Startup Taps Devicescape for Wi-Fi-First Network

Date: July 13, 2012

By Sarah Reedy, Senior Reporter, Light Reading Mobile

Sprint Nextel Corp. (NYSE: S) mobile virtual network operator (MVNO) Republic Wireless may be wholesaling the carrier’s CDMA network, but that’s just a backup plan. The startup announced Friday it’s tapping Devicescape Software Inc. ‘s Wi-Fi network as its first line of service.

Republic Wireless offers a $19 per month unlimited voice, text and data service that flips the wireless model on its head by using Wi-Fi as its primary network and offloading onto cellular.

It does so by relying on users’ home and office Wi-Fi networks and, now, Devicescape’s Curated Virtual Network (CVN) outside the home. Devicescape CEO Dave Fraser says his company’s job is to provide ample, open and reliable Wi-Fi hotspots (8 million of them so far) while Republic will handle the handoff and voice-over-IP experience.

“They just want the device to feel like a normal cell phone to their end user,” Fraser says. “That’s their secret sauce. Our technology just makes sure there’s a lot of Wi-Fi that can be used.”

Speaking at the spring CTIA show, Brian Dally, senior vice president of Republic Wireless, said that the startup is targeting consumers who are driven not by device choice but by the promise of low-cost, unlimited network access. The company launched in beta back in November on the LG Electronics Inc. (London: LGLD; Korea: 6657.KS) Optimus, and Dally said it sold out overnight. (See Meet the New US Wireless Operators.)

Devicescape’s deal with Republic isn’t exclusive. The MVNO has also said it’s interested in working with Wi-Fi players such as Towerstream Corp. (Nasdaq: TWER). The service is currently in beta, but Fraser says it will launch in the next month or so.

Why this matters

Republic’s business model is banking on people using more Wi-Fi more than cellular, since it only pays Sprint per megabyte of cellular data use. That’s a risky bet, although it may pay off as Wi-Fi usage is on the upswing.

While Republic’s Wi-Fi-first proposition won’t appeal to everyone (i.e. people who move around a lot), it could be an attractive alternative to anyone fed up with tiers and data caps. If it proves popular, it will also be a real test of the strength of the unlicensed spectrum, which wireless operators are increasingly relying on for data offload.

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