Ting Mobile is dumping T-Mobile for Verizon amid merger uncertainty (S, TMUS)

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Ting Mobile, a small US mobile virtual network operator (MVNO), will move part of its leased spectrum from T-Mobile’s network to Verizon’s, according to Light Reading.

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The main reason for this shift, according to a statement from Elliot Noss, CEO of Ting parent company Tucows, is the failure of T-Mobile and proposed partner Sprint to finalize their merger and offer the promised benefits of the combined network.

Here’s why Ting is switching to Verizon: The small MVNO — as of Q1 2019 it boasted 284,000 subscribers — is moving to Verizon — the largest wireless provider in the US — because it can offer Ting both better network coverage and better rates, the two most important factors for an MVNO.

Verizon is drawing Ting’s business because the telecom has consistently boasted the strongest network quality and consumer experience. For an MVNO, that will mean that it can offer users consistent service — the same that they’d be able to get by signing on with Verizon — while taking advantage of the more nuanced pricing models that these budget carriers use.

Ting, for instance, doesn’t use traditional monthly plans, but rather bills based on actual usage, so people who don’t use services like SMS or voice calls don’t have to pay for those unused parts of a mobile plan. MVNOs carve out their place in the ecosystem through these differentiated plans that are aimed primarily at budget-conscious consumers or niche markets, so the best network coverage at the lowest price is a top priority.

Ting is also going to get cheaper rates by working with Verizon than with T-Mobile. Noss said that the company’s "contract with Verizon is better than that with T-Mobile in terms of rates, guarantees, and other financial terms, which had negatively impacted Ting Mobile’s past performance." Verizon can probably afford better terms because of its scale, network density, and the amount of surplus bandwidth it’s built up through infrastructure investments over the years.

What this means for T-Mobile: While the loss of one small MVNO isn’t a huge blow for a major telecom like T-Mobile, the reasoning behind Ting’s move reinforces the company’s need to get its merger with Sprint over the line.

A combined T-Mobile-Sprint entity is expected to boast an incredibly robust wireless network. That’s because it would combine two existing stand-alone networks — even with the assets the combined company would need to sell off as a condition of the merger, it would likely offer coverage on par with or exceeding Verizon and AT&T in network quality.

The combined entity would also boast the back-end capacity to offer rates to MVNOs at levels similar to those Verizon offers. The current uncertainty surrounding the merger, though, is harmful for both T-Mobile and Sprint, as the former starts to lose out on business, and both plan billions in investments in infrastructure and spectrum purchases that is conditioned upon a merger that could still fall through.

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