The $19-Per-Month Smartphone Is Actually Getting Decent Reviews

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First introduced in 2011, Republic Wireless is a North Carolina-based service that promises a smartphone with unlimited Internet, voice, and texting for an absurdly inexpensive $19 per month. Most astounding of all: The phone seems to work.

The Los Angeles Times recently reported that prepaid cellphone plans like those offered by Republic Wireless rose a hefty 12% in the U.S. last year, for these main reasons:

The cost sometimes is less than half that of a traditional billed service; there’s no restrictive contract or hefty early-cancellation fee; and some high-end providers offer smartphones with unlimited Internet, text and roaming capabilities that weren’t available previously.

At $19 per month, Republic Wireless probably can’t be called a “high-end provider.” But it does offer unlimited data, voice, and texts, and customers aren’t locked into any long-term contracts. The key to the cheap rates is that Republic Wireless customer phone calls are placed via Wi-Fi rather than the usual cellphone network whenever Wi-Fi is available. If Wi-Fi isn’t an option, calls are placed through Sprint.

There are drawbacks to Republic Wireless. How could there not be? Customers have a grand total of one smartphone to choose from—the Motorola Defy XT—and the pricing system may turn some buyers off. It costs $249 upfront to get the $19 monthly rate. Alternately, a new promotion offers the Defy XT at $99, but with a $29 monthly rate. The Wi-Fi calling system is flawed too (see below for details).

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But when all the numbers are added up—initial costs plus monthly charges—Republic Wireless claims that a family of three can save $2,715 over the course of two years, compared to a standard ($64 per month, per phone) smartphone contract.

So what do reviewers have to say about Republic Wireless? Walt Mossberg, the highly influential Wall Street Journal columnist, wrote that the company is “using an unusual technology approach that’s smart and may even represent the future.” While neither the phone nor the service is the best out there, they’re more or less adequate, according to Mossberg:

In my tests, conducted in and around Washington, D.C.; Los Angeles and Silicon Valley, call quality was adequate, text service worked normally, and Web browsing and apps mostly worked OK, at my home, office and public Wi-Fi hot spots in airports and coffee shops.

Edward C. Baig, the tech columnist at USA Today used the word “functional” to describe the phone’s features, noting that he “was able to run several Android apps, including Angry Birds, Slacker, Quickoffice and YouTube, and fetch apps from the Google Play store.” Reviewers like Baig may not be particularly impressed with the phone or the service, but they seem to be very impressed with the price:

Republic Wireless isn’t suitable for every consumer, of course, especially those who want to employ the latest devices and fastest networks. But it’s awfully hard to quarrel with $19 a month.

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A Consumer Reports review, meanwhile, offered the following as its bottom line:

For many smart-phone users, Republic Wireless’ rock-bottom pricing will not be enough to offset its less-than-fast 3G connection to the cell network and the limited phone capabilities. The service might be an acceptable budget option for some people—perhaps college students with access to good Wi-Fi reception or penny-pinchers still carrying around a basic flip phone and are reluctant to pony up the higher monthly cost for a smart phone from a conventional carrier.

None of these come close to qualifying as rave reviews. All of the reviews highlight downsides to Republic Wireless and the phones that can be used with the service. They all bash the “hand-off hassle,” as CR described it:

If you initiate a call on a Wi-Fi network and then move out of that network’s range, the phone handles the transition by automatically placing a second call over Sprint’s cellular network. But the hand-off was not seamless. The person at the other end of the call must hit the flash button to maintain the conversation or he’ll lose the call.

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They all point out that the Defy XT itself is hardly cutting edge, and that it runs on an older, slower Android operating system. Mossberg calls the XT “a chunky device with a lower-resolution screen than any current iPhone or leading Android mode.”

But again, we’re talking $19 per month. At that price, it would be crazy to expect quality on par with the newest smartphones, whose owners probably pay four times as much monthly. If there weren’t downsides to Republic Wireless, then Apple, AT&T, and the other big players in wireless would be in serious trouble right now. Instead, it looks like they’ll be in trouble in the not-so-distant future, when Republic Wireless and other cut-rate providers offer a better selection of handsets and smoother service—at prices that are much cheaper than the industry standard.