Ting

From Researchandideas
Jump to: navigation, search
Tucows Inc. is an Internet services and telecommunications company, headquartered in Toronto, Ontario. The company is one of the largest domain registrars and operates Hover, a webhosting service, and OpenSRS, a platform for domain resellers. The company was formed in Flint, Michigan, in 1993. The Tucows logo is two cow heads, a play on the homophone "two cows."
This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.
Stock Price Chart for TCX from January 1, 2012 through May 10, 2017. In February, 2012, Tucows launched Ting, a mobile virtual network operator (MVNO). Ting's launch coincided with a rise in Tucows (TCX) stock price. Tucows' stock price has risen 1799% since January 1, 2012. The S&P 500 has risen 87% over the same period. (Click on chart to expand.)
This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.

A Financial Model of Tucows (TCX) and Ting

by Hugh Pickens

Article begun November 13, 2014

I am long term investor who owns stock in Tucows. The purpose of this web site is to provide a comprehensive overview of Tucows (TCX) that documents and explains the company's business strategy and monitors the execution of that strategy with particular emphasis on Tucows' MVNO, Ting. Information about Tucows has been compiled in this report from news releases, earnings reports, earnings conferences calls, and independent reporting on Tucows and Ting.

A financial model shows Ting's past performance and predicts how Ting will perform in the future under different growth scenarios.

Contents of This Report


Contents

Overview of Tucows and Ting

Stock Price Chart for TCX from January 1, 2012 through May 10, 2017. In February, 2012, Tucows launched Ting, a mobile virtual network operator (MVNO). Ting's launch coincided with a rise in Tucows (TCX) stock price. Tucows' stock price has risen 1799% since January 1, 2012. The S&P 500 has risen 87% over the same period. (Click on chart to expand.)
This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.

Financial Analysis of Tucows and a Financial Model of Ting

by Hugh Pickens

Article begun November 13, 2014

The purpose of this web site is to provide a comprehensive overview of Tucows (TCX) that documents and explains the company's business strategy and monitors the execution of that strategy with particular emphasis on Tucows' MVNO, Ting Mobile, and Tucows' fiber initiative, Ting Internet. Information about Tucows has been compiled in this report from news releases, earnings reports, earnings conferences calls, and independent reporting on Tucows and Ting.

A financial model shows Ting's past performance and predicts how Ting will perform in the future under different growth scenarios.

Contents of This Report

Original Article

The original article is available at: Ting Model and Tucows Analysis

Purpose of This Report

The purpose of this report is to:

  • Explain the rise in Tucows stock price and Ting's contribution to the increase
  • Model the contribution that Ting makes to Tucows bottom line

Disclaimer

I am long term investor who owns stock in Tucows. The purpose of this web site is to monitor Tucows so I can understand how my investment is performing. I compile information about Tucows from news releases, earnings reports, earnings conferences calls, press releases, and independent reporting on Tucows and Ting. I have built a financial earnings model to monitor Ting's past performance and to make predictions on how Ting will perform in the future under different growth scenarios. One of that attractions of reporting on Tucows is that Ting's business strategy is relatively straightforward and easy to model with a limited number of inputs. For another example of a company I own stock in and follow closely, go to my report on Phillips 66 (PSX), a much larger and more complex company.

There are three reasons I am making this information available publicly. First, I find I am more careful in my work and systematic in my approach to stock valuations when I know other people are looking at my work. Second, I would like readers of this article to send their comments, appraisals, and criticisms of my work to hughpickens at gmaildotcom so I can incorporate their ideas into my approach and improve my financial model. Third, Tucows is a small cap with a market cap of just over $300 million that is thinly traded and only being followed by three analysts. I would like the stock to become better known because I think Tucows' value will rise in a more efficient and liquid market.

This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who owns stock in the company and uses this web site to follow the company. All information on this web site comes from publicly available sources. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.

Tucows Business Analysis

Other sections of this report on Tucows include:

Background

Tucows Inc. is an Internet services and telecommunications company, headquartered in Toronto, Ontario. The company is one of the largest domain registrars and operates Hover, a webhosting service, and OpenSRS, a platform for domain resellers. The company was formed in Flint, Michigan, in 1993 to provide users with downloads of freeware and trial versions of shareware. The name originally was an acronym for "The Ultimate Collection Of Winsock Software". The Tucows logo is two cow heads, a play on the homophone "two cows."

In February 2012, Tucows launched Ting, a mobile virtual network operator (MVNO). An MVNO is a wireless communications services provider that does not own the wireless network infrastructure over which the MVNO provides services to its customers. The MVNO enters into a business agreement with a mobile network operator to obtain bulk access to network services at wholesale rates, then sets retail prices independently. In Tucows case, the wireless service provider is Sprint. While Sprint provides the wireless network, Ting provides customer service, billing support systems, marketing, and sales personnel. Consumer Reports reported in November, 2014 that Ting is the highest rated small mobile service provider with the best customer service of any MVNO. According to Glenn Derene, the Electronics Editor for Consumer Reports, “Smaller providers like Ting, Consumer Cellular, and Republic have excellent satisfaction ratings because they’re designing innovative strategies to keep plan costs down for their customers and simplify their service options.”[1]

Ting's launch coincided with a rise in Tucows (TCX) stock price and since Ting's launch, Tucows (TCX) stock price has more than quintupled.

