Cellphone Start-Ups Use Wi-Fi First to Handle Calls and Take On Rivals

It would not be an insult to say Republic Wireless and FreedomPop are obscure little companies. But they dream big. The two companies are at the forefront of a tantalizing wireless communications concept that has proved hard to produce on a big scale: Reduce cellphone costs by relying on strategically placed Wi-Fi routers. And when there are no routers available, fall back on the traditional cellular network.

They have been at this for nearly five years with mixed success. The companies say they are already profitable and gradually adding subscribers. But they are tiny -- both say their customers are in the hundreds of thousands. Verizon Wireless, by comparison, has more than 100 million. Still, the upstarts have been trailblazers, proof that alternative wireless networks are feasible and maybe even profitable. Now some giant companies look to be following their lead.