Republic Welcomes More WiFi-First Action
There's at least one company that isn't the least bit surprised to hear the rumors of a WiFi-heavy Google mobile service and WiFi-only Cablevision launch, and that's Republic Wireless, the startup that pioneered the concept of WiFi as a viable cellular alternative.
Bandwidth.com -owned Republic Wireless launched in 2012 as a Sprint Corp. (NYSE: S) mobile virtual network operator (MVNO), offering customers cheap unlimited voice, text and data services that uses WiFi as the primary network and cellular only as a backup. The company has four plans: 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. (See Startup Taps Devicescape for Wi-Fi-First Network.)
In the past year, Republic has tripled its subscriber base without any marketing spend and achieved a churn rate of 1% per month, despite being contract-free. What is most surprising -- and helps Google (Nasdaq: GOOG) and Cablevision Systems Corp. (NYSE: CVC)'s interest in WiFi services -- is the fact that while only 5% of its customers select WiFi-only plans, 93% are only using WiFi for data, not 3G and LTE. Cellular is still important, but only as a backup. (See Republic Wireless Revamps Its WiFi Handoff.)
Republic Wireless CEO David Morken says it's a good time to be his company, and he's not surprised some big names are following its lead. In fact, he says it's inevitable, especially as voice-over WiFi becomes more prevalent. His customers are already doing half of their voice calling and SMS over WiFi. (See AT&T to Launch WiFi Calling in 2015 and Taqua Lets Mobile Users Talk Over WiFi.)
WiFi is becoming so prevalent that he expects cable companies, which have built impressive WiFi footprints, to soon give wireless operators a run for their money. "If WiFi is mobile and cable is the way most of us see WiFi, then cable will be the new mobile," he explains. (See Cablevision's New WiFi Try – Freewheeling Enough? and US MSOs Near 10 Million Hotspots.)
As for Google, Morken wouldn't be surprised if that rumor -- that Google will wholesale or buy cellular spectrum from T-Mobile US Inc. and Sprint to offer cellular service alongside WiFi -- came true too. It is fresh competition he welcomes. (See Verizon Ready for Google MVNO Challenge, Google Search: MVNO and Google Searching for 5G Wireless Engineer.)
"When the big four cellular companies control 99% [of the market] and WiFi is emerging, I would frankly say to Cablevision and Google, 'Welcome. The water is warm. Come on in,' " Morken says. "We love creative new approaches to save customers money."
Republic Wireless has held its own in the competitive US market so far. And surprisingly, Morken says that most of Republic's customers are coming from AT&T Inc. (NYSE: T) 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. (See Why WiFi-First Works for Wireless.)
"We wish we had a niche to attack," Morken quips. "When we do demographic work, we are attracting from Verizon, AT&T and T-Mobile, value-conscious folks but those that have broadband and high incomes -- postpaid bread and butter households whose income approaches $100,000 per year."
Next on Republic Wireless's roadmap is new service plans and "new ways to save our subscribers even more money," Morken says. (Although, don't expect the latest pricing trend -- data rollover -- to come from Republic. Morken thinks that's a crock as it doesn't actually save customers any money.) (See AT&T Revives Its 'Rollover' for the Data Era and T-Mobile Deploys 700MHz, Starts Data Rollover .)
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. 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.
— Sarah Thomas, Editorial Operations Director, Light Reading