Sprint (NYSE:S) MVNO Ting Mobile reported that the number of accounts and devices attached to its service effectively doubled in 2014, to a total of 94,000 active accounts and 147,000 active devices at the end of the year. While the numbers are relatively small in the context of the larger wireless industry, the company's growth is noteworthy in that Ting is one of the few U.S. MVNOs that publicly reports its subscriber numbers.
Ting is a unit of Internet company Tucows, and because Tucows is a publicly traded company, Ting reports its MVNO subscriber numbers.
In the fourth quarter of 2014, Ting added just over 11,000 accounts and 17,000 devices (Ting allows multiple devices on the same account), slightly below the 12,000 accounts and 18,000 devices it added in the year-ago period.
For all of 2014, Ting added 47,000 accounts and 73,000 devices, almost exactly doubling its overall totals to 94,000 active accounts and 147,000 active devices. The company said its churn is about 2 to 2.5 percent each month. "We've been able to continue to grow gross ads and maintain the consistent churn rate allowing us to maintain net ads despite the impact of churn on a fast growing base," Tucows CEO Elliot Noss said on an earnings conference call with investors, according to a Seeking Alpha transcript of his remarks.
Tucows said that its "network access" business, which in the fourth quarter consisted entirely of revenue from Ting Mobile, saw its revenue jump by 151 percent year-over-year to around $4.4 million. That reflected "the significant growth in the Ting Mobile customer base relative to Q4 of last year," Noss said. Tucows' total net revenue for the fourth quarter jumped 17 percent to $38.8 million, up from $33.1 million a year ago.
In an interview with FierceWireless, Ting Director Scott Allan said the company is benefiting from more data usage. "I think there is a trend in the industry toward higher data usage and we're experiencing an element of that for sure," he said.
Ting's gross margin as a percentage of revenue was 40 percent in the fourth quarter, up from 31 percent in the year-ago quarter.
Under Ting's plans, users can share pools of minutes, messages and megabytes of data, and pay a monthly fee of $6 per phone. Users then also pay at the end of month based on how much they used in terms of minutes, texts or data, but pay based on a range. For instance, using between 501 and 1,000 minutes would cost $18 per month, using between 101 and 1,000 text messages would cost $5 per month and using more than 2 GB of data would cost $29, plus 1.5 cents per each additional megabyte. However, users can mix and match usage on each pool.
Allan said the company received a boost of positive attention after it was rated highly for value and data service in November by Consumer Reports' annual survey of cell phone service, which surveyed 63,352 ConsumerReports.org subscribers last September. Adding support for Apple's (NASDAQ: AAPL) iPhone 5s and 5c last year helped as well, Allan said, as did Ting's referral bonus program, under which consumers get $25 if a friend they have referred to Ting activates a phone and pays a monthly bill (the referee also gets $25). Ahead of Black Friday last November, Ting also offered discounts on devices, which Allan said was "productive."
Ting just announced that an iPhone 6 or iPhone 6 Plus purchased unlocked from Apple can be activated on Ting.
Allan said Ting is "super-efficient" when it comes to marketing (Ting spends under $100 to acquire a customer) and is usually looking to take non-traditional approaches when it comes to marketing. While Ting has placed ads during late-night TV and in movie theaters, Ting is also heavily invested in its referral business.
Later this month Ting is expected to launch an invitation-only beta trial of GSM service, which is expected to be launched on T-Mobile US' (NYSE:TMUS) network (Ting has not confirmed the relationship but a coverage map Ting provided to FierceWireless mirrors the national coverage footprint of T-Mobile.)
Allan said Ting is exploring physical distribution for its GSM SIM cards, which will cost $9 or less, especially in stores or locations that do not usually sell SIM cards. Allan said there is no timeframe for how long the GSM beta will last and that the company expects to launch "some GSM" devices when the service goes live. "We have thousands of customers that will come into the beta in the coming weeks," Allan said.
Adding support for GSM opens up the number of devices that Ting can support, and lets it have a much larger potential customer base. However, Allan said Ting is still happy with its relationship with Sprint and the network improvements Sprint has been making.
Allan said the GSM beta is "the biggest active project in the company right now. It has a lot of attention."
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