Wi-Fi Mobile Phone Plans: Would You Go Wi-Fi-Only For A Cheaper Wireless Plan?

Tired of paying big wireless bills? What if you could pay just $5 per month for unlimited talk, text and mobile data? This plan exists, but there's a catch: It's Wi-Fi-only.

Low-cost calling options have been around for years, with services such as Skype, Google Hangouts and Viber. Even Facebook users can call one another through the Facebook messenger app. But now as Wi-Fi networks proliferate, real phone plans have emerged that utilize the technology, as well as plans that toggle between Wi-Fi and cellular networks where available with the goal of creating either a better signal or a cheaper plan.

As Wi-Fi availability has spread, Wi-Fi calling has become a more viable option for many. There are currently about 5.69 million public Wi-Fi hot spots distributed globally, according to ABI Research. That number is expected to reach 13.3 million by 2020.

Wi-Fi Network Options

Wi-Fi mobile networks could be exactly the disruptive force in the wireless market that makes consumers reconsider the services they subscribe to, said Cablevision CEO James Dolan in late February. The cable provider launched its own Wi-Fi calling network, called Freewheel, just weeks before.

Freewheel offers its Wi-Fi mobile service, which includes unlimited talk and text and data for $29.95 per month, with no contract and no extra fees. In comparison, unlimited talk, text and data goes for $50 on T-Mobile and $60 on Sprint. Verizon and AT&T do not offer unlimited data plans.

Freewheel’s service is powered through the millions of Wi-Fi hot spots in any given area. Interest from competitors is already piqued, as rival cable network Comcast has hinted that it is exploring a Wi-Fi calling option of its own.

But there are many caveats with communication on Wi-Fi networks. A major downside to Freewheel in particular is if there is no Wi-Fi connection available, users won’t have service; weak connections also affect call quality.

The fundamental flaw with Wi-Fi calling is that the idea of jumping from connection to connection isn’t as seamless as networks would have users believe. Even switching from two Wi-Fi connections close in range can be cumbersome. If you are changing from Wi-Fi connections in the same building; from Wi-Fi at a Starbucks to Wi-Fi at your work for example, the handover of that connection is very questionable.

Wi-Fi Plus Cellular

Freewheel is an extreme example, and probably best as a home phone replacement rather than a true "mobile" phone. But some networks are combining Wi-Fi and cellular signals to create cheaper plans. Wi-Fi mobile network Republic Wireless runs primarily via Wi-Fi, but if a Wi-Fi connection isn’t available, it defaults to receiving cellular signals from Sprint. Republic wireless offers plans, including a basic plan with unlimited talk, text and data over Wi-Fi for just $5 per month and a fully loaded plan with unlimited talk and text over Wi-Fi and cellular and unlimited data over Wi-Fi and on-network 4G for $25.

These Wi-Fi networks also offer customers inexpensive smartphone options, but their options are limited to a few devices enabled prmarily as Wi-Fi handsets. Freewheel supports just one smartphone, an all-Wi-Fi version of the Motorola Moto G, which sells for $99.95, $100 less than its original price. Republic Wireless offers devices including the Moto X, Moto G and Moto E, which sell for between $99 and $399.

Google also sees potential in a Wi-Fi plus cellular solution. Google’s upcoming mobile virtual network operator will use such a hybrid, employing both Wi-Fi and cellular networks to maintain connections on smartphones and strengthen the overall quality of its service. The service, currently code-named Project Nova, will launch in “coming months,” Google Senior Vice President Sundar Pichai confirmed in early March.

The “Cloud Phone” Network

There are more outliers to Wi-Fi calling -- for example, the Nextplus app from textPlus, a software company that touts itself as a primary provider of mobile service. Nextplus is available for iOS and Android, and it gives users a free phone number that can be used to call from app to app with no charge but that can also be used to call phones outside the app for a fee as low as $1.

The network boasts 70 million registered users, 70 percent of whom don’t have a carrier contract and 70 percent to 80 percent of whom exclusively use the app over Wi-Fi, said textPlus CEO Scott Lahman. For comparison, apps such as Viber require a data plan to make calls.

“We’re building a telecom services to appeal to the same person who likes to download their TV shows,” Lahman said. “They have multiple devices at home, whether it’s a Kindle Fire or an iPad or an Android tablet or a smartphone. They download Nextplus and now they have this phone number across five devices.”

Because of this shareable aspect, Nextplus calls its service the “cloud phone.” The application and its services have primarily been available in the U.S. and Canada, but they are available globally as of late March.

The app has attracted many young people, who can download the app on devices that aren’t handsets. Other common users include business travelers and spring break travelers -- in general, people who will be making calls back to the U.S. via their hotel Wi-Fi, Lahman noted. In fact, the app sees spikes in usage during spring break and other travel holidays. But average usage could see people accessing the app up to 20 times daily.

While Nextplus users can run into the same issues as users on Wi-Fi mobile networks, many don’t consider certain levels of unreliability a problem. “Our users live on Wi-Fi, and they know where they can go to make a call. They have their hot spots mapped out,” Lahman said. “They’re often OK with taking a break before responding, and in a lot of ways calling is as well. You can always call someone back when you’re on Wi-Fi.”

Users can purchase credits, which go toward paid calls, and translate to about 2 cents to 4 cents per minute. The base option offers 50 credits for $1, while the top option offer 1,250 credits for $24.99. Many users suffice on 50 credits to carry them through the month, Lahman said. Users can also earn credits by interacting with advertisements, an option that 30 percent to 50 percent of Nextplus users utilize.

Carriers Look To Wi-Fi Calling

While some Wi-Fi mobile networks are looking to establish themselves as competition for cellular networks, those standard networks have already taken notice. Carriers including T-Mobile and Sprint offer Wi-Fi calling as an option on their networks, and many smartphones including those by Samsung, HTC and Apple have an option to enable Wi-Fi calling. Verizon and AT&T also plan to establish Wi-Fi calling on their networks in 2015, but both insist that the option is supplementary to their already expensive nationwide cellular coverage.

Many feel that improving overall mobile coverage is a cross-network issue, however, and that carriers will, in fact, use Wi-Fi calling to remedy it. “Seventy to 80 percent of all cell signals are received inside something. That means there’s a barrier between the transmission of that signal and the reception of the signal,”Robert Van Buskirk, president and CEO of weBoost, a company that offers cellular booster hardware, said.