For many, there’s no greater ripoff than their monthly wireless bill. Even if you go the prepaid route, you may end up paying for voice minutes and data that you never use.
Scratch Wireless believes there should be another option. After launching in October, the company is today opening up its “free” wireless service to everyone.
As I mentioned when it launched, there is of course a catch: After buying a $269 phone from the company (the two year-old Motorola Photon Q), you only get completely free service when connected to Wi-Fi networks. Otherwise, Scratch lets you text for free on Sprint’s cellular network, or pay small fees to get access to voice and data networks when away from Wi-Fi. (Twenty-four-hour data and voice passes will run you $2 each, which includes 30 minutes of calling time and 25MB of data. You can also get 30-day voice and data passes for $15 each, which grants you 250 minutes of talk time and 200MB of data.)
But even with the Wi-Fi restriction, Scratch could be a useful service to many. If you’re always surrounded by Wi-Fi networks (which most of us are), and don’t have much of a need for voice or data service when out and about, Scratch can erase your monthly cellular bill. And unlike prepaid networks, the company doesn’t force you to keep an active account by paying for service every few months.
After sending out a few test devices to early adopters, Scratch cofounder and CEO Alan Berrey tells me his initial assumptions on Wi-Fi-only access were proven correct. Wi-Fi voice calls made up 95 percent of the voice minutes used by those users, and 72 percent of texting also occurred over Wi-FI. 30 percent of its early users have paid for some kind of extra service (like mobile data), while 20 percent paid for mobile voice access.
Scratch could be a particularly good deal for light phone users and heavy texters. Berrey tells me that some users are texting over 1,000 times a month — likely teenagers, since they don’t need to worry about paying for those texts on the go.
While I was initially skeptical of yet another company promising free wireless service, Scratch’s model seems to be more than just fiction. Its service works as advertised, and its rates for additional services are reasonable. After testing one of Scratch’s phones for the past day, I found it nowhere near a premium Android experience, but it’s still a decent phone that caters to texters. (The Photon Q is one of the last Android phones to sport a decent hardware keyboard.)
Looking ahead, Berrey tells me the company is in negotiations with some Wi-Fi access point providers to offer service to its members. The company is also exploring ways to offer its software on people’s existing devices. Since that involves completely reflashing your phone’s Android installation, it’s going to be difficult for the company to make custom installations happen.
Scratch competes with other wireless outfits like FreedomPop, which offers a limited amount of free mobile data to users every month. Berrey notes that Scratch’s biggest advantage over competitors is its integrated service: Once you sign up, you get a real U.S. phone number for calls and texts, so you won’t have to juggle another app like Skype. Having a readily accessible U.S. number could also be useful for international travelers — Scratch lets you make calls on Wi-Fi anywhere in the world, just as easily as you would at home.
One way Scratch could get its service on more phones is by partnering with a company like Cyanogen, which has raised around $30 million in venture capital for its custom Android images. Scratch wouldn’t confirm that it was chatting with Cyanogen, but it definitely seems like it’s intrigued by the amount of industry validation Cyanogen has seen lately.
Naturally, Scratch is also considering newer handsets for its service. While it wouldn’t confirm what’s on the horizon, the company says it plans to offer a more high-end model soon (perhaps something like the Nexus 5 or Moto X), and a cheaper budget model eventually. Scratch sells its phones at a slight premium, so it makes a bit of money even if you don’t end up paying for any additional services.
Scratch Wireless is based in Cambridge, Mass., and has raised $5 million in funding from CommonAngels and its partners.
Like this story? Want to learn more? On April 14-15, our fourth annual VentureBeat Mobile Summit will tackle the eight biggest growth opportunities in mobile today. The invitation-only Summit will gather the top 180 executives at the scenic Cavallo Point Resort in Sausalito, Calif., to discuss issues like this. Request an invitation.