Good Luck With That: A Super-Cheap Phone Challenges Big Companies

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Republic Wireless is unveiling a super-duper cheap, $19-a-month, no-contract, unlimited-talk, data-and-text cell phone plan meant to "disrupt" the mobile market.

Good luck with that.

Disrupt, is tech speak for "compete with the big carriers." With a $19/month price tag, the tech-blogger masses have decided that this phone will be the one to lure cell phone users away from overpriced Verizon and AT&T contracts. "This really could be disruptive, and while I think it might take some time to pick up steam, the $20 monthly price point has a very broad appeal," writes TechCrunch's Jason Kincaid.

But the attractive price point comes with lots of caveats.

The phone really is as cheap as it sounds. It is $19 a month for everything (not including a $199 phone). Republic Wireless only has one cellular option, The LG Optimus, running Android 2.3 (Gingerbread), which, Kincaid assures, is a "solid low-end device."

But what Republic has in price, it may lack in reliability. The upstart company can afford to offer a rate of less than $20 because it feeds off of wireless connections. Instead of automatically performing most tasks on a data network, the phone hops onto wireless networks for data and calls. This special "Hybrid Calling" system means the phone requires less data, which is often expensive. But as a commenter on Kincaid's post noted, WiFi isn't everywhere. And some WiFi requires a log-in every few minutes. It's just inconvenient.

There's another potential problem. When the phone can't access wireless, it hops onto a data network. And where does this data come from? Sprint. "The company is going to buy wholesale minutes from third-party carriers such as Sprint," writes GigaOm's Om Malik. "The company says the monthly plan would include unlimited 3G data without any bandwidth caps."

So it would seem that Republic Wireless ultimately answers to Sprint, which probably does not want to allow a cheapo phone to disrupt anything.  The potential disrupter is apparently reaching out to other data gatekeepers, but, again, there's no real incentive for Verizon or AT&T to play along.

Of course, for some, reliability isn't everything. Another commenter on Kincaid's post says the phone would be perfect for her young daughter: "This would be perfect for me to finally get a price I can afford for my daughter who's in elementary still but feel safer with her having a phone, but not the large bill that comes with it. I'm going to try it!"

This article is from the archive of our partner The Wire.