Business Segments

The most important single fact about Tucows is that the company operates two different business segments:

  • A predictable, steady, low growth, low margin wholesale domain name registrar business (Tucows is the third largest ICANN-accredited registrar in the world and the company is the largest publicly traded registrar) and
  • A high margin, high growth mobile telco business that is attempting to disrupt a huge industry with large, entrenched incumbents.

The first business is as a wholesale reseller of domain names with over 8 million domain names under management. The domain service business segment of Tucows has a large volume but modest profit margins. The domain name business is a mature business with low margins, large cash flow, steady profits and slow growth.. The business is extraordinarily "sticky." Once someone buys a domain name from the retail side of Tucows or from one of Tucows' resellers, they almost never change providers because it is a lot of trouble to transfer a domain name to a new domain name company.

The MVNO side of the business is very different from the domain name side. The MVNO business generates high profits with gross margins of 45 percent. The MVNO business is also high growth with a customer base that increases by 10 to 15 percent every quarter. Although Tucows MVNO business is only in their third year of operation, it is already a significant contributor to the company's bottom line. There are many competitors but no single company dominates the MVNO business space. MVNOs are experimenting to find the best way to target customers, advertise their plans, acquire new business, provide customer service, and bill customers to become a profitable enterprise.

One thing that Ting has in common with Tucows' domain services business segment is that both segments provide world class telephone based customer service. Tucows has been able to transfer their experience in telephone based customer service from the domain name business segment to their MVNO business where customer service has become Tucows' prime differentiator from its competitors.

Consumer Reports reported in November, 2014 that Ting is the best small mobile service provider with the best customer service of any MVNO. According to Glenn Derene, the Electronics Editor for Consumer Reports, “Smaller providers like Ting, Consumer Cellular, and Republic have excellent satisfaction ratings because they’re designing innovative strategies to keep plan costs down for their customers and simplify their service options.”[2]

Incremental Contributions From Tucows Domain Services and Ting

The following is historical data taken from Tucows financial reports since Q1 in 2013 when Tucows began breaking out financial results from Ting. The spreadsheet shows the incremental contributions from Tucows' Domain Services and Ting.[3][4][5][6]

Spreadsheet 1: 08-08-2016 2013: Q1 2013: Q2 2013: Q3 2013:Q4 2014: Q1 2014: Q2 2014: Q3 2014: Q4 2015: Q1 2015: Q2 2015: Q3 2015: Q4 2016: Q1 2016: Q2
Net Revenue All Domain Services $27,637,000 $27,439,000 $30,919,000 $33,139,000 $27,690,000 $27,328,000 $29,125,000 $27,636,000 $27,541,000 $27,471,000 $28,011,000 $27,738,000 $27,771,000 $28,468,000
Cost of Revenue All Domain Services $19,968,000 $20,068,000 $20,672,000 $24,901,000 $20,035,000 $19,696,000 $20,192,000 $20,067,000 $19,464,000 $19,752,000 $19,569,000 $20,050,000 $19,861,000 $19,940,000
Incremental Contribution from Tucows Domain Services (Before Taxes and Other Expenses) $7,669,000 $7,371,000 $10,247,000 $8,238,000 $7,655,000 $7,632,000 $8,933,000 $7,569,000 $8,077,000 $7,719,000 $8,442,000 $7,688,000 $7,910,000 $8,528,000
Net Revenue Ting $2,348,000 $3,734,000 $4,718,000 $5,729,000 $6,712,000 $8,260,000 $9,749,000 $11,166,000 $12,927,000 $15,418,000 $16,541,000 $17,292,000 $17,839,000 $18,999,000
Cost of Revenue Ting $2,110,000 $2,940,000 $3,597,000 $3,975,000 $4,281,000 $5,040,000 $5,794,000 $6,755,000 $7,345,000 $8,499,000 $9,211,000 $9,188,000 $8,989,000 $9,910,000
Incremental Contribution from Ting (Before Taxes and Other Expenses) $238,000 $794,000 $1,121,000 $1,754,000 $2,431,000 $3,220,000 $3,955,000 $4,411,000 $5,582,000 $6,919,000 $7,330,000 $8,104,000 $8,850,000 $9,089,000
Incremental Contribution from Ting and Domain Services $7,907,000 $8,165,000 $11,368,000 $8,238,000 $10,086,000 $10,852,000 $12,888,000 $11,980,000 $13,659,000 $14,638,000 $15,772,000 $15,792,000 $16,760,000 $17,617,000
Adjusted EBITDA $3,314,000 $3,275,000 $4,920,000 $3,531,000 $6,873,000 $5,357,000 $7,030,000 $6,313,000 $6,313,000 $7,112,000
Net Income $477,000 $1,347,000 $2,691,000 $1,859,000 $2,834,000 $2,285,000 $3,159,000 $3,095,000 $4,438,000 $4,071,000
Net Income per Share 0.04 0.12 0.24 0.16 0.25 0.21 0.29 0.29 0.42 0.39
Closing Share Price the Day After Earnings Report 14.23 16.30 16.35 18.43 18.85 23.91 27.42 19.96 24.16 27.62
P/E 88.94 33.96 17.03 28.80 18.85 28.46 23.64 17.21 14.38 17.71

Notes

Note 1: Incremental earnings reflect the contribution of the business segment before taxes and other expenses.

