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Scratch Wireless Drops Unlimited Data and Why You Shouldn't Be Surprised

Sprint MVNO Scratch Wireless has made a major change to the data portion of its service.  Scratch is a WiFi first service, users can make unlimited calls and send unlimited texts over WiFi. Scratch customers even get unlimited free Sprint network text messaging when they are away from WiFi. 

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
There are no changes to Scratch's voice bundles:
  • $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
I'm not the least bit surprised that Scratch Wireless is doing away with unlimited data. Truly unlimited mobile data is an impossibility, at least at a price most users would be willing to pay.

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


22 comments:

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  1. well, scratch that. lol

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  2. I'm wondering if the MVNO's have any way at all to pressure the mobile operators to lower their data prices. Maybe TracFone and siblings have some leverage since they use all 4 mobile operators, and can "punish" an operator if they raise rates unilaterally. For example, is that what happened two years ago when TracFone removed AT&T sim cards from their BYOD offerings? And did AT&T then react by cranking up their AIO/Cricket efforts? You can see that TracFone is in a far weaker position vis-a-vis AT&T now that AT&T has a low cost prepaid in their stable. If TracFone threatened to cut off AT&T today, AT&T might easily say, "Go ahead; most of your customers who were using our towers will just migrate to Cricket."

    Hopefully, when and if the MVNO's are squeezed out of viability, there will still be plenty of competition from the remaining carrier owned prepaids.

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    1. Competition from the remaining carrier owned prepaids??? now that's an oxymoron if I even seen one.........

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    2. Hey, Buddy... Who're you calling a "moron"? JK :-) ... I meant competition between the likes of mobile operator owned prepaids, like Boost (Sprint) and Cricket (AT&T). Seems like they are currently the most competitive... No?

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  3. Strange that they left the "Unlimited" language on their website on this page:

    http://www.scratchwireless.com/pad/s/unlimited-data-plans/

    Obviously leftover from when they were selling the Photon Q, but the heading is funny in light of the recent changes. It says:

    "An Unlimited Data, Talk and Text Plan? Too Good to Be True"

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  4. It seems that MVNO's would benefit as much as users if everyone used Onavo Extend.

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    Replies
    1. I'm using an iPhone 6+ on Cricket. I'd never heard of Onavo Extend, so looked it up. Have you had any problems using it?

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    2. The only "problem" I have found is that it has to be reauthorized after shutting down or rebooting. Doing it is extremely simple--3 taps is all it takes. Remembering to do it is another thing.

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  5. And yet it is surprising, since so many VNOs have been increasing their hi-speed allowances recently.

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  6. I've never heard of Scratch Wireless before.

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  7. Ultra Mobile is now available at 7-Eleven stores.

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    1. Another extremely limited area MVNO, I see. Apparently, using the smallest possible T-Mobile map, and not available at all outside of that map.

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    2. Ultra is using T-Mobile native network, no roaming. If you are in a major city or highway, they are as good as red and blue, in the boonies they are useless.

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  8. only some major cities and only some highways

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  9. Don't purchase a scratch phone!!! 2 months into a scratch account for our child's first phone and we get an email changing the plan. They sold us on free unlimited text when you buy the phone with an option to use voice at an upcharge daily or monthly rate. Our child is 10 and only text's me when he is leaving on his school bus to let me know what his status is. Since he does not use the phone, (only in case of E911) there is no reason to have a voice plan. Also they also advertise that with the text only feature, voice calls are free on established wifi accounts. They now want $9.99 a month for a voice plan with additional upcharges for texts. Clearly, Bait and switch... We are now out $79.00 for a phone, we clearly won't activate. We should of just got a family plan on our verizon account and got the phone for free. I smell a class action lawsuit....

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    Replies
    1. Got the same email and my first thought was bait and switch. I will be looking forward to that class action lawsuit. From their website: "We're never going to pull a bait-and-switch or pull the rug out from under you."

      Btw, the Coolpad Arise is listed as Out of Stock at the site. And with shipping, the cost was actually $99 for me.

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    2. Read your contract - they have a legal right to cancel or change your service plan. A greedy lawyer may attempt to gain class status for a lawsuit, but a judge still has to approve that. How will any class lawyers prove criminal intent? Even if they do, or Scratch decides it's cheaper to settle, your chances of getting any significant money after the lawyers get paid is very low. Maybe your phone can be flashed so that it works with another Sprint wholesale company, so you could get cheap service with RingPlus or the Real Mobile $20/year paygo plan.

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  10. I talked my elderly mom into getting this because she makes very few calls. She just got a letter in the mail saying they couldn't service her phone number (that she ported from a landline) and if she wants to keep her phone number she will have to purchase a new phone from another provider by Nov. 16 or they will assign a new random number to her phone. She just bought the phone in August for $99 and now she is out that money! What a rip off! Who knows what service they will change next...charge for wifi calling???? DON'T BUY A SCRATCH WIRELESS PHONE!

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  11. Have you tried contacting them to see if they will substitute a different phone for the one she just bought in August so she can keep her landline number?

    Dale

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  12. Scratch Wireless is either a blatantly dishonest company, deliberately defrauding consumers or they are incompetent. Either way, steer clear. I too was cheated out of free wi-fi phone service shortly after purchase.

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    Replies
    1. It's neither. The article explained pretty well why their business plan did not work out. You were not cheated out of anything; your agreement with Scratch allowed them to change their plans. Do they have to go out of business and strand all of their customers before you would consider them to be honest? Does every business plan have to work out perfectly before you think a company is competant?

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  13. Don't buy a a scratch phone!!! We have the same scenario as the anonymous Oct 30 2015, reviewer, and got the same plan changes. My wife and I said same exact thing, bait and switch, class action lawsuit etc. We drug this out for about 8 months to try to get our value but We just got an email stating Sprint is changing the fees they charge Scratch wireless so they can no longer support our plan. We should of also just stayed with our family plan with Verizon. Live and learn. I hope they go out of business.

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