Update 11/25/13: Here is a full review of Republic Wireless’s newest phone and plans
Don’t be married to an awful cell phone contract! Breakthroughs in cell phone technology by Republic Wireless and FreedomPop have made smart phone plans cheap, but these plans may not be for everyone. Here we will look at how these plans work and if they will work for you. Even if these phones plans don’t work for you right now, they are just one more reason why you should never, ever, even consider the idea of locking yourself into a 2 year cell phone contract.
VOIP
There are two companies that charge significantly less to power your smart phone than the rest of the competition, FreedomPop and Republic Wireless. They are able to charge so much less because thier phones don’t run on the traditional cellular networks, they run over the internet using a technology called VOIP, or Voice Over Internet Protocol. The way they use VOIP is different however so lets look at both plans to see if one will work for you.
Republic Wireless is the leader in the field of using VOIP to power your cell phone, and it uses traditional cellular networks as a backup which means your coverage area will be significantly better. The backbone of the Republic Wireless plan is wireless internet (wifi) that isn’t even provided by Republic Wireless, it is provided by you, the company you work for, or the businesses you hang around in that offer free wifi. Using that technology they are able to provide unlimited voice minutes, text messages, and data for just $20/month.
The whole idea is based on looking at how the average person uses a smart phone. Most calls are made from home, from your office, or from hotels or restraunts you are hanging around in. Relatively few phone calls are made when you are running between these places. So Republic Wireless’s idea is that if most phone calls are made from areas that already have wifi, customers should be able to use that wifi to make thier calls instead of using expensive cellular networks. For those relatively few calls you make when you don’t have wifi, Republic Wireless uses Sprint and Verizon’s regular cell phone network as a backup. When you are on the run, you can also get 3g data through Sprint. Because most phone calls are made through wifi that Republic Wireless doesn’t have to pay for, they are able to offer service for just $20/ month. That’s a heck of a good deal.
There are a few drawbacks, though. First of all, it doesn’t work that great. A friend of mine tried it out and didn’t care for it. They thought that the call quality was poor and noticed that when switching from wifi to cellular, the phone normally dropped thier call. Republic Wireless does offer a 30 day money back guarantee though, so this experiment didn’t cost my friend anything. Although this didn’t work for my friend, I have seen other reports from people who say the call quality is just fine. Even if the call quality isn’t good enough yet, lets remember that this is first generation technology, and Republic Wireless is likely going to work out all the bugs and be able to provide much better service on their next try.
The other major drawback is phone selection. You can’t buy your own used phone off of Craigslist and bring it to Republic Wireless, you have to pay retail price of $200 for their phone that has been modified with the technology they need to make VOIP work. While $200 isn’t a horrible price for a smart phone, its really not that great of a phone. The phones specs are at least a couple generations behind the most modern smart phones and the software it works on is Android 2.3, which will feel slow and antiquated to those used to running on the current version of Android 4.2. There is also a plan where you can pay just $100 for your phone, but that raises your monthly fee to $30 per month. The payback period is just 10 months, so you should not even consider the $100 phone option.
Another smaller drawback is that you can’t use MMS (sending pictures through text messages) over Republic Wireless. Although I occasionall use MMS, the fact that there are so many other ways to send pictures means this really shouldn’t be what is holding you back from trying Republic Wireless.
The good news is that Republic Wireless is rumored to be coming out with new phones soon. I will be keeping a close eye on this and if I see reports that the phones are both of better quality, and the VOIP technology have improved, I will be ready to jump on this deal.
The other company that is looking to tear down the traditional cell phone marketplace with revolutionary prices is FreedomPop. FreedomPop’s smart phone service isn’t quite available yet, but like Republic Wireless, it will use VOIP. Unlike Republic Wireless, FreedomPop only uses VOIP instead of having a cellular network as a backup. To accomplish this FreedomPop doesn’t rely on it’s customers being around Wifi all the time, it uses Sprint’s 4g data network to provide the internet smart phone users need to make VOIP calls. This seems like a major concern to me because I have found no reports that FreedomPop will have a cellular network as a backup and Sprint’s data network is fairly limited. You can check Sprint’s data coverage here. If Sprint has great coverage in your area and you rarely travel this will work great for you. If not, you better look for a different plan.
The best part of FreedomPop is it’s price, FREE!!!!!!!!!! With the free service you get 500MB of 4g data, 200 voice minutes (unlimited calling to other FreedomPop users), and unlimited texting. If you like to talk a lot, you can upgrade to unlimited calling for just $10/ month, which is a great price.
500MB of data is not a lot. If you want to watch video on your cell phone, then just forget about staying under the 500MB limit. I don’t watch video on my smart phone, but I do a large amount of emailing, navigation, podcasting, and web surfing and I find that I average about 1 GB of data per month, or roughly twice what the 500MB would give me. My wife uses her phone less for the data hungry services I use and more for texting and she uses about 500MB per month. If you already have a smart phone, you can look at your monthly bill or check “data usage” under the settings app to see how much you use on average. You should also remember that data you use over a wifi network doesn’t count against this limit, so watch all the videos you want while you are at home. If you are still not able to stay under this 500MB limit then you can upgrade to 2GB per month for about $20, which isn’t as good as free, but is pretty reasonable.
The area where FreedomPop will have a big advantage over Republic Wireless is in phone selection. You can bring your own Sprint phone to FreedomPop as long is you aren’t under contract with Sprint. If you aren’t comfortable getting a cheap used phone through Craigslist, then you will be able to buy refurbished phones of good quality from FreedomPop for reasonable prices.
So if you the coverage area doesn’t make this a dealbreaker for you FreedomPop should be available in the next few months. I will post an update when it becomes available.
Don’t sign a contract
Signing a 2 year cell phone contract has always been a bad idea, but these new players in the cell phone market make it a horrible idea. First of all, signing a cell phone contract is the most expensive way there is to get a cell phone. Although you might be fooled by the low upfront price for a top of the line smart phone, the monthly fees are so much more than a non contract plan you will end up paying hundreds or even thousands of dollars more for that smart phone over the life of that two year contract.
Secondly, I think the very idea of a cell phone contract is a bad idea based on what incentives it creates for cell phone companies. If I have a non contract phone (I do) then my company’s incentive is to give me a great service so that I will decide to pay them again next month. On the other hand if I am locked in a two year contract, then the company knows I will have to pay next month’s bill no matter how unhappy I am so they don’t have as much incentive to provice great service. A contract company’s incentive is to get people to sign new contracts, which is why you see so many more advertisements for contract companies than you do for non-contract plans.
What Republic Wireless and FreedomPop have done to the cell phone marketplace should make it absolutly clear that you should never sign a contract. Even if neither of these plans work for you right now, you should be able to see what direction this technology is moving in. Both of these companies will continue to improve, and other companies will follow behind them. Sooner or later, there will be a dirt cheap plan that will be perfect for you, and when that plan comes around you need to be able to jump on it. If you are stuck in a 2 year contract, you will continue blowing upwards of $80/month while all of your friends run around with cheap plans making fun of you behind your back.
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