Republic Wireless aims to shake up the wireless industry with new service plans that actually pay customers for data they didn't use that month.
"If you're using a different amount of data each month, why should you pay the same price each month for it?" David Morken, CEO of Republic Wireless, said in an interview Monday. "The entire industry needs to be challenged. Customers should only be charged for what they use."
Available this summer, the new plans will give customers a credit on their month for any portion of their data plan they didn't use. That's in contrast to plans from the likes of AT&T, the second largest wireless carrier in the US, which will let wireless customers roll unused data into the next month.
Republic Wireless is a small wireless operator that uses both Wi-Fi hotspots and traditional cell phone networks to deliver voice and data service for smartphones at a much reduced price compared with plans from larger rivals. The company came on the mobile scene in 2012 with the introduction of a $19 a month wireless service. Republic can offer such low prices because its customers are using a Wi-Fi network most of the time. When Wi-Fi isn't available, Republic leases capacity from a wireless provider, allowing Republic's customers to seamlessly roam onto a cellular network.
Now, the company believes its new pricing model will offer yet another reason for consumers to ditch the big wireless operators -- AT&T, Verizon, T-Mobile and Sprint -- for its service.
Customers will get unlimited voice and text messaging service and will buy a "bucket" of data much like they do when subscribing to a larger carrier's service. That bucket applies only to data customers use while roaming on a 3G or 4G cellular network. All usage on a Wi-Fi network is unlimited and included in the cost of the service.
This is a drastic departure from how the wireless industry has operated in recent years. All major carriers offer plans that include a bucket of data that can be used by an individual or shared among multiple subscribers. Customers who exceed their limits are either billed for the overage or have their service slowed. In the past six months, however, AT&T and T-Mobile introduced plans that let customers rollover unused data.
AT&T's Mobile Share Value plan -- introduced in January --. That data is available only until the next billing cycle ends. offer introduced late last year is available to customers who sign up for 3GB of data or more a month and allows customers to bank unused data for up to 12 months.
Morken said these new plans are a good start, but they don't give wireless subscribers what they want: to pay only for the data they use. "It just doesn't make sense," he said. "They should be giving you money back. And that's what we will do."
"What would you do if you have extra gas at the end of the month?" he asked. "Would you take a long road trip to burn through it? No, that's insane. And it's crazy that people pay for mobile data every month that they don't use."
While Republic Wireless hasn't released details of the new plans, Morken said they will be available for new and existing subscribers starting in June. As part of this move, Republic is eliminating its $25 unlimited data plan. Credits for unused data will offer bigger savings, said Morken, although current subscribers can keep this plan if they wish.
Republic also announced Monday that it has added roaming access to a second cellular network. The company currently allows roaming onto Sprint's 3G and 4G wireless networks. While Morken did not identify the new provider, he did say customers will need a new device to access that provider's voice and data services. Those devices are expected to be available late this year or early 2016, Morken said.