Startup Republic Wireless expects to offer unlimited cell phone plans for $19 per month, providing a cheaper alternative to more expensive plans for budget-conscious customers.
Republic, a division of enterprise VoIP provider, Broadband.com, will launch its hybrid cellular voice and VoIP service on November 8 and offer unlimited talk, text and data for a low monthly fee, with no contract required and no termination fees.
The mobile plan is also promoted as truly “unlimited” with no bandwidth caps. Republic Wireless promises a "hybrid calling" service of VoIP and 3G that automatically switches between Wi-Fi and cellular. In other words, when you're near a Wi-Fi connection, your phone will automatically place VoIP calls, and when you're out of range, your phone will fall back on a 3G network – hassle-free.
According to Republic execs, it has acquired minutes from Sprint and is working on similar deals with other carriers. Republic also said “it has built its own "soup-to-nuts solution to offer the hybrid calling functionality."
By using a technology called Unlicensed Mobile Access, or UMA. UMA works by connecting to public, open WiFi networks and using VoIP, and when that is not available, switching to GSM networks. Republic keeps its costs down by not investing in huge data networks and, well, relies on existing WiFi infrastructure already in place.
However, UMA is not brand new: the standards for it have been around since at least 2004. But wireless networks had not penetrated as far as they have now, when everybody and their mom has a wireless router plugged into their modem. Also, needless to say, cell phone providers are not terribly eager to have a technology around that makes their network obsolete.
Users are expected to buy a custom Android phone to use Republic’s plan. Pertinent details about the required handset and its cost have not been released yet. The limited selection may make Republic less attractive to customers who want the latest feature-rich smartphones, but they may capture a niche among consumers willing to trade gadgets for thrift.
Carriers typically subsidize handset costs, providing huge discounts for customers who sign a two-year contract. Since it does not require a contract, Republic may have to juggle handset costs against what it charges for monthly usage, and may risk high customer churn, which can drive up costs as well.
Republic’s low-cost unlimited plans may still be attractive enough to outweigh customers’ desire for handset choice. For those looking to save money and who aren’t gadget-conscious, Republic Wireless may provide a viable alternative.