Cablevision Systems Corp., the New York cable company, is launching a national WiFi-only telephone service for $29.95 a month - a first for a big cable-TV company.
Subscribers to Cablevision's TV, Internet, and phone services will pay just $9.95 a month for the new service, branded as Freewheel.
Freewheel is part of an intense interest by cable companies, including Comcast Corp. and others, to develop wireless phone services as people become accustomed to constant access on smartphones and tablets.
Last week, Google Inc. announced plans for a phone service that uses WiFi and traditional cellular technology, a hybrid that many believe is the goal of Cablevision and other cable companies.
With a hybrid service, a phone subscriber would jump onto a traditional wireless network, such as those operated by Verizon or Sprint, when they drop off WiFi.
Freewheel will be available in Philadelphia but it makes most sense for Cablevision TV or Internet customers to subscribe to it because of the discount.
"Cablevision's real game is almost certainly to use the new Freewheel service as a beta test for what will eventually be a WiFi-first, rather than WiFi-only, service," telecom analyst Craig Moffett said on Monday. "That's the game-changer."
Added Moffett, "A WiFi-first service, particularly if offered by Comcast, which has a vastly larger footprint and marketing capacity, has the potential to attract a meaningful number of customers, if priced aggressively, and could be enormously deflationary for the traditional cellular providers."
Comcast spokesman Charlie Douglas said Monday the company has nothing to announce but WiFi "is something we continue to evaluate."
As part of its proposed $45 billion deal for Time Warner Cable Inc., Comcast has told the government it could offer a WiFi-based phone service.
As with any WiFi service, there will be significant limitations on Freewheel's reception as subscribers need to access WiFi hot spots to talk, text, or stream data.
But Freewheel's reception may be easier - and more expansive - than one would first think. Cablevision itself has 1.1 million hot spots in its franchise territory, mostly around the New York area. A Freewheel subscriber also can use freely available WiFi hot spots in Starbucks or other businesses.
In addition, Freewheel can use WiFi hot spots in a cable industry WiFi consortium. Comcast, the nation's largest cable-TV company and part of the consortium, says it was aiming for eight million public WiFi hot spots in its franchise areas by the end of 2014. Others in the cable industry WiFi consortium include Time Warner Cable, Bright House Networks, and Cox Communications.
Cablevision says Freewheel allows for unlimited talk, data, and text. It comes with no contract and should be available in February. Subscribers will have to use a Motorola Moto G phone, which costs $100, Cablevision said.