The no-contract plan requires customers to pay $199 for an Android-based LG Optimus smartphone, which includes the first month's service fee. It includes unlimited talk time, text messages, and data. However, it is "unlimited" in the mobile phone sense of the word. If you're using the service without a Wi-Fi connection and rack up a lot of cellular data usage--the company suggests that 550 minutes, 150 texts, and 300 MB of data would be close to the limit--you will receive a warning about being a bandwidth hog. Extreme resource usage, in other words, could get you kicked out.
Republic Wireless is a mobile network startup is based in Cary, N.C., and is owned by Bandwidth.com, a growing telecommunications provider, or CLEC. The company can provide such low rates because it expects most calls to be carried over Wi-Fi networks, in customers' homes and elsewhere. It requires customers to have access to at least one Wi-Fi network.
Calls get carried by Sprint's cellular network only when a Wi-Fi network isn't available. According to Republic Wireless, most people are around Wi-Fi networks 60% of the time. Whether those networks are accessible, not to mention secure, is another question entirely.
The company likens its model to the way that hybrid cars use electricity some of the time and a gasoline engine at other times.
While call clarity and network reliability can't really be assessed until the service has been up and running for a while, Republic Wireless says it has received a phenomenal response based on the price of its offering.
"Demand has blown us away--we've always talked about this as a movement, not just a product, and it's happening, for real," said Brian Dally, general manager of Republic Wireless, in an email. "We're also flattered. We have a lot to live up to now. We frankly didn't expect this kind of reception, which speaks to how acutely people feel the pain."
[ Find out about how telecom carriers have been forced to deal with "bill shock." ]
Dally says he can't predict how other carriers will respond but he believes that his company's attractively priced offering will push the industry in a direction that's better for consumers.
"We're inverting the status quo here," he said. "Wi-Fi networks should absolutely be the primary network, and cellular networks will become the back-up network when you are on-the-go. This drastically reduces the costs for consumers, but gives them the freedom to use their phone however they want. To be honest--cellular is scarce and very expensive, and it's going to be difficult to match a $19 per-month unlimited membership for network operators burdened with billions in investments that they've got to recover somehow."
Dally argues that Republic Wireless is helping to bring about the freedom of choice in wireless carriers that consumers have been asking for. "Now that we're moving the industry in that direction, we certainly expect others will have to move in this direction as well. We think that's good news for everyone. It has a democratizing effect on the market--which opens up opportunities for new innovation and more choice for consumers."
