Ting is looking better -- will allow customers to bring Sprint phones

In a previous post, we described Ting.com, an MVNO (mobile virtual network operator), that resells access to the Sprint cellular network at dramatically reduced prices with no contract. My one complaint was that you could not bring your own phone to Ting. You had to buy a new phone from them, and they offered a limited selection.

Well, that restriction is starting to fade away. Ting announced that during the next quarter, they will begin allowing customers to use their own Sprint phones. That means the selection of new phones will increase dramatically and old Sprint phones will be welcome as well. They point out that, "at first", there will be restrictions -- the iPhone, BlackBerry push to talk and a small list of specific handsets won’t be included.

If you check Ting's prices, you will find significant savings over the major cellular companies. Now that you can bring your old Sprint phone or choose from a wide selection of new phones, Ting (and other MVNOs) seems like a terrific deal for those in areas with good Sprint coverage. The deal is even sweeter if you live in an area which is or will soon be covered by Sprint LTE.

I don’t know how Ting does it. Perhaps Sprint’s wholesale price is very low or perhaps Ting is less greedy and more efficient than the major carriers. Somehow, it offers a better retail deal than Sprint or any of the others. Maybe it is just that it charges more rationally than its competitors. Since 2009, U.S. data traffic has exceeded voice traffic and the gap is growing rapidly, but the cell phone companies still gain most of their revenue from voice.

The cellular and cable companies seem to have arrived at a "gentleman's agreement" to reduce what little is left of Internet service competition. The cellular companies are getting out of the land line business and the cable companies are getting out of the mobile business.

Will the MVNO's like Ting succeed in disrupting the mobile market?

Wishful thinking -- might Ting, Virgin America and T-mobile trigger wireless competition?

Ting pricing example, click to read

Speaking on a panel at the Geek Wire Summit in Seattle, T-Mobile Chief Marketing Officer Cole Brodman said that bundling subsidized mobile phones “distorts what devices actually cost and it causes OEMs, carriers — everybody to compete on different playing fields.” He went on to say that if he were "king for a day," he would do away with subsidized phones.

When asked why T-Mobile did not do it, he said that consumers are used to low phone prices and would not switch even if the long run cost, including usage contact rates, were less.

Well, he may be right, but ting.com is betting that if an unbundled plan is cheap and flexible enough, people will be willing to pay big bucks up front for a phone. How does, say, $62 per month for 2 phones, 500 voice minutes, 1,000 text messages and a 2 gigs of data sound to you? That is a tentative plan I priced out using Ting's rate calculator (see the image above).

But wait, it gets better. There is no contract -- service is month to month. How about their rate plans? There are 216 possibilities. Want more? Ting doesn't roll unused minutes and data over, it gives you cash credit on next month's bill if your actual use is below your plan. What if you exceed the limits of your rate plan? The rate plan is tentative, not hard and fast -- you are bumped up to the next level with not penalty charges. In other words, your bill is a function of your actual usage, not your plan.

It's not all rosy. The phones aren't cheap. For example, a Samsung Galaxy SII 4G is $465, but Ting's billing plans and rates can make up for a lost phone subsidy pretty quickly and you won't be tempted to throw away your phone every two years. For the time being, Ting offers only a few phones and you can't bring your own -- you must buy one of theirs. Another possible glitch -- Ting's carrier is Sprint, and they might have poor coverage in your area.

Virgin Mobile has launched an ad campaign for their unlimited data service. For $35 a month you get 300 minutes of voice and unlimited 3G data and messaging with no contract. Like Ting, they are on the Sprint network in the US, but their 3G phone selection is less impressive.

Might Ting and Virgin Mobile disrupt the mobile phone market? Maybe T-Mobile will jump on the bandwagon. Might we eventually see competition in the mobile market? Stay tuned.