& 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 didn’t 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 weren’t 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 don’t have to think about it," Mulcahy says. "It's very important you hit file, hit send, and it just works. I don’t 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

 

 
From The Founder
Kicking off BCE 2017, Light Reading founder Steve Saunders lays blame for NFV's slow ramp-up and urges telecom to return to old-fashioned standards building and interoperability.
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.
LRTV Interviews
Masergy: It's Time for SD-WAN Options

6|28|17   |   03:09   |   (0) comments


Paul Ruelas, director of network products for Masergy, explains how adding SD-WAN has changed the service mix for his company's customers. In some cases, the change is incremental, enabling more granular customer control. Masergy's newest version, SD-WAN Go, gives up some of those controls for a streamlined version targeting mid-sized customers with the most ...
Women in Comms Introduction Videos
Intel Ushers in the Revolutionary 5G Era

6|28|17   |   5:00   |   (1) comment


5G will bring job opportunities for women in telco and IT, as well as a whole new era of communications for consumers and industries of all kinds, says Caroline Chan, vice president and general manager of the 5G Infrastructure Division at Intel.
LRTV Custom TV
VeEX at ANGA COM

6|27|17   |     |   (0) comments


At ANGA COM 2017, Cyrille Morelle, president and CEO of VeEX, updates Alan Breznick with VeEX's new products and technology. This includes VeSion cloud-based platform for network monitoring, AT2500-3G advanced spectrum analyzer and MTTplus-900 WiFi Air Expert module. He also comments on DOCSIS 3.1 deployment and Remote PHY technology.
LRTV Custom TV
The Overall Objective Is to Win the Game

6|26|17   |     |   (0) comments


SCTE•ISBE's Chris Bastian discusses Energy 2020's success to date and the importance of a flexible approach that allows for changes in specific strategies in order to reach significant milestones.
LRTV Interviews
CenturyLink: Let's Get Past SD-WAN Hype

6|23|17   |   04:02   |   (0) comments


Technology becomes a "shiny object" unless it's properly focused on solving business needs for enterprise customers, says Bill Grubbs, network solutions architect for CenturyLink. He explains to Light Reading why SD-WAN deployments have to be tailored to specific needs – and more.
Women in Comms Introduction Videos
Infinera's Sales Director Paints Tech's Big Picture

6|21|17   |   4:14   |   (1) comment


Shannon Williams, Infinera's director of sales, shares how she achieves work's many balancing acts -- between her role and the broader company, today and tomorrow's tech and more.
LRTV Custom TV
SD-WAN Innovation & Trends

6|20|17   |     |   (0) comments


Versa CEO Kelly Ahuja discusses with Carol Wilson the current status and trends in the SD-WAN market, Versa's innovation around building a software platform with broad contextualization, and the advantages that startups can bring to the SD-WAN market.
LRTV Interviews
Ovum's Dario Talmesio on 5G in Europe

6|20|17   |   02:16   |   (0) comments


At 5G World 2017, Dario Talmesio, principal analyst and practice leader on Ovum's fixed and mobile telecoms European team, explains the emerging trends amongst European operators as they prepare for 5G.
LRTV Custom TV
Putting Power on a Pedestal

6|19|17   |     |   (0) comments


ARRIS's John Ulm says a major accomplishment of SCTE•ISBE's Energy 2020 program is increased focus on power cost and consumption, including inclusion of energy requirements in operators' RFPs and RFIs.
LRTV Custom TV
Gigabit Access: The Last-Mile Pipe for All Future Services

6|19|17   |     |   (0) comments


A Gigabit access platform being deployed today must be able to deliver all types of services to an increasing number of devices. A non-blocking architecture is necessary to support the ever-increasing growth in bandwidth demand. The Huawei Gigabit access solution is based on a distributed design that is fully scalable to deliver a unprecedented performance.
LRTV Custom TV
Key Factors to Successfully Deploy an SD-WAN Service

6|19|17   |     |   (0) comments


As service providers transition their SD-WAN solution from trials and limited deployments into production at large scale, there are important considerations to successfully operationalize these solutions and realize their full potential, without adding complexity, introducing uncertainty or disrupting current business operations. Sunil Khandekar, CEO and Founder ...
LRTV Custom TV
IoT Solutions: Rational Exuberance

6|19|17   |     |   (0) comments


IoT solutions are morphing from hype into viable business opportunities. Huawei has the platform and ecosystem support to help carriers successfully address new business opportunities in the IoT space.
Upcoming Live Events
October 18, 2017, Colorado Convention Center - Denver, CO
November 1, 2017, The Montcalm Marble Arch
November 1, 2017, The Montcalm Marble Arch
November 2, 2017, 8 Northumberland Avenue, London, UK
November 30, 2017, The Westin Times Square
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
No Imagination: UK Chip Biz Goes Up for Sale
Iain Morris, News Editor, 6/22/2017
Does AT&T Deserve Time Warner?
Mari Silbey, Senior Editor, Cable/Video, 6/23/2017
Hulu Is Greatest Threat to Pay-TV Providers – Study
Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation, 6/27/2017
Calix: Russo's Not-So-Overnight Success?
Carol Wilson, Editor-at-large, 6/28/2017
Verizon Takes 'One Fiber' to More Cities
Mari Silbey, Senior Editor, Cable/Video, 6/22/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Following a recent board meeting, the New IP Agency (NIA) has a new strategy to help accelerate the adoption of NFV capabilities, explains the Agency's Founder and Secretary, Steve Saunders.
One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
Animals with Phones
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.