Yahoo Finance Crypto Startup Nova Labs is Betting on $5 Mobile Phone Plans
(Bloomberg) -- Nova Labs Inc., a blockchain startup building what it calls a “decentralized wireless network”, said it’s offering a phone plan that costs $5 a month for unlimited text, talk and data. The plan will initially only be available for Miami residents or people who receive an invite to access the product, Nova Labs said in a statement on Tuesday. The startup was founded in 2013 with a focus on the “internet of things” with efforts to develop a decentralized wireless network for devices like pet-tracking collars and environmental sensors. Nova Labs pivoted to crypto in 2018, introducing rewards to users in the form of branded tokens. The company, which changed its name from Helium Inc., has previously come under fire for saying Salesforce Inc. and electric scooter company Lime were using its wireless network services when they were not. In 2022, Nova Labs raised $200 million at a $1.2 billion valuation from investors led by Tiger Global Management and Andreessen Horowitz and has raised more than $250 million from venture capital firms to date, according to data from PitchBook.Its latest offering will be powered by 5G hotspots owned by individuals and businesses. People who sign up will be able to connect to the hotspots with mobile devices, including iPhones and Androids, using the Helium Network. The company says there are more than 7,000 hotspots throughout the US.The telecom industry has struggled with customer service issues and pricing wars, allowing for competitors to step in and sell unlimited plans that cost $20 a month, which is less than half the average cost of those offered offered by major national networks—T-Mobile, for example, offers a $40-a-month unlimited plan. Still, these plans have had trouble gaining traction. “This is a completely different economic model for building wireless networks,” Nova Labs Chief Executive Officer Amir Haleem said. “There’s generally this feeling of discontent with telecom companies, whether it’s home broadband, or whether it’s cell phones.”
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With the Helium Network, homeowners and businesses can purchase the Helium hotspots for prices ranging from about $1,500 to $7,000, Haleem said. Nova Labs will provide the hotspot owners with 50 cents worth of crypto tokens for each gigabyte of data their hotspots provide to customers. Nova Labs isn’t alone in attempting to combine telecommunications with one or more elements of crypto and the blockchain. In 2018, a company called Sirin Labs developed a blockchain smartphone that is still available for sale and explored a partnership with Huawei Technologies Ltd. that never came to fruition. Solana Labs, a blockchain developer that also has a partnership with Nova Labs, introduced a mobile phone in May, and last week slashed the price of the device to $599 from $1,000.Nova says that when phones with the Helium Mobile plan are out of range of a hotspot, they’ll switch to the wireless network managed by T-Mobile, the second-largest US carrier. Nova partnered with T-Mobile last year to launch what it described as “a crypto-powered mobile service.” The token associated with that launch was trading at $0.00032469 on Tuesday with 24-hour volumes of less than $75,000, according to CoinGecko data.
Even though the Helium Network provides better “economics” to customers than T-Mobile, according to Haleem, its wireless services partner is still essential. “We’re not deluding ourselves into thinking that the network is usable at the moment entirely — it’s still too small and too spotty, and too patchy,” Haleem said.
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