Summary:

ItsOn started out selling mobile plan customization tools to carriers as a cloud-based service. Now it’s becoming a carrier, using its own cloud service to show what the world can do with individually tailored voice and data plans.

Zact mobile phones

The increasingly crowded virtual operator club just got a new member: Zact. Created by Andreessen Horowitz-backed cloud-services startup ItsOn, Zact is hoping to change consumers’ conceptions of the mobile service plan by making them ultra-customizable.

Zact is one of the new breed of mobile virtual network operators (MVNO), though ItsOn CEO Greg Raleigh refuses to use that term to describe his company. Like any MVNO, Zact doesn’t own any spectrum or wireless network infrastructure. It buys its access from a larger carrier instead – in this case Sprint. But Raleigh argues that MVNOs typically repackage traditional mobile voice and data plans, selling them at cheaper prices and without contracts. Meanwhile, Zact is offering a radically different way to buy services, making its plan options so granular that customers can tailor them specifically to their mobile habits.

Many smartphonesZact is actually a lot like Ting, an MVNO launched by Tucows last year that allows customers to select their voice, data and SMS usage separately, lets customers share those services across multiple phones and charges customers only for the minutes, texts and megabytes that they actually use. Zact, however, is taking that concept one step further.

The company plans to offer plans you can customize by the app. For $5 a month you could choose an unlimited Facebook or unlimited navigation and mapping plan, which would exempt either service from your monthly data usage. The virtual carrier is also supporting granular parental controls, which could let adults remotely control when their kids use their phones, but also who they call and what types of apps they can access.

The mobile industry has been talking about such app-tailored plans for years, but, except for a few limited cases, carriers have yet to implement them. The reason Zact is ahead of the curve is because ItsOn core business is in the policy management technology that powers such service models. While there is a huge segment of the wireless industry dedicated to building network-based traffic shaping and policy service technology, ItsOn is trying upend that market by virtualizing all of those capabilities in the cloud.

ItsOn is already trialing its technology with four major carriers – three in Europe and one in the U.S. – but the company wanted to jumpstart demand for such customizable service plans by launching its own service provider, Raleigh said. He added though, that ItsOn has no plans to shut down Zact even if it proves successful selling its cloud policy service to carriers.

ItsOn, however, faces a lot of competition on both sides of its business. The big telecom vendors like Ericsson, Alcatel-Lucent, Oracle and Cisco Systems have been upping their game in the policy management space, in many cases buying up smaller policy players. Alcatel-Lucent recently unveiled a new consumer-facing phone client and back-end management system called Smart Plan that supports most of the same plan tailoring features Zact and ItsOn offer.

The MVNO market is becoming an increasingly crowded one, as well. Ting not only has a head start over Zact, it’s also supporting many new and popular smartphones like the Samsung Galaxy S 4. Meanwhile Zact is selling two older LG Android devices for now. Dozens of other MVNOs are vying for consumers’ attention, and though they may not have the granularity of Zact or Ting’s service plans, they’re all trying to distinguish themselves with other features just as likely to attract consumers’ attention such as ultra-cheap pricing or unlimited data.

Multiple smartphones image courtesy of Shutterstock user Reno Martin

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