This is big: Cablevision launches Wi-Fi-only mobile phone service

Cablevision is getting ready to pick a fight with your mobile phone company.  Next month, the cable operator is going to introduce a low-cost mobile phone service dubbed Freewheel that’s based entirely on Wi-Fi connectivity. Freewheel will offer existing Cablevision internet service subscribers unlimited talk, text and data for a mere $9.95 per month. Consumers who don’t use Cablevision’s internet service can sign on for $29.95 per month.

At launch, Freewheel is only working with one handset: [company]Cablevision[/company] will sell Motorola’s Moto G for $99.95, and the phone will come preloaded with apps that automatically authenticate with any of the company’s hotspots.

Cablevision started building out its own Optimum Wi-Fi network in 2007, and now has more than 1.1 million hotspots in the New York tri-state area. The company adopted Fon-like Wi-Fi sharing last year, essentially turning its customers’ Wi-Fi routers into public hotspots by adding a second, separate network that can be accessed by any Optimum customer, and now by any Freewheel subscriber as well.

In addition to that, Freewheel customers have access to some 300,000 hotspots across the country, courtesy of the CableWiFi initiative that brings together Wi-Fi access points from big cable companies like [company]Comcast[/company], Cox and Time Warner Cable. And of course, the device will also work with any other Wi-Fi network a user has access to, whether it’s at home or at their office.

However, Freewheel users may have a harder time staying connected on their commute: The service doesn’t include any fall-back option to connect to mobile networks when Wi-Fi is unavailable, which means that users won’t be able to make calls or access data services when they’re not connected to a Wi-Fi network. That’s why the company is primarily targeting users who are in what it calls “Wi-Fi-rich environments” like college campuses and urban areas with a high density of mobile hotspots.

Cablevision has also in the past made a point of highlighting how big of a hit Wi-Fi already is with its customers. Each Cablevision internet household already has 2.88 devices accessing Wi-Fi on average, and customers have used Optimum Wi-Fi nearly one billion times during Q4 of 2014, consuming 19 petabytes of data, according to statistics shared by the company.

Cablevision isn’t the first company to use Wi-Fi as an alternative to traditional mobile networks. Low-cost mobile virtual network operator (MVNO) FreedomPop introduced a Wi-Fi-only service tier last year that promises access to 10 million hotspots for $5 a month. However, Cablevision does have a distinct advantage by operating its own network of hotspots, and it also has a lot bigger megaphone. Its new Freewheel service will be available to consumers nationwide, but Cablevision plans to heavily market it on its home turf.

That could quickly get interesting: Cablevision’s biggest competitor in its home market is [company]Verizon[/company], which has been using its FIOS broadband service to steal internet customers away from the cable company. With Freewheel, Cablevision is now attempting to turn the tables, and offer a combination of broadband internet, TV and mobile phone service of its own.

Ultimately, Freewheel could become a blueprint for other cable-led mobile initiatives. Comcast has been aggressively building out its own Wi-Fi network by also relying on a crowdsourced approach that turns customer’s Wi-Fi routers into Xfinity hotspots. And with mobile phone usage increasingly moving towards data services, we could possibly see a whole bunch of new players offering Wi-Fi-only or Wi-Fi-first mobile services soon.