Could Wi-Fi/cellular hybrid be the next big thing?

A recent piece in the New York Times by Randall Stross examining a new trend in low-cost mobile phone plans proves to be an interesting read. He takes a look at Republic Wireless and its appealing hybrid Wi-Fi/cellular service, which utilizes Wi-Fi or Sprint’s 3G network when a hotspot isn’t available.

With a start-up cost of $259, which includes a dual-band Motorola DEFYV XT smartphone, Republic offers service for just $19 per month, plus applicable taxes, for unlimited talk, text and data. There’s no contract to sign and no overages.

Republic – which is owned by Bandwidth.com, which has worked with Google and Skype – asks its users not to be a “data hog” and to use Wi-Fi as much as possible. According to Bandwidth.com co-founder and chief executive David Morken, users are taking heed.

“We don’t have to force people, or even ask people, how to behave,” Morken was quoted as saying. “Over 60 per cent of the time that the phone is being used, on average, our users are using Wi-Fi and that number is only going up.”

While the company would like you to think there’s not a catch, there are always the typical limitations that come along with VoIP, including unpredictable call quality. Additionally, as pointed out by Stross, users will likely be frustrated by the loss of connection when moving from Wi-Fi to 3G coverage. Yes, that means you’ll drop your call. Republic says they’re working on a fix for the issue. And right now, there’s only one phone for use with its plan.

But why is Sprint keen to supply to Republic when it’s obviously undercutting the company’s own business? Sprint’s President of Global Wholesale and Emerging Solutions, Matt Carter, had an easy answer.

“If the world operated based on just economic decisions, people wouldn’t go buy the most expensive cars on the planet, right?”

Enough said.