told investors during the company's fourth quarter earnings call that he believes Freewheel will disrupt the cellular industry and his company is going to put more emphasis on its Wi-Fi initiatives. 

Specifically, Dolan said that his company is going to prioritize Wi-Fi over the company's traditional video business, which is facing rising programming costs. He noted that margins for data products such as Wi-Fi are increasing.

Although Dolan admitted that it was too early to assess demand for Freewheel, he said that the company is seeing usage outside its footprint primarily by non-U.S. citizens who want a low-cost phone available for when they conduct American business.

Dolan also issued this directive to the wireless industry: "We believe Freewheel will be the beginning of a disruptive force to the cellular industry. As a company, we are solidifying our position as our customers' preferred connectivity company. Freewheel is a natural progression of this strategy and is the first in a series of new products and services which we intend to launch in order to better serve our customers' needs."

Dolan also downplayed Freewheel's limitations as a cellular replacement because of coverage gaps. "The bigger indication and the one that cellular companies have to truly worry about is the one I talked about before. Nobody is building connectivity using cellular. Nobody. Everybody is using WiFi. Why is that? I think the answer to that is obvious, right? WiFi is a much more efficient, effective method of delivering data between a device, a network, and a server. But technology is technology; science is science; and this is what it is. I think that in my opinion the die is cast here."

Cablevision launched its Freewheel Wi-Fi calling and data service earlier this month. The service costs $9.95 per month for Cablevision's Optimum Online customers and $29.95 per month for non-customers, and right now works with only one smartphone, Motorola's Moto G, which is selling at a heavily discounted price of $99.95.

Unlike other Wi-Fi calling services like Republic Wireless or Scratch Wireless, Freewheel does not have a cellular backup option if Wi-Fi service is unavailable.

Many analysts have said noted that are limitations to Freewheel, including the fact that customers may face poor Wi-Fi reception outside of Cablevision's network footprint, and may have to connect to other, non-Cablevision hotspots. And, of course, they won't get service if they can't get onto a Wi-Fi network.

For more:
-see this FierceCable article

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