Scratch Wireless Introduces 'WiFi First' $99 Smartphone

Its Coolpad Arise phone lets users make calls and use data for free, as long as they are using a WiFi connection. Users don't have to pay for anything else.  

Scratch Wireless, Coolpad Arise, mobile carriers, WiFi calling, Sprint, T-Mobile

It's all the rage nowadays for mobile phone companies like T-Mobile and Sprint to allow customers to use their smartphones via WiFi connections to make and receive calls or search the Internet without having to use their monthly data allotments.

Now Scratch Wireless is taking the idea a step further with its new $99 Coolpad Arise Android smartphone, which lets users make unlimited calls and use unlimited amounts of data—as long as they connect through a WiFi network. The "WiFi First" idea, according to Scratch, is that users who have frequent access to WiFi can use a smartphone that doesn't require a service contract or result in a hefty bill each month. For those users, they can conceivably buy the phone for $99 and never have to spend another penny on service, the company says.

And so far, about two-thirds of Scratch's early pilot customers, who number under 10,000, are doing just that and only using their phones via WiFi, at no cost other than the cost of the phones, Jon Finegold, the vice president of marketing for Scratch, told eWEEK.

"We are a WiFi-first mobile operator," he said. "Our phones use WiFi as the primary connectivity and fall back to cellular if WiFi is not around." According to Scratch's statistics, current customers report that they usually have available WiFi some 84 percent of the time.

"Because of that, we saw the whole mobile industry as being backward," said Finegold. "People use smartphones mostly as data transfer devices today. And with Scratch, you can use a smartphone for free with completely unlimited talk, text and data on WiFi."

Texting is always free for users, whether they are texting via WiFi or through cellular networks.

Customers who need access to cellular networks from time to time can also purchase time and data at low rates on a pay-as-you-go basis if desired, he said. "That model works really well for a lot of people."

The company launched the Coolpad Arise and the accompanying WiFi services on May 19 to give consumers yet another choice in the mobile device and services wars.

"I think we'll really be a game-changer," said Finegold. "I think that we are on the cusp of being really disruptive."

Scratch partners with Sprint to provide 3G cellular service for customers who want to pay extra for those capabilities. Users can buy voice allotments for $1.99 for unlimited minutes over 24 hours, $6.99 for 100 minutes in 30 days or $14.99 for unlimited minutes in 30 days. Data passes sell for $1.99 for 24 hours of unlimited use, $14.99 for 500MB in 30 days or $24.99 for unlimited use for 30 days.

About one-third of Scratch users spend about $20 per month to buy minutes or data for times they are away from WiFi networks.

The average Scratch user, who tends to be in the 10- to 24-year-old range, tells Scratch that they save an average of $76 a month by using the company's phone and WiFi services, Finegold said. The company spent about three-and-a-half years developing the technology and concept and then invited potential users to participate in its pilot project starting in early 2014, said Finegold. The pilot users had to purchase an early-version phone for $269, but that device will not be compatible with the system now that is going live.

Though it started as an invitation-only project and now includes fewer than 10,000 users, the company sees large demand for its idea, he added. "Ultimately we believe that there are millions of subscribers out there who this will be a fit for."

Finegold said the company started with its younger user group because those were the people who initially embraced the idea. "Many of them are already on WiFi a lot of the day" in school, at home or in their communities. "As we expand and offer a broader range of devices, we will go after other users, too. We're now going after younger, value-focused consumers."

Scratch users are also able to use their device and its accompanying U.S. phone number over WiFi anywhere in world, making it great for travel as well, said Finegold.

The service fills a niche, he said. "I don't think that WiFi is going to take over 100 percent over cellular service. I just think it's useful."

The Coolpad Arise smartphone features a 4-inch touch-screen FWVGA display with 480-by-800 resolution, a dual-core 1.2GHz processor, 512MB of memory and 4GB of data storage, which can be expanded by installing a microSD card of up to 32GB. The Arise runs on the Android 4.4 KitKat operating system, giving users access to the full breadth of Google services, including the Google Play store, Google Maps and more.

In addition to built-in WiFi connectivity, the Coolpad Arise includes Bluetooth capabilities.

The Coolpad also includes a 2-megapixel rear camera that can also take videos, but it is lacking a front selfie camera. The smartphone includes a 1,600mAh battery that has a 240-hour standby rating.

The handset's manufacturer, Coolpad, is China's third largest smartphone maker and sells its products in many other markets around the world. A Coolpad Arise can be preordered through the Scratch Wireless Website with shipments and availability starting on June 10.