Is A $19 Unlimited Plan Really Feasible?
It’s an alluring concept: pay $19 per month (plus tax), get unlimited voice calling, text messaging, and data access. On a smartphone. Sure, it might run an older version of Android on dated, costly hardware, but it’s still a smartphone. With an unlimited plan. Without a contract.
For 19 smackers a month.
That’s the dream North Carolina-based carrier Republic Wireless is trying to deliver on with its new pricing scheme, a rate plan buried in taglines heavy on the word “freedom.” Competing wireless carriers in the United States typically charge three to five times as much for their unlimited offerings, and many of those are smaller companies with sparse coverage and long lists of caveats.
We first heard about Republic way back in November, but the notion of unlimited pricing for such a low monthly rate is just as alluring today as it was in those snow-covered days. Between then and now, Republic has undergone quite a bit of scrutiny, and like most small, young companies, they’ve changed their tune a few times. Their initial promise of unlimited service was tempered by a fair-use policy with nebulous, highly restrictive exceptions to “unlimited access.” When potential customers protested the deceptive nature of marketing a 300MB/550-minute package as an unlimited plan, though, Republic did something unexpected in the resulting staredown: it blinked. Quickly.
As we reported in December of last year, the company posted an entry to its official blog, thanking customers for their vocal feedback. You know how the next sentence usually goes: “However, we remain convinced that our offering is fair and blah, blah, etc.” Except that’s not what happened. Rather than changing its messaging to something rather more … limited, Republic did something unusual: it effectively ceded the argument to the protesters. “Our shift today is because you said that our fair use policy didn’t meet the standard republic wireless was created to meet,” Republic said. “We agree. We … have a more audacious vision that shouldn’t require a fair use policy or a strained definition of unlimited.”
That would be a bold statement from even a national wireless carrier, buried up to its neck in money. For a small mobile-virtual-network operator like Republic, it sounds almost insane. The company was quick to add the following clarification.
… everyone who has purchased or purchases a phone during beta will be guaranteed the opportunity to enjoy unlimited service, without fear of cancellation, until the end of beta. We won’t end beta until we either achieve economic sustainability or become convinced that doing so is impossible.
Notice the reliance on the “b-word” there. Like Google and Apple sometimes do, Republic Wireless is craftily using the unfinished status of its product to allow itself some more breathing room. Still, it’s a very brave move. The rough translation: “you called us on some nonsense we were trying to foist on you, and you were right to do it. We’ll give you what we said we would (unlimited access) until we either start making money, or the roof caves in.”
Beta-speak protection aside, how could any company hope to make money offering a service that its competitors charge up to 500% more for? Well, as the blog post says, Republic “pledge[s] allegiance to WiFi.” The company’s entire strategy is premised on the hope that its customers will use their phones in WiFi mode more often than they will on the cellular network.
As an MVNO, that’s crucial; Republic provides cellular service by buying airtime from Sprint, piggybacking on the large carrier’s CDMA network. Every customer using his phone on that network costs them money. So Republic exclusively offers devices with WiFi capability, paired with special connectivity settings; they’re likely programmed to prefer WiFi connections at all costs. In fact, the company is remarkably up-front about its strategy in a section of its website aptly titled “what’s the catch?”
“Wherever Wi-Fi is,” says the website’s marketing copy, “you have a choice. Add hotspots when you discover them and build your own network. Wireless service shouldn’t be about committing to stay inside the lines. It’s your phone. It’s your service. Change the way it works.”
On the same page, Republic draws back the curtain even farther, calling cellular networks “expensive” in contrast to “ubiquitous and cheap WiFi.” All the while, it goes out of its way to say that usage is all unlimited – no matter what network it’s on – avoiding the marketing quagmire of before.
Republic’s website and brand messaging does its job well. When I’m there, it’s bright, entrepreneurial, can-do spirit seeps into me and I believe that this kind of thing could actually work. Yeah, I think, I ‘ll build my OWN network! I’ll show Big Cellular what I think of their high bills!
But then reality sinks in. Do I really want to be stuck on a Motorola Defy, even though it’s the new version? Am I ready to give up 4G speeds, a wider national coverage area, and all the other perks of being a “Big Cellular” subscriber, just so I can have the privilege of using the same type of WiFi-dependent connection T-Mobile’s been hawking for years? Am I truly willing to ask my host, whenever I visit a new friend’s house or a local place of business, if I can please have his or her WiFi password so I can use my smartphone to its fullest potential?
No, dudes. That’s not what I’m about.
And if the world were full of Michael Fishers, Republic’s model wouldn’t work (and the planet’s hair situation would be a whole lot weirder). But diversity, as usual, comes to the rescue: plenty of people are almost always doused in a WiFi bath, no matter where they go. In some regions, municipal outfits or local cable providers blanket entire towns in 802.11 coverage. Even without that level of immersion, many folks spend their entire lives hopping between indoor locations served by wireless hotspots: home and the office. Along with the extremely-light users and super-cheapskates of the world, it’s those customers Republic will be courting with the $19-unlimited plan and its accompanying “wanted: Wi-Fi people” tagline.
The company will just have to hope there are enough of those users to make it worth the effort, and that the “truly unlimited” approach to its beta program doesn’t blow up in its face. Maybe it’s because I admire Republic’s forthrightness and disruptive attitude, or maybe it’s just my natural tendency to root for the underdog, but I really want them to succeed. For consumers, companies like Republic are market disruptors that offer something valuable while keeping the pressure on the big guys: the very best win-win scenario. That’s reason enough to hope that a $19 unlimited plan is feasible.
Source: Republic Wireless