& cplSiteName &

Why WiFi-First Works for Wireless

Sarah Thomas
12/30/2013
100%
0%

In the US, mobile data prices are among the most expensive in the world, and WiFi is among the most prevalent. At the intersection of these two trends is a number of new startups hoping to capitalize on both.

Republic Wireless kick-started the movement of offering a WiFi-first mobile service when it launched in 2012, and its success thus far has inspired a number of new mobile virtual network operators (MVNOs) to go a similar route. TextNow and Scratch Wireless are two other new launches, both of which are offering "cellular offload" to Sprint Corp. (NYSE: S)'s network. (See Carrier WiFi: The Key People, Top 10 Carrier WiFi Movers & Shakers, and Touring Sprint's Well Oiled MVNO Factory.)

Scratch Wireless, launched in October, only uses the WiFi that's readily available to consumers today, such as in their home and office, but Republic Wireless also pulls in Devicescape Software Inc. 's network of millions of hotspots. Devicescape CMO David Nowicki says that Republic is validating the WiFi-first, cellular backup model, and he expects to see many more launches in the same vein.

"Republic is one of those companies that not only all the operators in the US talk about at conferences, but all the European operators are talking about them as well," he says. "You'll see more of that coming."

The reason why is simple: As analyst Whitey Bluestein explains it, the chances are if you're a wireless user in the US, you're already defaulting to WiFi to keep costs down. Why not use it exclusively, or at least primarily? These startups are banking on that behavior and offering consumers a service that runs primarily on WiFi for low to no cost, only going up when the user is out of range and on the cellular network.

The MVNO's motives aren't entirely pure, of course. The wholesale prices they pay for mobile broadband are not exactly cheap, especially if they are paying by the megabyte. It behooves them to keep their customers on WiFi, just as it benefits their customers to use the free network.

"The viability of Republic Wireless and others like them comes down to the ratio of data usage on their WiFi networks (home and office) versus on the MNO's network," Bluestein writes in an email to Light Reading. For Republic, it's about 70% WiFi to 30% cellular. That's how it can maintain its business model, Bluestein says. "They're just passing along the savings of WiFi, and building a business model around it."

Scratching the surface of WiFi
Cellular fallback is an option for Scratch Wireless, too, but it's encouraging its customers to stick entirely to WiFi in its bid to offer the first totally free wireless service. The carrier sells the $269 Motorola Photon Q and then there are no other costs -- provided the user stays on WiFi. It's a vastly different model than those MVNOs that are counting on social sharing or ad viewing in exchange for minutes. It's simply free.

For those that do need to go on cellular, Sprint's network is available in day or month passes, but the amounts of data offered are pretty paltry. For example, you can get 25 MB for $1.99 per day, plus $1.99 for an accompanying voice plan, or 200MB of monthly data for $15.99 plus $15.99 for 250 minutes of cellular voice for one month.

According to Scratch's VP of Marketing Jon Finegold, the user base its targeting is young people -- age 24 down to 11 -- that use WiFi a large percent of the time and love the idea of a cell phone, but either don't have one yet or can't lay out $100 per month for the life of the contract. They also tend to use data and text much more than voice, even though Finegold says Scratch's VoIP quality can be even better than on cellular.

Right now, less than two months after its launch, the bulk of Scratch's revenue is coming from device sales, but CEO and co-founder Alan Berrey says it also makes money on cellular usage, as well as "the monetization that goes on in the cellular ecosystem already" through things like browser page loads, app downloads, existing ads, and accessory sales.

"We built the company not to be a little cheaper, but to be free," Berrey says. "We stuck our flag in free and will live in die in free."

The handoff issue
Both Scratch and Republic have had to tweak their service to make it work in a blended WiFi and cellular world. Berrey says that Scratch spent a lot of time and energy in modifying the Android operating system on the Moto Photon Q so that WiFi would run identically as it did on cellular with the same number on both. But, for Scratch, if a customer moves to cellular when chatting on the phone, the call will drop. Finegold claims this isn't an impediment for its customers, since the bar for voice quality has been set so low.

"We didnít want to make it automatic," Finegold says. "That is another pain point in the cellular industry: not only is it crazy expensive to have a smartphone plan, but you get charged for things you werenít expecting. We wanted to address that as well."

For Republic, which is pitching more of a WiFi and cellular-combined service, handoff was a priority. The company spent ample time and filed for several patents to improve its handoff process, which it admits was unacceptable in the first iteration of the service. On the Moto X, its latest LTE device, Jim Mulcahy, EVP and general manager of Republic, said they fixed four things: device quality, call quality, MMS support, and voice handoff. (See Republic Wireless Revamps Its WiFi Handoff.)

