What's not free with Scratch are voice and data using the Sprint network. Scratch sells one day and 30 day data and voice passes.
Until last week $1.99 would buy you 24 hours of unlimited data and $24.99 would provide unlimited data for 30 days.
500 MB for 30 days for $14.99 was also available, but unlimited data at up to LTE speeds for about $25 per month was the real deal. Unfortunately it's a deal that's no longer available. Scratch notified users last week that going forward the data packages are:
- $1.99 for 50 MB (was unlimited) good for 24 hours
- $14.99 for 500 MB (no change) good for 30 days
- $24.99 for 1 GB (was unlimited) good for 30 days
- $1.99 for unlimited minutes good for 24 hours
- $6.99 for 100 minutes good for 30 days
- $14.99 for unlimited minutes good for 30 days
Mobile operators, Sprint included, don't sell their MVNOs unlimited data. MVNOs buy data by the terrabyte and minutes and texts by the hundreds of thousands and try to create plans that will be profitable. If they offer unlimited minutes, texts or data, they are gambling that users won't use so much that the MVNO will lose money. That's risky, especially for data. When offered unlimited data, some users will treat mobile data as a substitute for cable or DSL broadband and use hundreds of gigabytes per month. That's not hard either, especially for those who have the meager technical skills needed to enable mobile hotspot on their phones. And why shouldn't they use hundreds of MBs, after all they paid for what was advertised as unlimited data.
I don't have any insider information but based on how much data MVNOs are offering at various price points I suspect that the mobile operators are charging MVNOs at least $2.50 but probably closer to $5 per GB. That means Scratch was in the hole for data costs alone with any $24.99/month customer that used more than 5 or 10 GBs. And that's just data, Scratch was also eating the cost of those unlimited texts plus all the other expenses of running an MVNO like staffing, rents, web hosting and software licenses for billing and other back end systems. On top of that, Scratch Wireless claims that 80% of it's customers don't use any cellular data or voice and are paying nothing for unlimited cellular and WiFi messaging and unlimited VOIP calling.
Scratch Wireless service requires a Scratch Wireless phone, BYOP is not supported. Currently the only available phone is the $99.99 Coolpad Arise, which doesn't support LTE. Scratch used to offer the LTE capable Motorola Photon Q. Hopefully LTE devices will return to Scratch Wireless soon.
Sources: FierceWireless, PhoneNews, HowardForums