Raleigh-based Republic Wireless spins off from Bandwidth

Republic Wireless, Raleigh’s homegrown wireless phone service, was spun off from its corporate parent Thursday with $30 million thrown in to ease the transition.

The spinoff marks a new phase for Republic Wireless, which was founded five years ago by Raleigh-based Bandwidth, a technology company that makes sofware and networking technology to run apps for telecommunications providers.

Republic bills itself as the nation’s first wireless service that runs over free Wi-Fi networks and switches users to cell phone networks as a backup. The 160-employee company will remain on N.C. State University’s Centennial Campus.

“We’re leaving the nest,” said Chris Chuang, who became Republic’s chief executive Thursday with the spinoff. Chuang was previously chief operating officer at Republic and before that COO at Bandwidth.

Republic projects $100 million in revenue for 2016 and has achieved operating profit when depreciation, amortization and other accounting charges are not included, Chuang said. The company does not disclose customer totals but has less than 1 million customers nationwide, he said.

Republic has been consistently rated as one of the nation’s top prepaid cellphone providers by Consumer Reports.

Bandwidth will retain some control of its creation by installing its co-founder, David Morken, as chairman of Republic’s 4-seat board of directors.

Chuang said one reason for the spinoff was that Republic Wireless has achieved sufficient size to operate independently. Chuang also said that Republic competes with Bandwidth’s other customers and Republic’s growth has made those business relationships more complicated.

Republic is developing services that will compete with Bandwidth customers and Bandwidth supplies technology services to Republic’s competitors. Republic’s primary competitor is Google’s Project Fi, Chuang said.

Republic’s niche is affordable cell phone service. The company’s Wi-Fi-only service is just $15 a month. Customers who want to roam on cell phone networks out of Wi-Fi range can upgrade to 1 gig for $20 a month, 2 gigs for $30 and 6 gigs for $60.

Phones have to be purchased separately and Republic works only on Android devices; it has not been able to sign a deal that would allow its customers to use the iPhone.

This story was originally published December 1, 2016 at 7:29 PM with the headline "Raleigh-based Republic Wireless spins off from Bandwidth."