SAN ANTONIO – Only months into its launch, Scratch Wireless said it has found a strong response to its “free” wireless service offering.
The carrier, which announced its formation last October and officially launched in December, said that a majority of its customers are indeed not paying a cent per month for wireless services thanks to greater-than-expected reach of free Wi-Fi connections.
RCR Wireless News caught up with Scratch Wireless Co-founder and CEO Alan Berrey at the recent Competitive Carriers Association event in San Antonio. Berrey provided insight into the company’s business model, consumer reception to its service and its roaming partnership with Sprint.
Berrey explained that while most of Scratch Wireless’ customers were taking advantage of the “free” aspect of its service, there were a good portion of customers tapping into cellular voice and data packages that helped push the company’s overall average revenue per user to around $8 per month. While that would seem insignificant compared with the $50-plus ARPU posted by more traditional carriers, Berrey noted that Scratch’s low operating costs allowed its ARPU results to support a profitable business.
Scratch launched last year with $5 million in funding, offering a service that for free included all voice, messaging and data connectivity over a Wi-Fi connection. For those looking to roam beyond a Wi-Fi signal, Scratch has partnered with Sprint to offer day and monthly passes for voice and data services, though messaging is offered gratis regardless of connectivity. Cellular voice packages include 30 minutes of calling per day for $2, or 250 minutes over 30 days for $15. Data packages, which include access to Sprint’s CDMA-based 3G or LTE network, cost $2 per day for 25 megabytes of data or $15 for 30 days for 200 MBs.
To access these services, customers will be limited initially to a single smartphone provided by Scratch in the form of the Motorola Photon Q. That device is available at an un-subsidized price of $269. Scratch Co-Founder and CEO Alan Berrey explained that the integration necessary into the Android operating system has so far limited device availability to just the single device.
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