Ian Thibodeau

The Detroit News

Hunter Rosenblume and Rohith Varanasi are offering a new cellphone service through their Detroit-based startup company, Lunar Labs, they say will be cheaper for the average user.

The co-founders sell one type of smartphone, a Motorola Moto G Android, for $50. A customer then pays 25 cents to use each of the phone’s functions on Lunar’s cellular network for 24 hours. So a full day of outgoing calls, a full day of outgoing texts, a full day of tweets and a full day of emails would cost $1. If a customers don’t use their phone for a day, they pay nothing.

Internet usage, apps and emails are free when using a WiFi connection. Incoming calls and texts are always free, whether they’re on WiFi or not. Customers always have to pay to send texts or make outgoing calls.

According Rosenblume, a smartphone user uses on average three or four functions a day, so the average monthly bill for a Lunar Labs customer is cheaper than someone using one of the major U.S. service providers.

According to Consumer Reports, average customers of AT&T, Verizon, T-Mobile or Sprint spent at least $90 a month on their cellphone in 2014.

“We learned that people don’t want to pay the upfront cost for the phone,” Rosenblume said. “They want to pay for what they need, and that’s it.”

Over the summer, Lunar Labs sold 1,000 of the smartphones.

Rosenblume, 21, quit the Georgia Institute of Technology to co-found the company with Rohith Varanasi, 19, in 2015. Varanasi left high school in New Jersey without graduating so he could bring the company to Detroit.

“We wanted to answer ‘How do we bring internet to the world?’” Rosenblume said. “Sixty-four million Americans don’t have smartphones. ...We wanted to develop a product that people would love and feel OK paying for. ...We want to be a carrier that people don’t hate.”

The company employs 10 people, up from the two interns it started with a year ago. Lunar moved to bigger offices downtown, and now is releasing another batch of phones for the same $50 price.

The co-founders wouldn’t say how many more phones they plan to sell. The phones are available to anyone in designated service regions, regardless of income levels. Potential customers can enter their ZIP code at joinlunar.com to see if the phones are available in their area. If not, the website will ask for an email address so the customer can reserve a spot in line to await expansion.

The phones are available throughout most of Michigan. Once the phone is activated, the Lunar network covers customers across the nation.

Rosemblume said Lunar currently provides service to a range of customers, including young professionals in Metro Detroit.

“It’s meant for everyone,” Varanasi said.

Lunar pays to use a major service provider’s cellular network, Rosenblume said, declining to say which company it piggybacks on. Verizon has invested in Lunar, he said.

Lunar Labs is currently supported by several foundation awards, grants and investment from around the country, the founders said.

Rosenblume and Varanasi said they’re taking their sales mobile on the second go-around.

Ford Motor Co. gave the company a Ford Transit van to test out a new business model as a mobile smartphone store. Rosenblume called the van the company’s Lunar Rover. It will function like a food truck, popping up around Metro Detroit to bring phones directly to those who want one. People don’t shop for phones at retail stores anymore, Rosenblume said. To get Lunar’s product out there, the company wants to bring their store to the people.

The company will also ship a phone free of change to customers who live in Detroit.

Varanasi said they will also run classes to train those who’ve never used the devices.

The second round of phones will debut new features like push notifications and revamped customer support, Rosenblume said. With more than 1,000 phones already out there, the team expects to steadily pick up more users.

Those interested in Lunar’s service can check for availability at joinlunar.com/service.

ithibodeau@detroitnews.com

Twitter: @Ian_Thibodeau