Can software help wireless customers save money?
It's hard to believe, in a Web filled with ads promising "the one tip to losing 20 pounds -- fast!" or "the secret to making $100,000 a year in your spare time," any service or company that promises to help people save money. But that's exactly what Zact, a virtual network operator piggybacking off Sprint's national network, is promising to do with its flexible service plans.
Zact is part of ItsOn, a cloud-based service platform that promises to bring smart services to carriers, manufacturers, and consumers. It's meant as a standalone service -- ItsOn co-founder and chief executive Greg Raleigh says that Zact is ItsOn's attempt to prove that it can "walk the talk" -- and as an advertisement for what ItsOn's platform is capable of.
"The reason we started ItsOn is, we said that we've done a great job fixing the connection -- the connection is more than 10 times faster than it used to be, and is much more reliable -- however the services aren't great," Raleigh says, referring to his and co-founder Charles Giancarlo's work at companies later acquired by Cisco and Qualcomm.
Zact offers customers granular control over their service plans, allowing them to change the amount of voice minutes, text messages, or data usage they and others on their plan are able to access at any time. Like Ting, another virtual network operator on Sprint's network that started a $100,000 fund to pay customers' early termination fees with other carriers earlier this year, Zact promises to let customers pay for what they use, not what they might use.
"We want to provide a beacon for the world to show a better model that's better for costumers and better for carriers," Raleigh says. The switch to these granular controls, or "smart services" is coming soon, he adds. "It's just a matter of when, not if. Now that we've come to market and we're showing the world how this works… I don't think it's three years off for everyone doing this kind of thing."
Whether that's accurate or not depends largely on consumers' willingness to pay for unsubsidized devices -- a problem that many no-contract services face -- and carriers' ability to adapt to a changing technological climate. Raleigh argues that carriers would implement smart services if they weren't using 25-year-old technology made for voice calls, not massive amounts of data usage. (I argue that carriers are just fine with making consumers pay for shit they don't use, defending their consciences with not-so-metaphorical buckets of cash.)
The thing that might truly spur change is the increasing number of devices consumers want to connect to the Internet. It's no longer enough to have wireless data available on a smartphone; now it needs to be available on a tablet, hotspot, and, preferably, computer and game console as well. Current services, which make it horrendously difficult to manage -- or afford -- so many connected devices will either force carriers to leave potential business untouched or change their operations.
"Fundamentally, when Charlie and I started the company, we said: Look. The world is headed for a train wreck. Carriers are talking about five or six people in a family group having devices, and each one having five to 10 devices connected to the network," Raleigh says. "It's too cumbersome to try and make a phone call, go to a store, or go to a website to do this stuff. It has to be like the air we breathe and the water we drink."
(Disclosure: ItsOn is backed by Andreessen Horowitz, whose Marc Andreessen, Jeff Jordan, and Chris Dixon are personal investors in PandoDaily, and SV Angel, which is also an investor in PandoDaily.)