Handoff was the most tricky. Mulcahy says that existing standards for voice weren't up to snuff yet, plus Sprint operates a CDMA network, so UMA handoff wasn't available. The problem they ran into was that unlicensed spectrum is unpredictable and can be thrown off if the user walks behind a microwave, for example.

So, Mulcahy's team moved the handover to the cloud so that when a call is made, it sits on a server. This allowed them to relax the engineering constraints on how quickly the call had to be handed off. He says it introduced some latency, but Republic's customers haven't noticed or haven't cared.

"One thing that makes Republic so powerful is you donít have to think about it," Mulcahy says. "It's very important you hit file, hit send, and it just works. I donít want to think about it because if I do, it creates friction and isn't worth the money."

It's still early days for these startups, but as WiFi gets more attention from operators, vendors, and third parties next year, the hope is that their businesses will continue to get stronger. Will they unseat the tier-one wireless operators? Probably not, but that's not necessarily their goal. Even a niche play is good business in the crowded US market, and with increasing data prices, that niche should continue to grow.

"Regardless of your service provider -- MNO or MVNO -- chances are if you have a smartphone, you're using WiFi and thereby keeping cost down," Bluestein says. "The quality and availability of WiFi is not only a viable option but I suspect, the more mobile data people use, the more they're using or should be using WiFi."

— Sarah Reedy, Senior Editor, Light Reading

(10)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
buzzkill2000
50%
50%
buzzkill2000,
User Rank: Light Beer
10/18/2014 | 8:56:17 AM
why don't Republic Wireless do BYOD
Why do alternative carriers like Repbulic or Scratch limit you to one or two smartphones ?

Why not do BYOD ?

They'd get lot more subs if they did the iPhone.

iOS 8 now supports native VoWi-Fi with its "dialler" .. so iPhones and iPAD air 2's can now be programmed to connect to Republic's VoIP (IMS) back end . 
walliby
50%
50%
walliby,
User Rank: Light Beer
1/13/2014 | 8:27:17 PM
Happy customer
I switched from ATT a couple months ago and couldnt be happier. Republic wireless has a great phone, great price, great service. Make the switch and use the below referral code to get $19 off!

http://referrals.republicwireless.com/a/clk/1tktLx
ClausHetting
50%
50%
ClausHetting,
User Rank: Light Beer
1/5/2014 | 3:45:00 PM
Re: HotSpot2 / Passpoint is another tech to watch
I think there are two parts of to the story:

Hotspot 2.0 will really be a game-changer for the telecoms industry if enough players (like MSOs, etc.) can get together to build the right footprint size. There are also many other technical ways to aggregate the Wi-Fi networks there are already there, including the 'free' hotspots, etc. If this part of the industry can find a way to work together (around Hotspot 2.0) then the sky's the limit for how much mobile traffic such a super-Wi-Fi-network could take over. This is quite a real threat to the established mobile industry. Add to this the fact that huge numbers of new Wi-Fi access points are being added every day. 

The second part of to the story is that 'seamless' access to Wi-Fi (meaning something akin to cellular services) is achievable in many other ways than Hotspot 2.0. It can be done relatlvely easliy using apps and centralised forms of aggregation. But 'seamless also comes in many forms. The most complex is having no service disruption for e.g. VoiP, but many applications are increasingly robust against dropping the session. In any case, 'real mobility' is often not needed at all, because people tend to stand still when consuming data.

For this and a lot more - come to the Wi-Fi Offload Summit this month in Frankfurt! :-)
scottbarstow
50%
50%
scottbarstow,
User Rank: Light Beer
12/31/2013 | 9:40:00 AM
Re: HotSpot2 / Passpoint is another tech to watch
Yes, saw Boingo on there as well as Ruckus Wireless who are doing some great things in HS 2.  

Remains to be seen when / if we can get access points to do the kind of seamless handoff that we for the most part get in the cellular world.
scottbarstow
50%
50%
scottbarstow,
User Rank: Light Beer
12/31/2013 | 9:40:00 AM
Re: HotSpot2 / Passpoint is another tech to watch
Yes, saw Boingo on there as well as Ruckus Wireless who are doing some great things in HS 2.  

Remains to be seen when / if we can get access points to do the kind of seamless handoff that we for the most part get in the cellular world.
Sarah Thomas
50%
50%
Sarah Thomas,
User Rank: Blogger
12/30/2013 | 5:51:27 PM
Re: HotSpot2 / Passpoint is another tech to watch
Thanks for the feedback, Scott. I agree on the potential for Hotspot 2.0. That's why a few of the movers and shakers, like Derek from Boingo, made our list. I'll be curious to see how operator tests are going at O'Hare where they are doing the first really big testbed. Having ubiquitious WiFi outdoors AND seamless handoff and authentication would be a game changer.
scottbarstow
50%
50%
scottbarstow,
User Rank: Light Beer
12/30/2013 | 5:16:03 PM
HotSpot2 / Passpoint is another tech to watch
I have enjoyed your series of articles on the movers and shakers in Wireless the last few days / weeks.  In the interest of full disclosure, I work for Bandwidth, the parent company of Republic Wireless.

