Phone retailer GSM Nation launches US Mobile MVNO to target $25/month market

GSM Nation, which launched in 2010 to sell unlocked GSM phones in the United States and elsewhere, is now moving into the MVNO game. The company recently launched its US Mobile offering in a beta testing mode, and it plans to commercially launch the MVNO sometime in the next six to eight weeks.

GSM Nation founder Ahmed Khattak said the MVNO is targeting users who want inexpensive and simple cell phone service. He said the company currently counts around 500 customers in its beta service, and expects to reach around 100,000 customers within the next 12 to 14 months.

US Mobile's service is similar in some respects to the service provided by Sprint (NYSE: S) MVNO Ting. Like Ting, US Mobile allows its customers to increase or decrease the number of their voice calling minutes, text messages and data allotments as they go. US Mobile's plans allow customers to purchase monthly buckets of minutes, text messages and data. For example, a US Mobile customer can purchase 500 voice calling minutes per month for $9 per month, 500 texts per month for $4 and 500 MB of data per month for $11. Users can increase their allotments of minutes, texts and data during the month. Customers can access their current usage statistics via US Mobile's website. If customers are nearing their monthly usage allotments, US Mobile's system sends them a text message alerting them that they're reaching their limits, and users can simply respond to the text to immediately increase their allotments. If they choose not to increase their allotments, the MVNO will discontinue providing service--meaning, customers won't be charged any overages. Customers can add up to 10 lines of service to their account, and the company's system supports any device that can take a SIM card, including tablets.

Khattak declined to discuss the identity of US Mobile's wireless carrier partner, noting only that customers can bring their unlocked phones to the MVNO. However, according to multiple reports, the company's carrier partner appears to be T-Mobile (NYSE:TMUS).

Khattak said he founded GSM Nation in the United States after seeing the popularity of unlocked GSM phones in other countries. He said that the company generated $8 million in revenues in 2010, $25 million in revenues in 2011, and continued to enjoy increases in revenues in subsequent years. He said the company currently has an annual revenue run rate of $100 million.

Khattak said GSM Nation has supplied phones to MVNOs including Red Pocket Mobile and Simple Mobile (which was acquired by TracFone Wireless). He said the company currently supplies phones to T-Mobile US MVNO Solavei. Khattak said GSM Nation helped provide customer service for its phones for its MVNO partners--he said the company has supplied 10,000-15,000 minutes of customer support calls--and he said the company used that experience to help design its own US Mobile MVNO.

"We based this company around customer experience," Khattak said, noting GSM Nation carefully designed the customer experience for US Mobile. He said GSM Nation counts 24 employees and its US Mobile team numbers seven employees.

Khattak said US Mobile had planned to launch an MVNO service several years ago, but the company became too busy with its business selling unlocked phones. Now, he said, the company believes the time is right to launch an MVNO. But he said the company specifically chose not to launch an MVNO offering unlimited service because he said the market is too crowded with those offers. Thus, he said US Mobile is targeting budget-conscious consumers who aren't heavy wireless data users and who want wireless service for around $25 per month. Khattak estimated the market for such services to be around 25 million Americans.

Khattak said US Mobile will also benefit from GSM Nation's robust phone business. He said the MVNO will offer a wide range of phones, including the iPhone 6 in the next few weeks. He said customers will be able to choose from phones as low as $20 to high-end smartphones. For any phone above $100, US Mobile will offer a $0 down, 6-month interest free financing payment plan, contingent on the customer passing credit checks.

As for distribution, Khattak said US Mobile will primarily focus on online sales and some sales via unnamed partners.

For more:
- see this Prepaid Phone News article
- see this GigaOM article
- see this US Mobile site

Related Articles:
T-Mobile 'very happy' with sales of new Simply Prepaid store to independent wireless dealers
MVNO Karma launches first LTE product with Sprint, doubles user base to 100,000
Global MVNO Truphone to launch iPhone 6, 6 Plus on Sept. 26
T-Mobile MVNO Solavei plans to launch 'phase 2' on Oct. 1

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