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New School of Prepaid Carriers Offer Great Deals — With Drawbacks

Prepaid carriers can offer an affordable alternative to traditional smartphone contracts. You pay more for your handset up front, but in return, they offer savings on voice and data plans and free you from a long-term contract.

Virgin Mobile, MetroPCS and U.S. Cellular are some of the more established and well-known prepaid carriers. But recently, several companies have launched new competitors that offer aggressive pricing on prepaid smartphone plans using a different approach.

This past week, I tested two of those services: Republic Wireless and Solavei. Republic Wireless offers unlimited voice, text and data for just $19 a month and uses Sprint’s 3G network. To keep costs low, the carrier relies on the customer to use Wi-Fi for most of their calls and data, but doesn’t force you to do so. Meanwhile, Solavei uses T-Mobile’s network and offers a $49 per month unlimited plan, with the opportunity to make money by recruiting new customers.

They are enticing deals, no doubt, but both have issues that prevent me from recommending them over the competition.

Republic Wireless has a smartphone plan that almost seems too good to be true at $19 for unlimited everything. There are no hidden fees, but there are limitations. The first is handset selection. Currently, the carrier only offers the Motorola Defy XT. It costs $259 and includes a one-time $10 start-up fee.

To take advantage of Republic’s service, the smartphone is capable of making calls over a Wi-Fi connection and Sprint’s cellular 3G network. Once you’re connected via Wi-Fi, it will use that connection for calls and data until you’re out of range, at which point the phone switches over to Sprint. It does so without the need for an app or prompts from the user, but the process could be more streamlined.

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I was able to connect to my home’s Wi-Fi network with no problem, and a small green icon at the top of the screen alerted me that Wi-Fi calling was now enabled.

After making several calls, I found that Wi-Fi call quality was mediocre compared to cellular calls. Voices sounded far away even with volume at the highest level, and occasionally, the audio cut in and out. Switching to Sprint’s network improved the sound quality on both ends of the call.

My biggest issue is that the phone can’t seamlessly transfer calls from Wi-Fi to 3G. For example, while on a call with my brother, I left my house to go for a walk and once out of Wi-Fi range, the phone simply disconnected the call. It automatically redialed the number using Sprint’s network, but still, it was very disruptive to the conversation.

Also, when not using Wi-Fi, you’ll only get 3G speeds for surfing the Web, streaming video, downloading apps and so forth. Republic Wireless doesn’t limit your usage of Sprint’s network or charge you extra, which is nice, but you don’t get the benefits of today’s faster 4G LTE networks.

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When trying to play a YouTube clip, the Defy XT took more than a few seconds longer to load the video compared to the 4G-enabled Motorola Droid Maxx HD, plus it delivered choppy video quality.

The Defy XT has other issues. It’s running an old version of the Android operating system. The most current version is Android 4.2 Jelly Bean and the Defy XT runs version 2.3. As a result, you miss out on some of the latest features, such as Google Now’s enhanced search capabilities and more detailed notifications. The phone also performed sluggishly in my tests.

Solavei, on the other hand, offers more flexibility in smartphone selection. You can either purchase the ZTE Origin from the carrier for $99 or bring your own unlocked GSM smartphone to use with the service, including the iPhone and Samsung Galaxy S III. There is a one-time $49 set-up fee, and plans cost $49 per month for unlimited voice, text and data using T-Mobile’s network.

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What makes Solavei interesting is that you can earn money by recruiting new customers. For every three subscribers you sign up, you receive $20. If you do so within the first 60 days of starting service, you receive $50. And as your network of recruits continues to grow, the more you get paid. Payments are made every month and deposited into a personal Visa PayCard, which the customer can use like a debit card.

Although this sounds a bit like the sometimes-controversial multi-level marketing employed by some companies in other industries, Solavei, whose founding team includes former executives from mobile data service company Motrocity and T-Mobile, says it has taken steps to ensure that its business model meets government regulations.

Also, customers are not required to recruit new subscribers to use the service. Personally, I don’t like to bother my friends and family with such solicitations, so this aspect of Solavei doesn’t appeal to me. But an affordable $49 smartphone plan does.

I tried the service on the HTC One S, and call quality was disappointing. While using the phone in the Washington D.C. area, I was able to get T-Mobile service everywhere, but oftentimes, the phone only showed one or two bars. There was a noticeable background hiss on all my calls. The audio was also spotty at times, though my friends said I sounded clear.

Solavei touts that it uses T-Mobile’s 4G nationwide network, but it should be noted that T-Mobile doesn’t yet have a 4G LTE network. Instead, it’s using an enhanced 3G network.

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In the D.C. area I averaged download speeds of 4.15 megabits per second (Mbps) and upload speeds of 1.08Mbps. By comparison, the iPhone 5 on Verizon’s 4G LTE network offered average speeds of 26Mbps for downloads and 13Mbps for uploads.

If speed is important to you, you’ll be better off going with one of the other prepaid carriers, such as MetroPCS or Virgin Mobile, which have 4G LTE service. For the budget conscious, Boost Mobile even offers a deal where it will reduce your monthly payment by $5 for every six on-time payments you make and can reduce your bill down to $40 per month.

Solavei and Republic Wireless are certainly two carriers to watch. Solavei gives you the freedom to bring your own device and earn some extra money, which might be appealing to some. But for most consumers, the established prepaid carriers offer greater device selection and competitive smartphone plans. Meanwhile, Republic Wireless’s $19 monthly smartphone plan is extraordinarily cheap, but until it fixes some of the current drawbacks, I would wait before taking the plunge.


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