A US operator, Republic Wireless, has just launched a hybrid WiFi/cell service for an Android smartphone at the budget price of US$19 per month for unlimited use. Has the elephant in the room just sounded a triumphant trumpet blast? By Ian Scales.
We've been expecting something like this for a while - as loyal readers would probably attest. See...
WiFi and the pachyderm question
WiFi: the next Shaw Thing?
WiFi, the next generation: will Planet Earth become a big hotspot?
And it's no surprise that a WiFi-oriented service has emerged in the US where a desperate lack of real competition has made mobile expensive and WiFi that much more attractive. The business model and user proposition, however, is very interesting. This is not a WiFi network offer, more a 'cell light'.
Here's how it works.
Wireless Republic reckons there's a big market out there in cost-conscious smartphone users - so probably more Android than iPhone. These users, it reckons, won't mind going to a little trouble to make sure they're on WiFi as much as possible if the rewards for doing so are substantial. So what it's come up with is a hybrid service which incentivises the user to connect via home WiFi, hotspot or work WiFi and the carrier service transparently enables both voice and text (in both directions) across that link.
As things currently stand, it's difficult to make cost savings from using WiFi because mobile or cell services are tariffed in call and text buckets (reducing the incentive), and because using alternatives like Skype tends to be difficult and inconsistent.
By completely integrating the service (voice text and data) across WiFi, all the user must monitor is whether he or she is on WiFi or cellular and try to maximise the use of the former, a task assisted by an on-board app.
The way the thing is tariffed is interesting too. For US$19 per month the user gets unlimited calls, texts and data over WiFi, but is limited to 400 minutes of talk, 600 MB of data and 200 texts across the cell network. This is expressed via a ratio mechanism, so if the user is doing 50/50 WiFi and cell, the user is effectively given double the limit. If the threshold looks like being breached because the user is not using the WiFi enough, he is warned to change the ratio and use WiFi more. Persistent overshoot of the cell allowance leads to 'unfair use' and possible account termination.
At present the software required for the smartphone appears to have been embedded as there is only one LG phone on offer (at $199 start-up cost), but it looks likely that the capability can eventually be offered as a download app to support a wider range of phones (other operators are already doing similar things across WiFi using the GAN standard). Steve Shaw from Kineto (which developed the UMA/GAN standard) thinks that the idea is interesting but that the barriers are substantial for any start-up wireless operator in the US.
It will be interesting to see if Wireless Republic gets traction and what variations on this approach emerge (see - Explanation: mobile wholesale).
Follow the writer on Twitter @ ian_TTV
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