Republic Wireless hybrid Wi-Fi strategy takes shape; invites in new customers

After running in closed beta for the better part of the year,’s virtual operator Republic Wireless is finally opening up its dirt-cheap $19 a month unlimited voice, SMS and data plans to new customers. It’s launching a new smartphone to boot, the Motorola(s goog) Defy XT. The device is a heavy duty Android 2.3 (Gingerbread) phone Republic is selling for $249, but there’s something special below the faceplate.

According to Republic, it’s the first device fully integrated with its proprietary hybrid cellular-Wi-Fi connection management software. Republic isn’t just reselling off-the-shelf devices. It’s delving deep into the Android stack to change the way the phone connects the network, prioritizing wireless LAN connections over cellular and transforming circuit-switched mobile calls to VoIP-over-Wi-Fi whenever possible.

The savings from shunting all of that traffic to Wi-Fi – rather than pay wholesale voice and data partner Sprint (s s) for network airtime – allow Republic to keep its prices low and maintain that endangered species of mobile services, the unlimited and unthrottled data plan. Republic not only leverages its customers’ home and office Wi-Fi networks, but it has signed a deal with Devicescape to access a “virtual” hotspot network of 7.8 million open access points. In the U.S., where Devicescape’s network is the densest, the Wi-Fi aggregator has seen traffic offload rates as high as 40 percent among its customers, according to Devicescape CEO Dave Fraser.

Republic has actually been using Devicescape’s technology in a limited fashion for months, loading its connection management client into the first wave of LG Optimus smartphones it shipped. But by combining Devicescape’s technology with its own hybrid calling software, Republic says can now fully realize its Wi-Fi-first strategy and is thus ready to open the flood gates to new users.

The company is still is in beta, but according to a spokesman the company’s waiting list is now more than 100,000 prospective customers long, and Republic is now letting those people onto the network “in waves.” Republic hasn’t revealed how many people it allowed into the first beta round, but it said it is now ready to scale its business. Here’s what Republic GM Brian Dally had to say in the carrier’s blog:

Members of republic are better equipped than ever before to take advantage of Wi-Fi’s fullest potential, helping to make smartphones affordable for millions more in the process. That’s important at a time when Big Cell is busy making more money at higher prices, with more restrictions and continued confusing business practices.

Republic will be the first operator to carry the water-resistant Moto Defy XT, which sports a 3.7-inch Gorilla Glass(s glw) display, 1 GHz apps processor and 5 MP camera. Republic is also encouraging its existing customers to upgrade to the new device, offering Optimus users a $100 discount if they buy the Moto smartphone.