As we begin to see massive deployments by municipalities for Wifi (New York, Charlotte, LA) by both incumbent carriers and the cable companies, your experience of walking down the street and being on Wifi will start to become a reality.  With the advent of Hotspot2, we will begin to see roaming consortiums for WiFi just as we do for cellular, and your HotSpot2 credentials will push the negotiation for onboarding you onto various networks down to the device instead of you having to opt in to all of these disparate networks as a user.

While we are a ways from massive HotSpot 2 adoption, we are seeing the early, small waves right now.  I believe 2014 will be a year where we begin to understand what this new protocol represents for Wifi as a technology.

 
SteveC10101
50%
50%
SteveC10101,
User Rank: Light Beer
12/30/2013 | 11:56:01 AM
Re: Republic Wireless ROCKS
The Defy Beta test was rough I heard and a lot of people were soured on Republic because of that phone. Plus the transfer from WiFi to Sprint Cell would cause a lot of dropped calls. That's not the case anymore. I can't tell a bit of difference between the service that I had with Verizon and Republic. I was very skeptical but all of the info that I had found seemed to be pretty positive with the exception of the beta users.

The $299 price for the Moto X with Republic is incredible. I couldn't find anything close to it with the exception of having to sign a two year contract. Republic can't be making much on that phone. They are banking on the fact that people will try and love the service. I sure do. Thanks for your review! Happy Holidays!
Sarah Thomas
100%
0%
Sarah Thomas,
User Rank: Blogger
12/30/2013 | 11:36:51 AM
Re: Republic Wireless ROCKS
Thanks for the feedback, Steve. Good to hear the service works much better on the Moto X. I think it's interesting they also offer a 3G or 4G plan, so not necessarily both. I'll be curious to hear how many people choose each once (or if) they release those stats.
SteveC10101
100%
0%
SteveC10101,
User Rank: Light Beer
12/30/2013 | 10:56:05 AM
Republic Wireless ROCKS
I switched to Republic Wireless a few months back from Verizon. They were killing me with the monthly charges. Around $120 a month. Verizon does have the best 4G coverage. I won't deny that. I got the Republic plan for $25 a month. Unlimited calls, text and data with 3G. I dont have the 4G on my plan. It takes a few seconds longer for the internet to load compared to Verizon. But for $100 a month savings its well worth it. If you get the 4G with Republic remember you might not have use of it except in large cities. Im completely happy with the plan I have. I have no dropped calls. The switch from wifi to Sprint 3G is seamless. Those commercials for Verizon that show the map show the 4G map coverage only and 3G is pretty much everywhere so their ads are really misleading. It works great. Get the Moto X phone and not the Defy (it sucks). The Moto X rocks. Yes, you will have to pay $299 for the phone upfront but it pays for itself in a few months. Do the math and figure out your yearly cost compared with your current plan. Even if you have to pay an early termination fee it will save you money over the next year or two. I have a link that you can use to save $19 for the first month. Yes, it helps me with my bill too when you do. I won't lie. For Christmas bonus my boss decided to let most of us go and I am unemployed. If you don't like Republic, there is no contract. Just switch back. It is a great company.

 

Here is the link. Cut and paste if it needed. Thanks!!

 

http://referrals.republicwireless.com/a/clk/1ymPvN

 

 
Educational Resources
sponsor supplied content
Educational Resources Archive
Light Readingís Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
LIVE NOW!
Friday, December 2, 1:00PM EST
The SDN Approach to IP & Optical Integration
Sterling Perrin, Senior Analyst, Heavy Reading
UPCOMING COURSE SCHEDULE
Friday, December 2, 1:00PM EST
The SDN Approach to IP & Optical Integration
Sterling Perrin, Senior Analyst, Heavy Reading
in association with:
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
Women in Comms Introduction Videos
Korn Ferry Consultant: How to Find, Cultivate & Be the Best Talent

11|30|16   |   4:10   |   (1) comment


Erin Callaghan, a managing consultant for Korn Ferry Futurestep, shares strategies for companies to improve how they recruit and for women to ensure they don't get lost in the pipeline.
LRTV Custom TV
We Can Make the World More Sustainable

11|29|16   |     |   (0) comments


GeSI is a global e-Sustainability Initiative organization bringing together 40 big multinational companies around the world. According to GeSI's report, information and communication technology can make the world more sustainable. Luis Neves, chairman of GeSI, shared with us his opinion at Ultra-broadband Forum (UBBF2016).
LRTV Custom TV
Finding a New Way to Engage Customers & Drive Revenue

11|29|16   |     |   (0) comments


Mobile revenues are declining. Digicel, a player in the Caribbean telecommunications/entertainment space, has found a new way to engage customers and drive revenue. John Quinn, CTO of Digicel, shared with us its story at Ultra-broadband Forum (UBBF2016)
LRTV Custom TV
Do You Really Need Gigabit Infrastructure?