Note 2: Tucows began using Adjusted EDITDA as a financial metric beginning Q1 2014. Tucows has not yet provided the Adjusted EDITDA figures for Q4 2014.

Note 3: All information in this table compiled from the following Tucows' earnings results:

Tucows Foreign Exchange Strategy

Five Year Chart of Canadian Dollars/ US Dollars Through February, 2016. Up until the end of 2014 the Canadian Dollar was strong against the US Dollar so the company engaged in foreign exchange hedging to provide certainty around future costs. Tucows CEO Elliot Noss said on November 20, 2014 during the 2014 Q3 conference call that with the strengthening of the US Dollar, Tucows foreign exchange strategy will change and Tucows will go unhedged starting in 2015 to take advantage of the favorable exchange rates. "If the foreign exchange rate stays more or less in its current range, EBITDA could benefit by as much as $1 million to $1.5 million in 2015 relative to this year," said Noss.

Tucows is a Canadian company that earns most of its revenue in U.S. dollars, while most of their operating expenses including labor costs, rent, and utilities are in Canadian dollars. Up until the end of 2014 the Canadian Dollar was strong against the US Dollar so the company engaged in foreign exchange hedging to provide certainty around future costs. Tucows CEO Elliot Noss said on November 20, 2014 during the 2014 Q3 conference call that with the strengthening of the US Dollar, Tucows foreign exchange strategy will change and Tucows will go unhedged starting in 2015 to take advantage of the favorable exchange rates. "The appreciation of the Canadian dollar has been a bit of a headwind really over the last decade or so, as our expenses were that much higher relative to our revenues. You see that reflective in our 2014 numbers and our guidance. However, with the recent weakening of the Canadian dollar, we now have a bit of a tailwind. We have typically hedged out 18 months or so, but are now only hedged through the end of 2014. Thus, if the foreign exchange rate stays more or less in its current range, EBITDA could benefit by as much as $1 million to $1.5 million in 2015 relative to this year."[7]

Max Lukenbach reported on January 18, 2015 in a comment to an article about Tucows in Seeking Alpha that since Noss' announcement, the Canadian Dollar has weakened further and that this will be even more beneficial for Tucows and could "add $2,000,000 to EBITDA" during 2015.[8]

Tony Redondo wrote in Exchange Rates' on January 3, 2015 that "the majority of analysts are predicting further US Dollar strength in 2015 on the back of the strong recovery in the US economy and the monetary tightening policy embarked upon by the US Federal Reserve.[9]

Ting Financial Model

Tucows Inc. is an Internet services and telecommunications company, headquartered in Toronto, Ontario. The company is one of the largest domain registrars and operates Hover, a webhosting service, and OpenSRS, a platform for domain resellers. The company was formed in Flint, Michigan, in 1993. The Tucows logo is two cow heads, a play on the homophone "two cows."
This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.


Other sections of this report on Tucows include:




Profitability of Ting Mobile Through Present Quarter

Spreadsheet 2: 08-08-2016 2013: Q1 2013: Q2 2013: Q3 2013:Q4 2014: Q1 2014: Q2 2014: Q3 2014: Q4 2015: Q1 2015: Q2 2015: Q3 2015: Q4 2016: Q1 2016: Q2
Number of Customers at End of This Quarter 12,000 24,000 36,000 48,000 61,000 73,000 82,000 94,000 103,000 113,000 122,000 128,000 140,000 144,000
Customers Net Additions This Quarter to Arrive at Total Customers (Net Adds) 10,000 13,000 12,000 11,000 12,000 11,000 10,000 9,000 6,000 12,000 4,000
Quarterly Churn Rate 7.50% 7.50% 7.50% 7.50% 7.50% 7.50% 7.50% 7.50% 8.20% 7.17% 7.20%
Churned Customers 3,600 4,575 5,475 6,150 7,050 7,725 8,475 9,150 10,496 10,038 10,368
Gross Adds 13,600 17,575 17,475 17,150 19,050 18,725 18,475 18,150 16,496 22,038 14,368
Average Customer Phone Bill per Quarter $105 $105 $105 $105 $105 $105 $105 $105 $105 $105 $105
Gross Margin 45% 45% 45% 45% 45% 45% 45% 45% 45% 45% 45%
Acquisition Costs per New Customer (Gross Adds) $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100
Gross Income in This Quarter $5,040,000 $5,482,313 $6,747,563 $7,919,625 $8,869,875 $10,041,938 $10,895,063 $11,857,125 $12,573,960 $13,543,005 $14,365,680
Cost of Goods Sold in This Quarter $2,772,000 $3,015,272 $3,711,159 $4,355,794 $4,878,431 $5,523,066 $5,992,284 $6,521,419 $6,915,678 $7,448,653 $7,901,124
Cost to Acquire New Customers $1,360,000 $1,757,500 $1,747,500 $1,715,000 $1,905,000 $1,872,500 $1,847,500 $1,815,000 $1,649,600 $2,203,800 $1,436,800
Incremental Contribution from Ting (Before Taxes and Other Expenses) $908,000 $2,467,041 $3,036,403 $3,563,831 $3,991,444 $4,518,872 $4,902,778 $5,335,706 $5,658,282 $6,094,352 $6,464,556
Incremental Contribution from Ting per Share (Before Taxes and Other Expenses) $0.08 $0.22 $0.27 $0.31 $0.35 $0.40 $0.43 $0.47 $0.50 $0.54 $0.57
Delta in Incremental per share Contribution from Ting from Previous Quarter $0.14 $0.05 $0.05 $0.04 $0.05 $0.03 $0.04 $0.03 $0.04 $0.03

