MVNO ROK Mobile gets a third carrier partner, likely Verizon, and plans retail expansion

MVNO ROK Mobile added a third carrier partner, likely Verizon  Wireless (NYSE: VZ), and announced plans to expand to as many as 10,000 retail locations by the end of 2015 through partnerships with independent dealers.

ROK said in statement that it "has added the nation's largest and most dependable 4G LTE network to its roster, expanding its coverage reach even further." That description is often associated with Verizon's marketing language for its LTE network, but Clinton Ehrlich, ROK's vice president of marketing, said he could not disclose the name of the new carrier partner. A Verizon spokeswoman said she could neither confirm nor deny any relationship with ROK.  

"It's the third we're adding to our list," Ehrlich said in an interview with FierceWireless. "It is the largest. I think you could probably guess who it is." ROK has disclosed that Sprint (NYSE: S) is one of its partners, and previous reports indicated T-Mobile US (NYSE:TMUS) is the other, something ROK has not denied.

In any event, Ehrlich said nothing is changing with ROK's existing carrier partnerships. "We're looking at general availability… and not keeping anyone out, which is the reason for the additional carrier," he said. Ehrlich added that ROK knows network coverage is important to consumers, and that was part of the reason the company struck the new deal.

ROK launched its service in July 2014 with a plan that offers unlimited voice, texting and data--and streaming music--for $50 per month. In June the company introduced a new $50 plan that capped LTE data usage at 5 GB per month. ROK has also partnered with Devicescape to allow customers to automatically access up to 20 million hotspots on Devicescape's curated Wi-Fi hotspot network. Ehrlich said ROK's subscribers are offloading a "tremendous amount of data."

In terms of its expanded retail distribution, Ehrlich said ROK will soon be bringing its service, phones and advertising to 35 test stores in Atlanta, Los Angeles, parts of New Jersey and New York City to see what works in terms of retail. However, he said that the company is meeting with "lots of other master agents" and is looking to ramp up distribution "very, very quickly."

"The goal is to be between 5,000 and 10,000 stores by the end of the year," Ehrlich said.

Unlike many MVNOs that seek to avoid paying dealers commissions, Ehrlich said ROK will "absolutely" do so. "We understand how the indirect channel works," he said. "One of the things that we really want to do is make dealers happy."

ROK looks at the dealer commission as just one element of its cost per acquisition but one that will likely have a greater economic return than costly advertising. "Instead of overspending without actually knowing what kind of results you're going to get back, we're spending where we know we can get service and devices into customers' hands," Ehrlich added.

ROK has agreements with major and independent music labels to offer a 20-million-song music catalog. Just like Spotify, ROK users can search for and stream songs, as well as create collections and download music when they do not have a data connection. Further, ROK worked with Gracenote to develop its own in-house algorithms to tailor customers' music streams based on a mood they select. The service does have a fair-use policy; ROK does not limit customers' music streaming or data access unless their use is excessive.

Ehrlich said ROK will continue to market itself as a streaming music service that serves those without access to credit cards. ROK noted that its competitors in the streaming music industry, like Apple Music, Spotify and Tidal, all require credit cards for customers to subscribe to their premium streaming services. 

In July 2014 ROK Chairman and co-founder Jonathan Kendrick said the MVNO aimed to have 1 million total customers within the next 12-15 months. Ehrlich said the timeline for achieving that goal has been pushed back, mainly because of the time it took to negotiate a deal with ROK's new carrier partner. While he declined to say when ROK will hit that target, he said that is still the goal.

"The date may have moved out a little bit," he said. "But that's still our goal and we're still aggressively trying to achieve it."

ROK also aimed to expand internationally last fall through a deal with Three UK. Ehrlich said Three is "in the process" of preparing the launch right now and the launch is "rapidly approaching," with an expansion probably happening within the third quarter.  

For more:
- see this ROK release

Related articles:
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Music-focused MVNO ROK Mobile launches, but limits availability
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New MVNO ROK Mobile to launch with streaming music service attached
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