Who’s your new mobile carrier? How ’bout Wi-Fi?

Stephen Stokols of FreedomPop, David Morken of Bandwidth.com, Elliot Noss of Tucows at Mobilize 2012

Almost two years ago Republic Wireless launched with a crazy plan to offer phones that would use Wi-Fi as their default network, sending any requests outside of Wi-Fi over the Sprint 3G network. The program started with a $19 monthly plan and an older model Motorola smartphone using a custom version of Android.

Today almost 90 percent of wireless carrier Republic Wireless’ data traffic goes over Wi-Fi, leaving 11.5 percent traveling over Sprint’s 3G network. While Republic is a niche carrier for the budget conscious that don’t mind a limited selection of phones, it’s also at the forefront of a shift in telecommunications that will not only happen, but needs to happen. Eventually instead of thinking about which carrier you want to use, you’ll just think about Wi-Fi.

“Carriers and cellular will become the mortar while Wi-Fi will be the bricks,” said David Morken, CEO of Bandwidth.com. Bandwidth owns Republic, so Morken obviously has an agenda, but he’s far from alone in pushing Wi-Fi as the primary means of connecting to the web. Free, a French carrier, has built a mobile network using Wi-Fi hotspots provided by its wireline broadband subscribers, and has found success.

Turn WiFi off when leaving home rule

And while Google taking over the Starbucks Wi-Fi networks and the continued expansion of the nationwide cable Wi-Fi network aren’t necessarily attempts to threaten cellular dominance, by providing a cheaper alternative in more places they are making business models that rely on Wi-Fi more viable. How viable? It’s tough to say, since Morken won’t share subscriber numbers. But he did say Republic’s growth is ahead of schedule and that it “has lower rates of churn than the carriers with two-year contracts.” He confirmed that his churn is less than 2 percent — far more impressive than what is usually seen on prepaid carriers.

Of course he also notes that people are using Republic Wireless as a landline replacement, which means that we aren’t exactly comparing apples to oranges. But that’s also part of the shift. Morken and Republic are trying to replace apples with oranges and are showing customers and other providers how to do it. “Cellular will be an edge case,” Morken says. He went on to predict that many connected gadgets like fitness trackers would turn to Wi-Fi.

I like his vision, but Wi-Fi is way too much of a battery hog to be a great solution for smaller connected devices. So even while I think that Google is doing the Starbucks deal to offer Glass users more places to get and stay online, I don’t know if there will be a huge adoption of Wi-Fi any time soon for wearables that don’t need Wi-Fi’s massive data rates.

But regardless, the writing on the wall seems clear. Most connected devices avoid cellular networks because consumers hate paying the expensive monthly fees. In many ways the adoption of the smartphone and the ability to download crazy YouTube videos helped drive the spread of Wi-Fi, especially in the early days when 4G networks and phones weren’t around. Now, carriers look at Wi-Fi as both a savior (punt that video traffic over to Wi-Fi please) and a threat (don’t use over-the-top apps that hurt our texting revenue).

If Morken’s future plays out, this will become increasingly clear to consumers as it becomes easier to find and join available Wi-Fi networks. I asked if Republic might make its version of Android that automatically allows dialing and texting over Wi-Fi available to the general public, and Morken said that wasn’t in the plan.

Republic’s vision will also get a boost as it gets more subscribers, and to do that it needs a better phone. The current model is the Motorola DEFY XT, which is pretty long in the tooth. I asked Morken if Republic is getting a new phone soon and he said an announcement is coming. When I asked if it is the new Moto X he said that the company has a good relationship with Motorola (owned by Google) but that he couldn’t comment further. When I asked for timing for the announcement of any new handset he also demurred.

Morken’s mission today was clearly to raise Wi-Fi’s profile as a viable alternative to cellular connectivity in a variety of devices. I’m with him on that front, although for Republic Wireless to change people’s minds it will need a better handset. It’s done work on the back end to make Wi-Fi more available to users and tweak its software, so maybe when it launches a new phone we can see if it will keep the carriers awake at night.

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