Notes and Assumptions

Note 1: Ting started in February 2012. The model goes back to Q3 in 2013. Prior to the earnings report Q3 in 2013 Tucows did not break out the number of customers or devices.[10]

Note 2: There is a discrepancy of 2,000 customers in the number of customers added for 2014:Q3 due to an new method that Ting used for counting customers. "This is the result of a one-time change in how we measure active accounts."[11]

Note 3: The number of churned customers is calculated by multiplying the monthly churn rate (2.5%) times three months per quarter times the number of customers at the end of the previous quarter. Noss said in the 2014:Q2 earnings conference that "It is also worth mentioning that after 30 days of service when customers tend to determine whether they are getting sufficient network coverage, our churn rate drops comfortably below 2% per month."

Note 4: Elliot Noss stated in the November, 2014 conference call that Ting had 82,000 customers at the end of Q3 and in the February, 2015 call that Ting had 94,000 customers at the end of Q4 for an increase of 12,000. Noss also stated they had added 11,000 net customers. The discrepancy is a rounding error.

Note 5: The "Gross Income" is calculated by multiplying the "Average Customer Phone per Quarter" times the number of customers in the previous quarter plus one half the new customers gained minus one half the lost (chruned) in the present quarter. The factor of one-half is used because it is assumed that customers are added in a steady stream so that on average the new customers added will contribute to the gross income only one half of the quarter.

Note 6: The "Cost of Goods Sold" is calculated by taking the "Gross Income" and subtracting from it the "Gross Income" times the "Gross Margin".

Note 7: The "Cost to Acquire New Customers" is calculated by mulitplying the "New Customers Added During This Quarter to Arrive at Total Customers" plus the "Churned Customers" and multiplying this times the "Acquisition Costs per New Customer".

Note 8: The "Incremental Contribution from Ting (Before Taxes and Other Expenses)" is calculated from the "Gross Income in This Quarter" and subtracting both the "Cost of Goods Sold in This Quarter" and the "Cost to Acquire New Customers".

Note 9: The "Incremental Contribution from Ting (Before Taxes and Other Expenses)" does not include taxes and other expenses which are spread over both the domain services portion to Tucows and the Ting portion of Tucows. This will be factored in at the last step of the process.

Note 10: The "Incremental Contribution from Ting per Share (Before Taxes and Other Expenses)" is calculated by dividing the "Net Income for This Quarter (before Taxes and Other Expenses)" by the 11,321,175 outstanding shares of Tucows.

Note 11: In late January, 2016 PlatinumTel Wireless, also known as PTel, alerted its customers that it will be shutting down the service and included Ting among a few recommended mobile providers. Ting welcomed roughly 7,000 of these customers in Q1 of 2016 as a one-time influx of customers, migrating from another MVNO that closed its doors.


Latest News about Tucows and Ting

Tucows Inc. is an Internet services and telecommunications company, headquartered in Toronto, Ontario. The company is one of the largest domain registrars and operates Hover, a webhosting service, and OpenSRS, a platform for domain resellers. The company was formed in Flint, Michigan, in 1993. The Tucows logo is two cow heads, a play on the homophone "two cows." In 2012, Tucows launched Ting, a mobile virtual network operator (MVNO). Ting provides its own customer service, billing support systems, marketing, and sales personnel.
This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.

Other sections of this report on Tucows include:

June 23, 2017: Brutal Competition Means the Cost to Consumers of US Cellular Service in Rapidly Plunging

The Wall Street Journal reported on June 23, 2017 that the cost of U.S. cellular service is rapidly plunging, reversing years of increases that have squeezed consumers’ budgets and generated huge profits for wireless companies. The consumer-price index for wireless phone service, an indicator of current offers from cellphone service providers, dropped 12.5% in May from a year ago, according to the Labor Department. According to Ryan Knutson, offers from wireless providers are becoming increasingly extreme. Sprint this month launched a short-term promotion to give away a free year of wireless service to new customers who supply their own mobile phones.

A major reason for the steep decline in the wireless consumer-price index is companies’ return to unlimited-data plans. Back in 2010 and 2011, AT&T and Verizon ended their all-you-can-eat plans for smartphone customers and imposed monthly caps on usage. Verizon now charges $80 a month for an unlimited talk, text and data plan for a single line. Sprint charges $50 for a similar plan in the first year. In 2011, an unlimited Verizon plan cost $120 and one from Sprint cost $110.

