Red Pocket Mobile, an MVNO that supports service from AT&T Mobility (NYSE: T), Sprint (NYSE: S) and T-Mobile US (NYSE:TMUS), is evaluating plans to support device financing payment options. Such plans would allow customers to pay for their devices in monthly installments rather than in one lump sum.
"We are evaluating device financing partnerships right now and will be making an announcement shortly about that," Josh Gordon, president of Red Pocket Mobile, told FierceWireless. "A device financing component is important for many customers."
Red Pocket offers no-contract plans in a bring-your-own device model, and its services are available at retailers including Fry's Electronics and Target. The company sells phones from third-party retailers. Gordon said the company is considering offering device financing plans from one or more third-party providers, thereby allowing its customers to access trusted device financing vendors through the Red Pocket website.
Gordon declined to offer a timeline for the launch of Red Pocket's device financing options.
That Red Pocket is considering offering device financing comes as little surprise. Device financing payment plans, also called equipment installation plans or early upgrade plans, are spreading across the wireless industry like wildfire. The plans were first introduced broadly last year by T-Mobile, and since then Sprint, AT&T and Verizon Wireless (NYSE: VZ), U.S. Cellular (NYSE:USM) and other carriers have followed suit with their own device financing plans. The plans generally allow customers to avoid two-year contracts and instead pair a cheaper, no-contract service plan with a monthly payment plan for their phone.
According to the NPD Group, enrollment in device financing programs has more than quadrupled since September 2013, going from 7 percent to 31 percent by the end of the first quarter.
"There are plenty of options today to finance a device without Red Pocket," Gordon said, but he said the company is considering partnering with an existing financing vendor and offering that vendor to its customers.
Red Pocket isn't the only MVNO looking at device financing. Ting's Scott Allan said in April the company is looking at ways to offer device financing, but so far hasn't found a suitable offering.
In other Red Pocket news, the company today announced a partnership with startup Zipmark to allow Red Pocket customers to top-up their wireless accounts at Red Pocket's website using secure digital checks. In explaining the news, Gordon said that "I think there's a lot of demand for alternative payment mechanisms."
Red Pocket launched in 2006 with service from AT&T and in 2013 it also added service from Sprint and T-Mobile. Red Pocket is one of the few MVNOs in the United States that supports multiple wireless carriers. América Móvil's U.S. TracFone unit remains the nation's largest MVNO--the company supports services from all four of the nation's largest carriers and currently counts around 25.5 million customers.
News on the MVNO front has been heating up recently, as new MVNOs like music-focused ROK Mobile enter the scene and existing MVNOs like Solavei struggle with bankruptcy. But Red Pocket's Gordon said that the "wireless space has been competitive for quite some time."
"We expect continued growth," Gordon said. "I believe the pie is growing overall for MVNOs and innovative wireless operators. … I see this as a growing marketplace."
For more:
- see this Red Pocket release
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