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MVNO Ting grows accounts by 36%, is seeing increased churn among GSM users

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Ting Mobile saw the number of accounts on its network increase by 36 percent last year over 2014, according to parent company Tucows Inc., and the number of devices increased by 37 percent.

A Toronto-based provider of mobile and fixed-line services as well as domain names, Tucows posted a fourth-quarter profit of $3.1 million thanks largely to its MVNO Ting. The company hopes to extend its success in mobile to Ting Internet, a fiber-based offering the company has launched in three mid-sized Atlantic coast cities, as its services businesses continue to expand.

"Notably, for the first time, Network Access contributed more gross margin during the quarter than Domain Services," nearly doubling the previous year, CEO Elliott Noss said in prepared remarks. "Our strong cash flows from operations, alongside the operating leverage in our business model, particularly with the success and growth in Ting Mobile over the last few years, are now enabling us to pursue our ambitions on Ting Internet, while still returning capital to shareholders."

Ting is also pursuing former customers of PTel Mobile, which recently closed its doors after 15 years in business.

Ting uses Sprint's network but in late 2014 added support for a GSM network, almost surely T-Mobile's. The move enables Ting to address a broader audience, Noss said during the company's earnings call, but also brings higher churn.

"Because GSM is a global standard, you can find phones more easily than you can with CDMA or phones with the Sprint network, and so people tend to come and go a little easier," he said in a transcript of the call from Seeking Alpha. "One of the things that I talked about on earlier calls is that there is a certain percentage of user, for instance, snowbirds from Canada or people who are coming over from Europe to work for a year, those people who used to potentially use CDMA" are now more inclined to use GSM handsets.

"So we just see this higher churn level on the GSM side. We're trying to put as fine a point on it as we can, but that's the best way to understand it."

For more:
- see this Tucows earnings press release
- read this Seeking Alpha transcript

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