Some economists believe consolidation among the four national carriers could end the price war, because three competitors with roughly equal market share would behave less aggressively to maintain the status quo. During a call with analysts last month, Sprint Chairman Masayoshi Son said he was looking to merge Sprint with another company and that T-Mobile was “the first priority.” But Sprint CEO Marcelo Claure said consolidation will make the industry even more competitive. “Sprint has been working hard to invest in its network and bring increased value to consumers, but as we look to the future, scale will be critical to sustaining competition,” he said in a written statement to The Wall Street Journal.[12]

June 9, 2017: Elliot Noss Encourages Wireless Competition in Canada

Elliot Noss testifies in 2014 before the the CRTC, Canada’s regulatory body for all things telecommunications, in favor of increased competition in Canada's mobile phone service.

Andrew Moore-Crispin wrote on the Ting Blog on June 9, 2017 that Canadians pay among the highest cost for mobile phone service in the developed world and that allowing MVNO's to operate in Canada would benefit consumers.

The Canadian mobile service market has been divvied up between the “big three” wireless companies; Rogers, Bell and Telus. Collectively and colloquially known as Robelus. Yes here in Canada, our oligopolies are so entrenched that they have cute, short-hand names. “Value” wireless brands like Chatr, Public, Koodo—all owned by the big three— only serve to create the illusion of choice. Back in 2014, the CRTC, Canada’s regulatory body for all things telecommunications, opted not to force the incumbents into offering service to “mobile virtual network operators” (MVNOs). It deemed that the quasi-competition seen in the Canadian mobile market, wholly dominated by three major carriers, was sufficient. It pointed to a far distant fourth carrier, then Wind Mobile now Freedom Mobile, as a panacea for what ails Canadian mobile customers. In short, it’s not a terribly vibrant competitive landscape.

According to Moore-Crispin, there are successful models of mandated MVNOs in markets all around the world. In the competitive US environment, MVNOs brought with them a wave of choice and raised the stakes for things like customer choice, customer service and more generally, for customer control and the overall customer experience. In other words, MVNOs put the power in the hands of the customer where it belongs. "Minister Bains speaking out presents a glimmer of hope for Canadians tired of paying the highest prices in the developed world for mobile phone service."[13]

June 9, 2017: Tucows Modifies Credit Agreement with Bank of Montreal

Reuters reported on June 9, 2017 that Tucows entered into an amendment to their credit agreement with the Bank of Montreal increasing the amount available for borrowing under Facility C, a committed, non-revolving credit facility by $502,500 which was the portion of Facility D which was not used by the Company to fund its acquisition of eNom.[14][15]

June 5, 2017: Elliot Noss Says Canadian Government Wireless Review Probably Won't Open Up Market to MVNOs

CTV News reported on June 5, 2017 that a government-ordered review of a recent decision restricting access to the networks of Canada's big wireless service providers is being hailed as potential good news for consumers. But Elliot Noss, CEO of Ting Mobile, an operator of a mobile virtual network (MVNO) in the United States, predicts the results of the review won't open Canada's wireless market to substantial competition any time soon. "If one of the (Canadian) providers would sell us network, we would come into the market immediately. We would love to," said Noss. "We don't expect that to happen in the near term, and today's announcement doesn't change that." Noss said the mandated review doesn't appear to open the door to full access to wireless spectrum by MVNOs, and it will likely be a long time before the regulator implements changes needed to ensure access by smaller players.

The Canadian Radio-television and Telecommunications Commission ruled in March that Rogers Communications, a Canadian communications and media company that operates in the field of wireless communications, cable television, telephone, and Internet connectivity, could block customers of Sugar Mobile, a subsidiary of Ice Wireless, from roaming on its network. The decision not only effectively paralyzed the startup, but also prevented other smaller mobile service providers from offering cheaper plans and consequently limits choice in the market, Innovation Minister Navdeep Bains said Monday in calling for a rethink of the ruling. "This decision excludes Wi-Fi based providers from access to regulated roaming services," Bains said while speaking at an annual conference in Toronto for the Canadian telecommunications industry. "And that effectively prevents Wi-Fi based providers from offering their low-cost plans to consumers. This lack of choice does not benefit Canadians."[16]

June 2, 2017: Ting Moves Ahead in the Race for Fiber in Centennial

Ting Moves Ahead in the Race for Fiber in Centennial. The city of Centennial has been hard at work building a main fiber backbone constructing more than 34,000 feet of conduit and fiber with brand-new, carrier-grade backbone and finalizing contracts for construction of the next phase, including more than 30,000 feet which completes the first ring of the fiber backbone. Click Graphic to expand. Graphic: Fiberworks

The Ting Blog reported on June 2, 2017 that there’s been some great progress on Ting Internet in Centennial. The City has been hard at work building a main fiber backbone constructing more than 34,000 feet of conduit and fiber with brand-new, carrier-grade backbone and finalizing contracts for construction of the next phase, including more than 30,000 feet which completes the first ring of the fiber backbone.

Ting Internet has been submitting plans for the Ting Centennial network to the City and are working together to finalize the design. Ting is also looking at real estate as they decide where to build required network infrastructure (known as the central office and fiber huts, in industry parlance) and lay down roots in Centennial. "Building a fiber network is no mean feat; there’s a ton of engineering and planning before we even think about putting a shovel in the ground. Before construction begins, we’ll announce some broad phases for the build, along with announcing which neighborhoods will get fiber first."

