Republic Wireless hopes to shake up industry with $19 'unlimited' VoIP, data service

Republic Wireless plans to challenge the operator-dominated status quo with its $19 per month hybrid VoIP/cellular service, providing unlimited calling, texting and data for customers with specialized Android hardware. The service, which is launching today via Republic's site, will try and harness Wi-Fi and make it the dominant form of voice data communication, though it also takes advantage of Sprint Nextel's (NYSE:S) 3G CDMA EV-DO network.

Republic, a division Cary, N.C.-based VoIP and bandwidth service provider, is inviting people to become a member of a community, according to Brian Dally, general manager of Republic Wireless. In an interview with FierceWireless, he said that customers will pay $199 up front for their first month of service as well as the specialized phone that comes with the service, an LG Optimus smartphone running version 2.3, or Gingerbread, of Google's (NASDAQ:GOOG) Android platform (Dally said more phone options will be coming, but declined to say what those might be or when they will be available). If customers want to continue with the no-contract service, they can pay $19 a month plus taxes after that, but can cancel the service at any time without any early termination fee.

"People who decide to join us are in for a very different experience than what they're used to from an incumbent mobile operator," he said. The service bundles Wi-Fi calling with cellular access and will work on the phone right out of the box, Dally said.

The service uses a custom-built standard which hands off between Wi-Fi and cellular networks, Dally said. is a nationwide, facilities-based CLEC with 24 million numbers issued. "We're deep into VoIP as a company and we're leveraging our expertise to do it," Dally said.

The service will automatically search for a Wi-Fi hotspot to connect to, and that is deliberate Dally said since the company is trying to build a community of people who prefer Wi-Fi. "The cellular component of this is always going to be important," he said. "Today we think for Wi-Fi as an offload. We think the Wi-Fi network is primary."

When the service can't find Wi-Fi coverage, it will fall back to cellular coverage on Sprint's network. Dally said Republic went with Sprint as its wholesale provider because of the emphasis Sprint puts on wholesale. "They are very thoughtful about how they partner and how they enable a wholesale partner to go to market," he said. "They don't just tolerate wholesale as a business, they actively encourage it and enable it."

There is a catch though in terms of users' reliance on cellular coverage in the form of a fair-use policy. Republic said that users who stay within the bounds of 550 minutes of calls, 150 texts and 300 MB of data on cellular coverage per month should be fine, and that only the heaviest and most frequent abusers of the policy will be penalized, meaning that the occasional heavy cellular data usage will not result in a data cap or throttling. Moreover, Republic contends that users' 3G usage will be monitored online, and that cellular voice, texting and data will be balanced against one another, so if a customer decides to use fewer voice minutes over cellular, they will have access to more data and texts, for example.

Dally declined to comment on what other carriers Republic might partner with for wholesale access or what the status is of those negotiations. "We know that there are other great networks out there," he said. "Different networks have different strengths and weaknesses. We are eager to do business in whatever way helps this movement to go forward. Our movement is about inverting a status quo."

Republic wants to make the experience interactive for its users and will give them a "pulse for how they're doing on their own and relative to the rest of the community." Every week each member will receive an email report card, or status update of sorts. The report card will show the users how much time they are spending on Wi-Fi versus cellular networks, what their average time has been on each, how much voice and data usage they have on each network type and how their usage compares to other users.

"If people don't care and all they're in it for is the price point, this can't succeed," Dally said, while acknowledging that the service is not meant for everyone. "If you are a truck driver on the road all day, it won't work for you."

To start with, Republic will conduct a beta run of the service, and will allow more people to join over time. Dally declined to comment on how much Republic will spend to market the service, but said it will primarily be an online marketing model. "People like freedom and I think freedom spreads without a lot of marketing, quite frankly," he said.

Dally said the main challenges for the company right now are gaining momentum and the fact that there is only one smartphone available for customers who want the service. However, he said the aim of Republic is shake up the traditional, carrier-based wireless business model. "The technology is ready. The industry ecosystem is going to be ready and it is going to be brought kicking and screaming into this new reality."

For more:
- see this release
- see this GigaOM post
- see this PC Magazine article
- see this The Verge article

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Article updated Nov. 8 to clarify that Republic Wireless' service does not use the VCC standard.