Republic Wireless Lowers Cost of Entry for No-Contract Service

Republic Wireless is now offering the option of a $99 Android phone with unlimited service for $29 a month, instead of its usual $19 a month.

Republic Wireless today addressed what can be the major pain point of the contract-free wireless service model—the unsubsidized devices that tend to go with them.

The carrier, which has an unusual business model and the lowest monthly price point in the wireless industry—$19 a month for unlimited talk, text and data, with the purchase of a $249 Motorola DEFY XT smartphone—has lowered the cost of entry. Subscribers now have the option of paying $99 for the DEFY XT, if they instead pay $29 a month for service.

"People love Republic and the tremendous savings we offer consumers, but the up-front $249 price point for the Motorola DEFY XT was cost-prohibitive for some," David Morken, co-founder of Republic parent company Bandwidth, said in a Feb. 20 statement. "Today's announcement provides the option for shoppers to save now with a lower price for the phone, or save over time with a lower monthly cost for service."

Republic Wireless estimates that a family of three, each with a Motorola DEFY XT, saves an average of $2,715 over two years when they go with the $19 plan. When they choose to save on the phone and pay $29 monthly, average savings during the same time would be closer to $2,445.

"In today's challenging economy," said Morken, "there is no reason the monthly cell phone bill should be one of the highest household expenses."

And in today's world, you should expect to get what you pay for.

The Republic Wireless model depends on users spending the majority of their time within range of a WiFi hotspot and using voice-over IP to place calls. When users aren't close to a usable WiFi signal, the phone turns instead to the Sprint network. Republic reserves the right to break up with users who spend too much time on Sprint's network—though it won't say what "too much time" constitutes—and adds that it has yet to break up with anyone.

In a Feb. 11 review, Consumer Reports telecom engineer David Toner, who spent time with the DEFY XT in the New York City area, said he found the phone decent but limited and the service acceptable but sometimes irksome.

The ideal scenario, he said, is to place a call while at home and staying put or else out and about, as transitions are an issue.

"The person at the other end of the call must hit the flash button to maintain the conversation or he'll lose the call," said the Consumer Reports blog, reporting on Toner's review. It added, "The phone did not do a very good job of recognizing when the WiFi signal was becoming too weak to maintain the call, resulting in dropped calls or poor performance. David had better luck manually forcing the phone to switch from WiFi to cellular."

A shortcoming of the phone, which runs the Gingerbread version of Android, is that it can send and receive text messages but not messages with videos or photos. Toner also found it to be "small but chunky."

(Republic's Morken said additional devices will be made available "later this year.")

Pointing out that Republic's savings are potentially greater for someone who decides to take the company up on its $99 phone offer and stay for only a year (there's no annual contract), Toner said, in summary, that Republic is certainly not for everyone. However, he said, it might be an acceptable option for perhaps college students with continually good WiFi reception or else "penny pinchers" who are still carrying around flip phones and "reluctant to pony up the higher monthly cost for a smartphone from a conventional carrier."