Right now Ting is taking pre-orders for fiber. "All things being equal, pre-order volume is absolutely a factor in our network planning. Build where there’s the most demand first; it just makes sense." The ten hottest neighborhoods in Centennial for pre-orders are: Orchard Valley, Saddle Rock, Willow Creek 1 and 2, Mill Creek, Heritage Village, Willow West, Tiffany, Chapparal, Piney Creek, Walnut Hills.

What about news that Comcast is planning to bring their gigabit to Denver and the surrounding area? "Gigabit gets promised a lot more than delivered. We (customers and lovable little providers alike) just need to believe it when we see it. Then, even when we see it, there is a big difference between the fiber-to-the-home, never compromised, symmetrical gigabit (upload and download of 1,000 Mbps) that Ting offers and what the cable companies tend to pass for gigabit Internet. Finally, we offer fair, honest pricing and outstanding customer support. How many of those words have you used to describe your cable company?"[17][18]

See also:

June 2, 2017: Intermax Becomes “First to Fiber” in Sandpoint

Intermax issued a press release on June 2, 2017 that they will be the first company to enter into all of the required agreements with the City of Sandpoint to provide service on the city’s Economic Development fiber network. “The city has worked for years to make this happen, and we’re proud to have Intermax be the first provider on the city’s network. They are a local North Idaho company who has many clients in Sandpoint and Bonner County” said Jennifer Stapleton, Sandpoint City Administrator. “We’ve provided fiber services to commercial businesses in Sandpoint for years,” said Intermax President Mike Kennedy. “But today we are proud to be the first private partner with the City of Sandpoint to expand our network by licensing space on the city’s new fiber infrastructure”, Kennedy added.[19]

See also:

May 25, 2017: OpenSRS Advises Resellers of Upcoming Uniregistry Price Increases

The OpenSRS blog reported on May 25, 2017 that Uniregistry has announced a number of TLD price increases taking effect on September 8th, 2017, a decision that has caused concern in the domain community. "We weren’t happy to hear the news but knew we had to take immediate action," writes Haley Midgette. "Our primary concern was to determine how the changes would impact you and your customers, and what adjustments could be made to minimize the effects." Tucows will continue to support the following TLDs: .click, .link, .help, .pics, .sexy, .christmas, and .tatoo. However Tucows will no longer support the TLDs that have the potential to be disruptive to your business because the following TLDs may subject your customers to unknowingly overpaying in a price range well beyond $100 per year: .audio, .juegos, .diet, .hiphop, ,flowers, .guitars,. hosting, .property, blackfriday.

According to OpenSRS, regardless of which boat a customer falls into, they’ll appreciate advanced notice especially those who own TLDs that Tucows is dropping. Resellers can advise those customers to request a renewal for the full 10-year period, well in advance of the September 8th deadline, should they wish to hold onto their domain name. "As a Reseller, you can take advantage of the opportunity to demonstrate that you are working proactively, and are committed to securing the best possible deal for your customers."[20]

May 18, 2017: Three Insiders Sold Tucows Stock During May

Jeffrey Nathan Schwartz sold 4,962 shares of TCX on May 18, 2017 at 57.05. Jeffrey Nathan Schwartz sold 7,222 shares of TCX on May 18, 2017 at 57.0. Jeffrey Nathan Schwartz sold 4,691 shares of TCX on May 11, 2017 at 57.05.

Rawleigh Hazen Ralls sold 469 shares of TCX on May 16, 2017 at 56.90. Rawleigh Hazen Ralls sold 9,531 shares of TCX on May 15, 2017 at 58.26.

Michael Goldstein sold 4,163 shares of TCX on May 16, 2017 at 56.83. Michael Goldstein sold 9,876 shares of TCX on May 12, 2017 at 58.76. Michael Goldstein sold 6,442 shares of TCX on May 11, 2017 at 57.05.[21]

May 18, 2017: Global Appetite for Gigabit Internet Not Slowing Down

WHIR reported on May 18, 2017 that Gigabit internet implementations have jumped 72 percent worldwide since June 2016, with more than 219 million people around the world accessing a gigabit internet service. The U.S. has 56 million consumers with availability but this represents only 17 percent of the country’s population. "The gigabit revolution shows no signs of cooling down in 2017," says Sameh Yamany, Chief Technology Officer, Viavi Solutions. "As bandwidth increases, so does consumer appetite for it. Likewise new business models have been quick to take advantage of new bandwidth, as we’ve seen with streaming video and audio in the recent past – and which we believe will continue in the near future with VR, AR and the Internet of Things.”[22]

May 9, 2017: Tucows Shifts Expired Domain Name Inventory from GoDaddy to NameJet

Domain Name Wire reported on May 9, 2017 that Tucows has stopped sending its expired domain name inventory to GoDaddy and will instead send it to NameJet. "Tucows’ move doesn’t come as a huge surprise," writes Andrew Allemann. "The company acquired half of NameJet when it bought eNom. eNom has sent its expired domain inventory to NameJet ever since it formed the partnership in 2007. However, the timing is a bit surprising given that Tucows’ deal with GoDaddy began less than a year ago. I would assume they had some sort of contractual obligations."

