MVNO Ting drops need for deposit, moves to postpaid billing model

In a bid to simplify its service and improve its customers' experience, Sprint Nextel (NYSE:S) MVNO Ting said it will stop requiring customers to put a deposit down at the beginning of their month of service and will instead only charge customers based on what they use.

Previously, Ting customers would put down a deposit based on the kind of plan they wanted. If they used more voice minutes, text messages or data than in the plan they picked, they would pay more to Ting at the end of the month. If they used less than their plan allotted, Ting would refund the difference--a move that often generated questions from customers surprised by the refund. Now Ting customers will pay nothing upfront and will only pay at the end of the month. Ting said the change will not affect the $6 monthly fee per active device or any of its surcharges.

Ting Director Scott Allan told FierceWireless that the company, which has been offering service since February 2012, made a mistake. "We were just a lot less sure about how everything would work initially," he said. The value of the service remains the same, he said, noting that it is significant that Ting is moving to a postpaid billing model.

"I think people have associations with prepaid brands of being lower quality, no frills," he said. "What we strive to be is as good of a value as we can be. We certainly feel like our coverage and customer service are not 'no frills.'"

"For us, there is a significant cost to do this. And there is some risk," Allan added. "Having people's money in advance is clearly from a certain perspective an advantage to us." However, he said that "the benefit of things being simple and clear was worth the cost of not having that money" and could result in fewer calls to customer care.

Ting said the move will push its revenue back a month, but that it will "catch up." Allan declined to provide any specific customer metrics, but said that "we continue to grow rapidly. We're expecting a really good quarter."

Elliot Noss, CEO of Ting's parent company, Tucows, said in May that Ting would "cross over the breakeven threshold" in the fourth quarter of this year. 

Allan said that Ting will launch smartphones running Microsoft's (NASDAQ:MSFT) Windows Phone 8 software in the next 30 to 60 days, but he declined to comment on if or when Ting will get Apple's (NASDAQ:AAPL) iPhone. "It's a big priority for us," he said.

For more:
- see this Ting blog post

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