SAN FRANCISCO (Reuters) - Cablevision System Corp said on Monday it would launch in February a wireless Internet phone service to give users an alternative to pricier data plans from cellular companies such as AT&T and Verizon.
The "Freewheel" phone service, which runs on any WiFi connection, is an attempt by Cablevision to retain and potentially add subscribers at a time when cable companies are losing out to lower-priced, bundled TV and Internet services from telecom firms.
Cablevision said the phone service was the first of its kind to be launched by a cable company and aims to tap users seeking to download unlimited amounts of data on their mobile phones using WiFi, which is less expensive than a cellular connection.
Such services could pose a challenge to traditional telecom carriers. Currently, carrier Republic Wireless and Massachusetts-based startup Scratch Wireless offer users similar services that use WiFi to control data costs.
"There has been a dramatic shift in how consumers use their mobile devices: today, it's all about data, and WiFi is now preferred and clearly superior to cellular," Kristin Dolan, chief operating officer of Cablevision, said in the statement.
Cablevision, controlled by New York's Dolan family, has been investing in its "Optimum" WiFi network since 2007, setting up over 1.1 million WiFi hotspots or access points in New York, New Jersey and Connecticut.
Cablevision's WiFi phone service will be offered at $29.95 per month and $9.95 per month for subscribers of its "Optimum Online" service. It will be available exclusively on the Motorola Moto G smartphone that users will have to purchase, the company said.
The $180 Android phone will be sold to "Freewheel" users without a contract at a discounted price of $99.95, it added.
Reporting by Malathi Nayak