“We wanted to be good partners," says Paul Nicks, VP & GM, Aftermarket at GoDaddy. "We’re grateful for the opportunity Tucows gave us when they chose GoDaddy as their first partner for expiry inventory. We believe Tucows saw great results and we feel confident that GoDaddy’s performance will speak for itself and that we’ll earn the opportunity to win back that business.”[23]

May 9, 2017: Tucows CEO Elliot Noss Explains the Impact of the eNom Acquisition and Deferred Revenue on Q1 Earnings


Following is a transcript of Elliot Noss' video explaining the impact of the eNom acquisition and deferred revenue on 2017 earnings:

See also

Introduction

Hello. I thought it made sense this quarter to do a video talking about the impact of deferred revenue on our results for this quarter. I should note that I 'm talking about the first quarter of 2017.

If you've read the press release or if you listened to the conference call or read the script afterwards you would have heard me talk about a 4.8 million dollar impact from deferred revenue so I wanted to explain that a bit to help you all understand it in a little more detail and possibly save you from having to track me down for a deeper explanation.

How Accounting Works With Domain Names

First I want to talk about how the accounting works for domain names with deferred revenue.

When we sell a domain name we recognize it pro rata over the life of the domain. Typically, to take the simplest example, we sell a domain name for $12 and we sell it in January. In January we will recognize a dollar of revenue and we will defer $11 recognizing another dollar each month throughout that year's registration.

Now in addition we also will be pre-paying the registry fee. Let's imagine the registry fee was nine dollars for the year. So we'll be recognizing seventy-five cents in cost in January and then each month pulling a dollar to revenue and seventy-five cents into cost over the life of the registration.

How Deferred Revenue is Treated at the Accounting Level

Now the first thing that complicates this quarter is the way the deferred revenue is treated at the accounting level with transactions.

When a company acquires another company that has a deferred revenue asset on their balance sheet, essentially the deferred revenue gets wiped out and reset to zero. It's a simple way to think about it. So when we bring over that eNom book of business, we don't bring over all of the deferred revenue.

That deferred revenue gets re-evaluated and in this case there was a reduction of about eight million dollars.

Now that eight million dollar reduction is an accounting exercise obviously taken on by accounting professionals. That eight million dollar reduction is the total negative impact that we will have from the eNom transaction and that impact will take place overwhelmingly in 2017.

Refilling the Balances of eNom's Deferred Revenue

What we're essentially doing in the first quarter is we are refilling the balances of that deferred revenue. Now I'm just going to talk about the eight million dollars revalued. In January we are essentially putting that money back in, stocking up the balance for the remainder of the year, and pulling out 1/12 of that amount.

In February, when you're doing it, you will be recognizing both the February and the January and pushing the rest out. Over a year, that washes out.

As you can see in January it's going to have the biggest impact because in January you're only pulling in the one month and deferring the 11. But by the time that same thing is happening in December you've got all those previous months where you've already stopped yor deferral asset that you're pulling out into so the impact is by far the biggest in Q1.

Purchase Price Accounting

Now the second thing that complicates this is what's called purchase price accounting. I don't purport to explain it but it is a one-time charge in the amount of 1.4 million dollars that again takes place in Q1 and is part of the eight million dollars. That we are allowed at an SEC level to talk about in relation to EBITDA.

The rest of it, the other 3.4 million in the quarter we are not allowed to talk about because of the third complication.

SEC Change to Treatment of EBITDA for Companies that Sell Subscription Services

In May 2016, the SEC changed the way that they advised companies to talk about adjusted EBITDA. In particular the SEC was concerned how companies who sold a subscription service were in their EBITDA calculations and treating their sales as if they were the sales of a product.

Typically when you have a subscription service you recognize the revenue ratedly over the period of subscription. You know from what I've said above that that's what happens with domain names but unlike most subscriptions with a domain name once you pay upfront there is no right-of-return. The bulk of that work is done on our part right at the time we sell the domain name.

Put that aside because we're not debating the accounting treatment, we're just trying to understand it a little better. But because of the SEC's concern about subscription services, they strongly advise companies that that they should not bring deferred revenue amounts into adjustment of EBITDA calculations.

We had always included the amount of net deferred revenue in our adjusted EBITDA calculations. We did that through Q1 of 2016. When this change was made, we talked about it and we went along with the change and reported it on the basis of the new standard.

OpenSRS a Very Large, Slow Growing Business

Now because open SRS is a very large, very mature, relatively slow growing business, that change didn't really have a material impact on our adjusted EBITDA. It might have had a couple few hundred thousand dollar impact per quarter which we were very comfortable with. So we complied with the change.

But that change now, with the acquisition of eNom and with the way that the accounting treats deferred revenue, when you bring over balances with an acquisition has a material impact. The impact of deferred revenue is 4.8 million dollars in the quarter. That 4.8 million dollars really has an impact on adjusted EBITDA as we reported it under the old approach back in Q1 2016. In Q2 and going forward with the new approach only 1.4 million of the 4.8 million can be applied to adjusted EBITDA.

The Way We Run the Business Historically is on a Cash Basis

I know this is becoming convoluted but I'll ask you to bear with me and maybe watch the video a couple times if you need to. The point is that the way we run the business is on a cash basis. There's about a 4.8 million difference between the adjusted EBITDA number we report and the way that we have historically reported adjusted EBITDA prior to Q2 2016.

The total difference for 2017 will be 8 million dollars and you'll see that runoff.

To summarize, that impact I've talked about EBITDA on an apples-to-apples basis - going from 30 million dollars in 2016 going to 50 million dollars in 2017.

