Raleigh-based Republic Wireless, which provides low-cost mobile phone service, is planning an innovative new pricing plan that calls for refunding the money its customers spend each month on cellular data that they don’t use.
The company, which currently has plans that offer unlimited data over a cellular network, is developing a new plan aimed at customers who aren’t huge consumers of data or who access most of their data over Wi-Fi rather than over a cellular network. Republic’s hybrid phone service mostly uses Wi-Fi as its primary network and cellular service provided by Sprint as a backup – with the exception of a $5 per month plan that is Wi-Fi only.
“You should only have to pay for (the cellular data) you use. And that’s what we’re trying to do,” said David Morken, the CEO of Republic and its corporate parent, Bandwidth, which also is based in Raleigh.
Morken said 80 percent of Republic’s unlimited subscribers would pay less if they paid only for the data they consume because they use less than 1 gigabyte of data. That’s because the price of the unlimited plan is predicated on consumers consuming considerably more data than that.
Republic plans to launch a beta test of the new plan in May and anticipates making it generally available after 4-to-8 weeks of testing.
The pricing scheme hasn’t been finalized but customers will be able to choose a plan that calls for a set amount of cellular data, which isn’t unlike competitors’ plans. The difference is that Republic customers on the new plans will receive a credit on their next bill, “penny for penny,” for any unused data.
And if customers use more than their allotted cellular data and sign up for additional data, they’ll pay the same rate – “no extra overage charge,” said Morken – and will likewise receive a refund on any of that extra data they don’t use.
Republic’s current unlimited data customers will be able to switch to the new plan if they want to. But they also can stick with their unlimited plan.
“We’re not going to force anyone to leave it,” Morken said.
Republic customers pay $25 per month for unlimited data on a 3G cellular network or $40 for unlimited data on a 4G network. Both plans also include unlimited talk and text.
Republic’s monthly plans don’t include the cost of a Motorola smartphone compatible with its hybrid service, which range in price from $99 to $399. Customers can only buy those phones and sign up for the service on the company’s website.
Morken said that the company is acting from a position of strength.
Republic, which officially launched its wireless service in December 2010, doesn’t disclose how many subscribers it has. But Morken said its subscriber base tripled last year and “we’re on a similar growth pace so far this year.”
The pricing plan is one of several new wrinkles that Republic has in the works.
It’s lined up a second cellular carrier in addition to Sprint that will be able to handle subscribers in the first quarter of 2016, although how that additional carrier will be incorporated into Republic’s service hasn’t yet been finalized. And it’s also planning to expand phone calls and text messages to other devices – including tablets, PCs and smart TVs.
Bandwidth, which is privately held, is approaching 500 employees and generated more than $200 million in revenue in 2014, up about one-third from 2013, Morken said.
In addition to Republic Wireless, Bandwidth provides voice-over-Internet phone service to thousands of small businesses across the country and operates the nation’s sixth-largest telephone network, as measured by phone numbers. Republic Wireless is the company’s newest, and fastest-growing, business.