11|29|16   |     |   (0) comments


Altibox is the biggest fiber-to-the-home (FTTH) player and the largest provider of video and TV in Norway. They started out with zero customers in 2002. Now they have close to half a million households and companies attached to their FTTH business. Nils Arne, CEO of Altibox shared with us their story and insight on 5G at Ultra-broadband Forum (UBBF2016).
LRTV Custom TV
BTís Openreach Strategy & Its Updates in 2016

11|29|16   |     |   (0) comments


A lot of developments at Openreach this year in terms of strategy and planned investments. Peter Bell, CIO of Openreach BT, shared with us the updates of Openreach at Ultra-broadband Forum (UBBF2016).
LRTV Custom TV
ITU: The Broadband Is Our Future

11|29|16   |     |   (0) comments


At Ultra-broadband Forum, Houlin Zhao, Secretary General of ITU, discussed how important it is for countries, companies and everybody to be working together to help to build the broadband and digital economies (UBBF2016).
LRTV Custom TV
Tackling 5G in Dallas

11|28|16   |     |   (0) comments


Here are our highlights of the 5G North America show in Dallas, Texas with Light Reading's Dan Jones.
LRTV Interviews
Cox Prepping for Virtualization Trials

11|14|16   |     |   (0) comments


In this video interview, Cox's Jeff Finkelstein discusses MSO's plans to test managed business services in early 2017 and tackle Distributed Access Architectures.
LRTV Custom TV
Drivers & Potential of NGP

11|11|16   |     |   (0) comments


ETSI has created an Industry Specification Group to work on Next Generation Protocols (NGP ISG), looking at evolving communications and networking protocols to provide the scale, security, mobility and ease of deployment required for the connected society of the 21st century. The NGP ISG will identify the requirements for next generation protocols and network ...
LRTV Custom TV
Huawei IP 2020 for Future Networks

11|11|16   |     |   (0) comments


Future Networks should satisfy many requirements such as high throughput, extremely low latency, flexible mobility, intrinsic security, networking automation, and so forth. The Chief Architect of Huawei Future Networks addresses a holistic solution, i.e., IP 2020, to achieve these requirements for various future life scenarios (e.g., autonomous driving, tactile ...
LRTV Custom TV
Digital Object Architecture

11|11|16   |     |   (0) comments


Digital Object Architecture provides a basic information infrastructure that can facilitate interoperability between or among different systems, processes, and other information resources, including different identity management systems. Digital objects are networked objects that are named by digital object identifiers and instantiated by an infrastructure service ...
LRTV Custom TV
BT's Openreach Has High Hopes for Long-Reach VDSL

11|11|16   |   06:04   |   (0) comments


Peter Bell, Network Portfolio CIO at BT's access business Openreach, talks about the operator's trial of a new broadband access technology called Long Reach VDSL.
Upcoming Live Events
December 6-8, 2016, The Westin Excelsior, Rome
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
AT&T Debuts DirecTV Now on New Video Platform
Mari Silbey, Senior Editor, Cable/Video, 11/28/2016
Apple Seeds 5G? Seeks 'Multi-Gigabit' Chip Designer
Dan Jones, Mobile Editor, 11/30/2016
Altice Plans FTTH for Entire US Footprint
Iain Morris, News Editor, 11/30/2016
Altice FTTH Bill Could Hit Almost $9.6B in US
Iain Morris, News Editor, 12/1/2016
Samsung Bows to Investors, Considers Revamp
Iain Morris, News Editor, 11/29/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Live Digital Audio

Even when there's a strong pipeline of female talent in the comms industry, it tends to leak all the way to the top. McKinsey & Company says women experience pipeline leakage at three primary points: being unable to enter, being stuck in the middle or being locked out of the top. Each pipeline pain point presents its own challenges, but also opportunities to stop the leak. Wireless operator Sprint is making a conscious effort to improve its own pipeline from new recruits to the C-suite, and it wants the rest of the industry to do the same. In this Women in Comms radio show, WiC Board Member and Sprint Vice President of Enterprise Sales Nelly Pitocco will give us her take on the industry's pipeline challenges. Pitocco, who joined Sprint in May and has spent 20 years in the comms industry, will also offer solutions, share how Sprint is tackling the challenge within its own organization and take your questions live on air.