Q&A: David Morken, co-founder and CEO of Bandwidth and Republic Wireless
By Sean Jackson for Telco-OTT Today | June 12, 2014
The question has really become – Wi-Fi – why not?
- Why do you think we’re seeing the emergence of Wi-Fi first carriers now?
Wi-Fi is more ubiquitous now than ever before. Over the past three years, Wi-Fi has become a complement to 3G and 4G services, especially for higher speed data offload, and is now a mainstay of connectivity for the majority of smartphone, tablet and laptop users. In 2003, a garden variety Wi-Fi network managed theoretical speeds of 54 Mbps. Today we are browsing over Wi-Fi, in some cases, at 1GB per second or more. So the question has really become – Wi-Fi – why not?
We believe the majority of people are within range of a Wi-Fi hotspot for large portions of their day – whether in their homes or office. We are also seeing the growth of free Wi-Fi hotspots in outdoor hotzones – parks, tourist attractions, and airports, just to name a few. Also, ABI Research estimated that 99 percent of college campuses were enabled with Wi-Fi at the end of 2013.
It’s been said before timing is everything, and that’s true in this area as well.
- Why are we seeing it happen in the US, but not elsewhere?
Wi-Fi is growing worldwide, albeit perhaps a little slower in places outside the US. Wi-Fi hotspot numbers are set to grow from 1.3 to 5.8 million globally in the next four years, marking a 350 percent increase, according to research published by the Wireless Broadband Alliance (WBA), and compiled by Informa Telecoms & Media.
- Describe your average subscriber.
Honestly, we don’t believe there is one specific type of subscriber. We hear from small business owners, parents that are trying to find ways to cut expenses, students that are off to college, people who have issues getting a cellular signal in their homes, and more. We even heard from a Peace Corp worker who took our phone overseas to have a US number to stay in touch with her family.
These days, as Wi-Fi calling becomes more mainstream – especially once we introduced seamless handover between Wi-Fi and cellular – the question has really become: Wi-Fi – Why not? If you are under Wi-Fi coverage most of the day and already pay another provider for that access, why can’t Wi-Fi be your primary network? And most importantly, why buy more cellular than you truly need? Lastly, more and more subscribers are realizing it just isn’t necessary to lock yourself into a two year contract – there are terrific options in today’s marketplace – like Republic Wireless – that just make a lot of sense.
4. Can you share information on your subscribers’ usage patterns – what’s the ratio of calls over Wi-Fi to calls over cellular, the same split for SMS and data?
We don’t share our exact subscriber numbers, but our model works and delivers real value.
With regards to subscriber’s usage patterns, the ratio of calls and text messages over Wi-Fi is always higher than calls over cellular – our customers get that the spirit of Republic is to use Wi-Fi when possible and we provide easy to access tools that show customers exactly how much Wi-Fi they are using. And a benefit of Wi-Fi is that it provides coverage in areas where cellular has historically struggled – places such as basements, tall buildings, and more.
Like all carriers, we see the highest usage with data – simply due to the fact if you have a big attachment like a photo, even with 4G, it is always faster to download on Wi-Fi.
- Do you think the carriers are looking to see whether Republic is successful, before launching copycat services?
If there were a magazine for telecom company of the year, we’d likely be a contestant – we’ve probably been one of the most watched companies in the telecom space for a while now. We’ve been working in this space since late 2009 (beta testing our service through 2012) – so we have had a several year jump-start which is helpful. At the end of the day, while there have been other Wi-Fi calling solutions, Republic created the space, and worked until the technology and approach was scalable for millions of consumers. We also patented the process for seamless handover – anchoring calls in the cloud so when you leave Wi-Fi and switch to the cellular network there is only the very briefest of pauses – so brief you probably won’t notice. When it comes to disrupting the status quo, the hard work is on the front-end. Sure, eventually there will be competing offers. But until then, as rumours persist – and as it has been often said – imitation is the best form of flattery.
- If one of the licensed MVNOs launched a comparable service, would that be bad news for Republic?
