The entry by Cablevision and Google could intensify the already heated price wars for mobile phone service. Fred Katayama reports.
New competition for mobile phone companies and their endless price wars. Cablevision says it's launching a WiFi-only phone service that's cheaper than existing cellular plans. And it won't require a contract. Its "Freewheel" service will offer unlimited calls, data and text to its Internet subscribers for $9.95 a month and to non-customers at $29.95 a month. Cablevision's service will be the first of its kind by a cable company. This comes one week after reports surfaced that Google will offer phone plans by getting wholesale access from Sprint and T-Mobile. Google's service would pick whichever offers the best signal - cellular connections or those WiFi access points known as " hot spots," according to the Wall Street Journal. Cablevision's service lacks that cellular backup. It would work anywhere worldwide but only if the user has access to a Wi-Fi signal. So it's targeting users in places with a lot of hot spots like colleges and offices. Its network has more than a million hot spots in the New York metro area. Brean Capital senior analyst Todd Mitchell said the plan isn't a phone substitute. He says it will encourage some Cablevision customers to pay a few extra dollars to get the phone service, deterring them from going to mobile companies like Verizon. All this comes as wireless carriers beat each other up with price cuts, free tablets, and offers of more data. Verizon, the U.S.'s largest mobile carrier, reported last week that it lost some subscribers to rivals in the latest quarter amid heavy promotions. And AT&T is expanding its network abroad: it's buying Nextel Mexico for $1.9 billion.