Tucows said it has acquired the Canadian MVNO Roam Mobility from Otono Networks.
Tucows is publicly held and operates Ting Mobile, which offers service in the United States through Sprint’s network and likely T-Mobile’s as well. The Toronto-based firm said the move will help it target Canadians seeking wireless service when they travel south of the border.
Terms of the deal were not disclosed.
“When we look at other services in this space, we tend to admire the ones that have solved a specific problem for a specific target,” Tucows CEO Elliot Noss said in a press release. “Roam has done a beautiful job for Canadians who travel to the United States. With their rate plans, user experience, messaging and even SIM card distribution, they have established themselves as the obvious choice here.”
Roam operates on the same nationwide GSM network as Ting.
Indeed, while the MVNO segment is a brutal market that typically produces razor-thin margins, a handful of service providers have thrived by meeting the needs of niche segments. Ultra Mobile has gained traction by catering to the needs of foreign-born consumers living in the United States, for instance, and Consumer Cellular this year notched its 2.5 millionth customer by targeting users above the age of 50.
The acquisition includes three Roam brands, Tucows said, each of which will continue to operate independently alongside Ting’s service with no changes to customers of either offering. Roam Mobility will offer prepaid roaming plans to Canadians visiting America “for a few days or a few weeks,” ZIP SIM will continue to target international business users on U.S. trips, and AlwaysOnline Wireless will offer short-term, on-demand LTE data plans for hotspots and tablet users.
“We get well-positioned brands, smart product features and a lot of knowledge and skill,” Noss added. “Meanwhile, these brands join a business that is investing every day in growth.”
Revenue from Roam will start contributing to Tucows’ bottom line at the end of September, the company said, although it isn’t expected “to have a material impact on overall company performance.” Tucows said it also plans to partner with Otono “for eSIM enablement” and will use Otono’s platform to add support for more devices to Ting customers.
Ting Mobile gained 19,000 customers during the first half of 2017, roughly half of whom were former RingPlus subscribers who migrated to the MVNO. Net organic gains for the six-month period came in at around 5,000 in the first quarter and 4,500 in the second quarter for a combined 9,500—a significant increase from the 6,000 additions it saw in the last half of 2016.
Overall, Tucows’ net revenue for the second quarter of 2017 increased a record 78% to $84.2 million, up from $47.2 million from the second quarter of 2016. Profit increased 29% to $5.2 million year over year, and adjusted EBITDA for the second quarter of 2017 increased 50% to $10.3 million.