Yuhnke Commentary: Unlimited cell service $19/mo - Too good to be true?

PHOENIX - Is it a revolution in cell phone service as we know it or simply a big promise that can’t deliver? This week Republic Wireless launched its new service, unlimited calling, texting and Internet browsing for only $19 per month on an Android smartphone. On top of that, there are no contracts involved. My first response is simply, wow! Let’s look closely at the fine print.

Hybrid calling

Republic Wireless is a “hybrid calling” service. This means, the Android smartphone uses wi-fi, when it’s available, for phone calls and data. If you have wi-fi at home and work, all calls will be routed through your Internet connection when those networks are available. Otherwise, the calls and data go through the Sprint network. Republic claims that the wi-fi hybrid feature is built into the phone so the user never actually deals with the switching, it just works. This is the secret sauce of Republic Wireless. The idea is that most of your calls will go through wi-fi and not the cell phone network. The cost for Republic to patch a call through the Internet is peanuts compared to leasing network time from Sprint.

What are the limits?

The company calls its plan unlimited. So that means there are no limits, right? Not exactly. They have something called the cellular usage index or CUI. Republic describes the CUI as “our geeky way to quantify your cellular footprint.” Why would they need to monitor your CUI if the plan is unlimited? Herein lies the rub.

What if I use too much non-wifi calling?

If your CUI is too high Republic will remind you “of the guidelines and to what extent you’ve crossed the fair use threshold.” The confusing part is that the company doesn’t exactly lay out what the fair use threshold is. In fact they even write on their website, “Even assuming 0% wifi usage, for example, you could consume 550 minutes, send 150 texts, and download 300 megabytes of data without crossing the community’s fair use threshold.”

So does that mean the threshold is above 550 minutes, 150 texts and 300 megabytes? My guess is that the CUI balances those three factors into some sort of score that fundamentally helps the company gauge how much you, as a customer, are costing them. Problem is, there are no ground rules set ahead of time for customers before they sign up. It's like stepping into a sink hole that someone told you is kind of deep but not really knowing if you'll be in over your head.

So, is it worth it?

I think Republic Wireless is groundbreaking. Wi-fi is everywhere and most of us spend a good portion of our day in an area that has wi-fi. Why not use that to our advantage, right? Republic makes A LOT of sense. Some cell phone companies have done wi-fi calling before  but never to the point of slashing your monthly bill down to $19! For some users, the limits (whatever they actually are) may be too much. For others, this new service may make perfect sense. I have wi-fi at home and work. I spend almost all of my time at one of those two places. Republic might make sense for me.

If anything, it has to be forcing the other cell phone companies to re-evaluate their pricing plans and wi-fi calling options. I’m excited to see where Republic Wireless goes and to hear about the experiences of those who sign up for it.

By the way, good luck signing up, they're sold out!

No surprise, the idea of unlimited cell phone service for $19 is pretty popular. So much so that the company blogged on Friday (11/11/11) saying it's sold out until early next year and is currently trying to catch up with orders. We'll let you know when they get things back in line.

Would you consider a cell phone service like Republic Wireless?  Why, why not?  Comment below or continue this conversation on Twitter.com/kirkyuhnke and Facebook.com/kirkyuhnke.