MOBILESPACE—Hidden just beneath the exciting news that Google has confirmed plans to build out a nationwide wireless service which, the New York Times reported yesterday, "blends Wi-Fi and cellular networks together seamlessly," is the fact that Republic Wireless, the Bandwidth.com-owned service that launched in 2012 as a Sprint Corp. mobile virtual network operator, already offers "customers cheap unlimited voice, text and data services that uses WiFi as the primary network and cellular only as a backup."
In fact, Republic has for some time been anticipating the Google announcement, which its CEO David Morken believes is not only a good thing, but was also inevitable, "especially as voice-over WiFi becomes more prevalent," analyst Sarah Thomas reported him as saying in an article posted to lightreading.com last month.
According to Thomas, "In the past year, Republic has tripled its subscriber base without any marketing spend and achieved a churn rate of 1 percent per month, despite being contract-free."
The company offers four plans, she added. "WiFi only for $5 per month; WiFi plus cellular talk and text only at $10 per month; unlimited talk and text and 5GB of 3G data for $25 per month; or unlimited talk and text plus 5GB of 4G access for $40 per month."
More relevant to yesterday's announcement by Google, she adds, "What is most surprising—and helps Google and Cablevision Systems Corp's interest in WiFi services—is the fact that while only 5 percent of its customers select WiFi-only plans, 93 percent are only using WiFi for data, not 3G and LTE. Cellular is still important, but only as a backup."
That potential is precisely what Google wants to tap into, according to the Times' Brian Chen. "Google is experimenting with a hybrid approach that offers mobile voice and data services primarily through Wi-Fi signals," he wrote. "It would fall back on cell towers in areas where Wi-Fi is beyond reach, sources say. Industry insiders call this a “Wi-Fi first” approach.
"A person briefed on Google’s plans, who recently spoke on the condition of anonymity because the conversations were private, said the company wanted to make use of the fiber network it had installed in various cities to create an enormous network of Wi-Fi connections that phones could use to place calls and use apps over the Internet," he added. "In areas out of reach, Google’s network would switch over to cell towers leased by T-Mobile USA and Sprint, this person said."
Interestingly, in her article last month Thomas notes of the carrier wars, "[Republic CEO] Morken says that most of Republic's customers are coming from AT&T Inc. and Verizon Wireless, not other prepaid carriers, fellow WiFi-first companies like Scratch Wireless and FreedomPop, and not even Sprint, the network all three ride on. He attributes this to the fact that the delta of potential money saved is greatest between Republic and the big two versus a more affordable carrier like Sprint or T-Mobile. A desire to save money is the only common denominator he's seen amongst his customers."
If anything, Republic's experience bodes well for Google and any other contestants in this burgeoning field.
"Republic, like all of the cable companies and wireless operators, is also watching keenly to see what Google does, how Cablevision fares and what else comes next," explains Thomas. "WiFi is far from a perfect technology—it's not yet ubiquitous and the quality can vary tremendously, to name a few issues—but it's getting better every day. Yet, if anything, Republic Wireless's success has shown that WiFi-only can be done—something others would have laughed at in the past—which should be enough to give the wireless operators pause."
