Sprint MVNO Zact offers customized data plans, no overage charges

A new Sprint Nextel (NYSE:S) MVNO, Zact, is taking aim at the Tier 1 carriers--including T-Mobile US' (NYSE:TMUS) new "uncarrier" strategy--by giving customers granular control over their plans, including the ability to change them on the fly.

Even though Zact's parent company, a startup called ItsOn, claims that the service is not an MVNO, Zact uses Sprint's CDMA and LTE networks to offer phones and service. The offering currently is only available on two Android smartphones, LG Electronics' Viper 4G for $399 and Optimus Elite for $199, though Zact plans to add more models as well as tablets and other devices over time. Customers who pre-order the service now can get their phones in June, the company said.

Source: Zact

ItsOn CEO Greg Raleigh told PC Magazine that the company has three more device manufacturers on board and plans for six to eight different devices, at least. "We will have iconic devices," Raleigh said.

Zact's service has a dashboard that lets users change the number of voice minutes, messages, and data they want per month. There is no limit to the number of Zact-enabled devices a user can add to an account, and once added, customers can allocate and customize the amount of voice, texting and data assigned for each person or device. Customers pay a $4.99 monthly maintenance charge per device, but there are no additional fees for sharing and no need for separate amounts of voice, text and data per device.

Importantly, if a user does not use all that they intended with the plan they picked out, Zact will automatically credit money back to a user's account for the difference between that plan and the least expensive plan that matched the customer's usage. The plans also come with parental controls that let customers set pre-approved contact lists and app lists for their kids' phones.

"There's a way to give people exactly what they want and make a profit," Raleigh told AllThingsD.

Zact is designed to let customers dynamically adjust their plans on the go, via software built into Android. The company uses a cloud-based billing platform that allows users to add and remove phones from plans on the fly. Additionally, the company offers app-specific plans, but said that such plans can only be used by one device at a time, and may be reassigned to another device any time during the month. For example, for $5, customers can have unlimited access to Facebook (NASDAQ:FB) without adding a data plan.

There are no defined plans for Zact's service, but the company does offer several different options with a range of voice, texting and data allotments that a customer might use on that plan. For example, the "Just a Taste" plan for $3.49 per month suggests a customer could use 30 voice minutes, 25 test messages and 50 MB of data. The "Sweet Spot" plan for $27.09 suggests a user could get 500 voice minutes, texts and MB of data. The "Super Size" plan for $66.21 suggests usage of 1,250 voice minutes, 5,000 texts and 1.25 GB of data.

Specialized plans that are not one of the pre-set "Zact-sized" plans are not covered by the money-back guarantee, Zact said.

Zact insists it is not an MVNO. "An MVNO would take the same box as the carrier would buy and then create a network with the same offers. That is not what we do, we have a virtual service that has 10 times the flexibility," Raleigh told The Verge, "I would not spend my time on an MVNO."

He also said T-Mobile's new no-contact "Simple Choice" plans were "a good kind of half-step," but that "at the end of the day what is it really? It's just a rebranding or remarketing of the no-contract concept."

The Zact service is similar in many ways to another Sprint MVNO, Ting, which debuted its service in February 2012. With Ting, customers have minutes, text messages and data divided into different buckets. If customers use more than they have paid for in a certain month, they are not charged an overage fee, but instead get bumped up to the next usage tier for that month. Likewise, if customers use less than they had thought they would need, they are bumped down to the next lowest usage tier and will receive a credit on their bill for the difference. Users can continuously monitor their usage via an online dashboard. Ting also lets customers have multiple phones under one account and share pools of minutes, text messages and data.

"In a crowded U.S. mobile market with many new MVNOs, Zact may find it hard going to attract subscribers with its limited device portfolio but should garner significant global attention for its bold move in service delivery approach--which lines up well with Strategy Analytics consumer research findings on high interest in more customizable service plans," research firm Strategy Analytics wrote in a report on the service. "The differentiated service offering should be attractive in particular to value conscious families who want decent Android 4G smartphones and would prefer better budget and per-device service control over unlimited voice and text that they may not need. ItsOn is on to something--on-device, real-time flexible service control for truly customized service plans--and Strategy Analytics expects to see other operators layer this type of model on top of existing shared data family plans and postpaid plans as a layer of content access above monthly data caps."

For more:
- see this release
- see this Zact website
- see this AllThinsgD article 
- see this The Verge article 
- see this CNET article
- see this PC Magazine article 

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