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What Wi-Fi's Popularity Means for Cell Phone Carriers

Upstarts like Republic Wireless pitch phones driven by Wi-Fi
What Wi-Fi's Popularity Means for Cell Phone Carriers
Photo illustration by Alis Atwell; Photographs by Alamy (7); Getty Images (5)

David Morken holds a Moto X smartphone out for inspection. “This,” he says, “is a Wi-Fi device.” Morken runs Republic Wireless, a national carrier based in Raleigh, N.C., that offers unlimited calls and texts for $5 per month, $40 if you want unlimited data. Republic keeps its prices low by avoiding something most carriers see as essential: It hasn’t built a cellular network. For customers on the road, the company rents network capacity from Sprint. All other Republic calls, texts, and data use Wi-Fi, which Morken says handles about 50 percent of its calls and texts and 90 percent of its data. “Wi-Fi is eating the world,” he says. “Why ignore the biggest network in the world?”

Three-year-old Republic, whose service came out of beta testing in November, declined to release sub-scriber numbers. A competitor offering similar prices, two-year-old Cambridge (Mass.)-based Scratch Wireless, also rents capacity from Sprint. It’s growing by invitation only. Both carriers require the upfront purchase of an Android smartphone modified to use a customer’s home or business Wi-Fi network for a phone call. The newcomers provide a radical response to a mundane fact confronting all mobile phone carriers: After a decade in which the big four U.S. wireless carriers spent tens of billions of dollars to upgrade their networks, arguably the fastest and largest network is the one we’ve all been building together, router by router.