Sprint MVNO Scratch Wireless scraps unlimited cellular data plans, cites abuse of offering

Sprint (NYSE: S) MVNO Scratch Wireless dropped unlimited cellular data passes from its offering last week. Scratch makes text, voice and data services free when a user is on Wi-Fi. Like with fellow Sprint MVNOs Republic Wireless and FreedomPop, when a Scratch customer is out of Wi-Fi range, they roam onto Sprint's network.

Before the change, Scratch had offered a $2 cellular data pass for 24 hours of unlimited cellular data usage, a $15 cellular data pass for 500 MB of data to use over 30 days, and a $25 cellular data pass for unlimited data usage over 30 days.

Now, the MVNO will offer a $2 data pass for 24 hours and 50 MB of data usage, a $15 cellular data pass for 500 MB of data to use over 30 days (which is unchanged), and a $25 data pass that offers 1 GB of cellular data over 30 days.

Scratch notified its users last Thursday of the update. Scratch had introduced the one-day unlimited data pass in November 2014 and had the longer-term cellular data passes before that. "Unlike many carriers, Scratch Wireless chose to be transparent about these updates instead of simply throttling data speeds to lower usage when a user hit a certain threshold," a Scratch spokeswoman told FierceWireless.

With regard to the unlimited data passes, the spokeswoman said that, "unfortunately, a few people really took advantage of the unlimited data passes to the point" where Scratch needed to "enforce limits to ensure our unique business model continued to be profitable."

Unlimited cellular voice passes remain intact and unchanged. Customers can get 24 hours of unlimited cellular voice for $2, and unlimited cellular voice over 30 days for $15.

"We still have the highest value solution in the marketplace, with our users saving $76 on average each month," Scratch said in a statement. "Two-thirds of Scratch users have never paid a penny for service and the other third pays very little. This is because they are on Wi-Fi for a majority of the time (84%) and for the few times they are not on Wi-Fi, they can text for free."

"Wi-Fi is everywhere­--that's what our business was built on and we encourage users to take advantage of it at all times, whenever possible," the company continued. "The cellular options are there if and when you need them and a third of users each month opt to buy voice or data passes. We realize this isn't for everyone but it works incredibly well for a lot of consumers. At the end of the day, if a user is looking to be on cellular for a majority of the time, Scratch is likely not a good solution for them. We'll continue to evaluate new passes and cellular offerings based on user data and consumer feedback."

Scratch's service only works with the aging Motorola Photon Q, though it is on the cusp of launching a new smartphone. Later this year Scratch expects to introduce a cloud-based solution that will let its service work on any Android device without altering the operating system.

Scratch, like Republic and FreedomPop, has indicated it does not feel pressure from Google's (NASDAQ: GOOG) Project Fi MVNO, which uses Wi-Fi hotspots for calling and data in addition to cellular connections from Sprint (NYSE: S) and T-Mobile US (NYSE:TMUS).

"I don't see any indication from Google that they are going after our target consumer," Jon Finegold, vice president of marketing for Scratch, said in a recent interview with FierceWireless. "We really focus on the value consumer. We're more disrupting the prepaid guys than we are the Verizon and AT&T's of the world. I think what Google is going to do is probably put some downward pressure on Verizon and AT&T. I don't see Google going after the TracFone subscriber. That's not in their DNA to do that."

For more:
- see this Phone News article

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