No – see above. Also, and this is an important distinction, Republic Wireless is part of the Bandwidth family of companies (see Bandwidth.com for more info.) Bandwidth owns and operates one of the nation’s largest VoIP networks which gives us a degree of control and ability to customize services – this isn’t available to companies (e.g. other MVNOs) that are mainly just re-branding the services of a national carrier. We are also a certified CLEC in 49 states. In fact FreedomPop is a customer of Bandwidth – see press releasehere.
But if you really want to know what our “secret sauce” is, it is that we listened carefully to our customers. We work really hard to provide what they are asking for – modern, powerful devices, great Wi-Fi call quality, MMS, flexible plans that allow you to switch plans twice a month with no penalty, and of course, seamless handover between Wi-Fi and cellular.
- Many tariffs now come with unlimited voice and SMS, doesn’t that kill your business model on voice?
No. The price of those unlimited tariffs is very high (see competing pure voice and text plans from other carriers…usually $30 and above compared to $10 for Republic Wireless).
- Why so few handsets?
Motorola is a terrific partner. It helps to understand how the mobile handset industry works – from concept to launch it can easily take 12 to 18 months to bring a new device to market. At the same time we started working in earnest to procure a mass consumer handset, Google bought Motorola – and Google has been an important partner and customer of Bandwidth for many years. It took some time, but the output of that collaboration was quite evident when the Moto X launched on Republic. It is a stunning handset – attractive design coupled with the technology firepower that smartphone users expect. Then along came the Moto G which most reviewers declared as the best mid-tier handset on the market today. We are extremely excited to see what further collaboration with Lenovo will bring – especially since Lenovo is also based in Raleigh.
- How do you differentiate yourself from the likes of Scratch and FreedomPop?
FreedomPop’s VoIP model is a completely different customer experience - when they talk “free” they mean pure VoIP – IF you need to make a call outside of Wi-Fi or check something on the internet, the capacity for doing this is very limited in their lower cost plans. They don’t offer MMS. There is lots of fine print – and additional costs for using the cellular network – when you study Freedom Pop’s offering carefully.
With Republic, we are all about a no-compromise experience. We believe the business model can and should be simpler. We work every day to offer a similar, or better, experience as you get with a mainstream carrier – only better coverage since you are able to use two networks, and a lower price because one of those networks is a lot less expensive to use.
Scratch is interesting – they are just getting started, and their technology isn’t very advanced yet (e.g. no handover, lesser Wi-Fi call quality performance, no MMS, and a lower tier device – they are selling a Motorola Photon Q for nearly the same price as we sell the more feature-rich Moto X.) Their value proposition for people who use even a small amount of cellular is weaker than ours. That being said, they service a specific Wi-Fi-centric urban niche, and we think that is great.
While our backend technology is revolutionary, we differentiate ourselves with the simplicity of our model. Depending on the handset, with Republic you can pick from four easy to understand plans – and the plan you sign up for is the bill you get. Period. We also allow customers to change their plans right on the phone up to two times per month and their bill is prorated – so you are never paying more than necessary. Nothing to monitor, no surprise in the bill – wireless the way it should be.
10. Finally, what are your plans for the future?
The most wonderful thing about Republic Wireless is how engaged our members are in our success. Any customer can, at any time, make a suggestion for a desired feature via our community ThinkTank. We have a team here that looks at each and every suggestion. Customers vote on the suggestions. Top suggestions are posted to our community with status updates so members can follow our progress.
At the moment we are hard at work on various interoperability issues related to delivering messages via short codes – we anticipate launching that feature soon. Otherwise, we are constantly working to evolve our technology to better serve our customers (e.g. fine tuning algorithms to enhance call quality and handover, more devices, more distribution and awareness, etc.). The results of our customer-first approach speak for themselves – PC Magazine readers recently gave Republic the highest customer service marks over all four national carriers. For more information, the press release can be found here.
We’re on a mission to change the wireless industry – and believe me when I say we’re just getting started.