I've also talked on both the about the fact that the 50 million dollars EBITDA would be impacted by this change in the SEC approach would be more like in the 42 million dollar range. So you will see the 6.2 million we reported this quarter as relating to the 42 million number. If you wanted to compare it to the 50 million figure you'd add back that deferred revenue.

But most importantly that washes out through the year so in 2018 all of this will have washed through.

Summary of the Four Factors Affecting the Numbers

If we were to assume and this is just an assumption for strictly expository purposes which is the furthest thing from guidance, we would have assumed that we grew the business on a cash basis the way we have historically thought about it from 2017 to 2018 by 20%, the change in the this approach and the new way that the SEC would like us to talk about it, would have us go 30, 42, 60.

Using the old approach 30, 50, 60.

Of course the big difference in 2016 to 2017 is that eNom is coming.

So I hope that helps you understand both the what and the why. Again you have the combination of deferred revenue treatment in domain names, purchase price accounting, the way that the deferred revenue is treated with acquisitions, and a change in SEC policy or at least guidance that really leads to a somewhat convoluted explanation.

May 9, 2017: Tucows Reports Continuing Strong Financial Results for First Quarter of 2017

Stock Price Chart for TCX from January 1, 2012 through May 10, 2017. In February, 2012, Tucows launched Ting, a mobile virtual network operator (MVNO). Ting's launch coincided with a rise in Tucows (TCX) stock price. Tucows' stock price has risen 1799% since January 1, 2012. The S&P 500 has risen 87% over the same period. (Click on chart to expand.)
This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.
Incremental Contribution from Domain Services (Before Taxes and Other Expenses) (Click on chart to expand.)
Incremental Contribution from Ting (Before Taxes and Other Expenses) (Click on chart to expand.)
Tucows EBITDA Per Quarter (Click on chart to expand.)
Tucows Net Income Per Share Per Quarter (Click on chart to expand.)

Financial Documents

Original financial documents are available at:

Net Revenue: Quarterly Net Revenue Increased 55% YOY

Tucows announced on May 9, 2017 that net revenue for Q1 2017 increased 55% YOY to $69.5 million from $44.7 million for 2016.[24]

Net Income: Quarterly Net Income Decreased 45% YOY

Tucows announced on May 9, 2017 that net income decreased 45% YOY in Q1 2017 to $2.4 million, or $0.23 per share, from $4.4 million, or $0.42 per share for 2016.[25]

EBITDA: Quarterly Adjusted EBITDA Decreased 15% YOY

Tucows announced on May 9, 2017 that Adjusted EBITDA Q1 2017 decreased 15% YOY to $6.1 million from $7.3 million for 2016.[26]

EBITDA: Tucows Reiterates Adjusted EBITDA Guidance of $42 million for 2017

Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that Tucows is "able to reiterate our guidance of $42 million, which is the $50 million, less $8 million of the impact from deferred revenue, that I've discussed on previous calls."

In answer to a question from Hubert Mak concerning the $8 million revenue adjustment, Noss stated that "maybe a cleaner way to think about it is that it's, that $8 million revaluation of deferred revenue balances washes out overwhelmingly. Kind of 90-something-percent of it washes out in a year, so you don't see that impact going forward. In other words, the growth in 2018 will be as if that never happened."

"The total impact of deferred revenue sort of on the balance sheet, is $4.8 million. Now $1.4 million of that comes from purchase accounting, which the SEC allows us to connect to adjusted EBITDA. The other $3.4 million is a resetting of the deferred revenue balances, which as of May of 2016, the SEC does not like, related to adjusted EBITDA."

"So you'll see us talk about those numbers differently. So of the $8 million that comes from the changes in deferred revenue balances due to accounting policies in relation to the transaction, $1.4 million of that we -- it's okay for us to connect to adjusted EBITDA and $6.6 million of that, we should not connect to adjusted EBITDA. So that totals to $8 million and that's kind of the $50 million going to $42 million. I won't even ask you if that made sense, because I doubt it did. I'll ask you to maybe digest it, listen to me say it again on the transcript or on the recording and watch the video. And I apologize for this being so complicated. Believe me, it's not my choice."

In answer to a question from Patrick Retzer, Noss clarified that "the significant majority, $4.8 million of $8 million of the impact from deferred revenue was in the first quarter. So you not only have sort of the business growing underneath, as the rest of the year plays out, you also have succeedingly smaller impacts from the deferred revenue. And those impacts in total in the next three quarters are still only about two thirds of what the impact is in this first quarter. The other thing is, I don't -- I want to be clear on the language. This is -- the $8 million is impact on the deferred revenue balances on the balance sheet, It is noncash, but it's not an expense per se in the same way. When you use the phrase, transaction expense, I didn't want anybody to get in their heads that it was deal costs or anything along those lines."[27]

EBITDA: Net Income and Adjusted EBITDA for Q1 Are Tough to Read

Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that the accounting for both Enom and RingPlus would make Q1 tough to read. "I noted that in relation to the Enom acquisition, there would be a deferred revenue impact of roughly $8 million in 2017. We have worked through the details and that number is pretty close to what we expected. The largest impact is in this quarter. The impact of the accounting treatment of deferred revenue impacted adjusted EBITDA by roughly $4.8 million this quarter. We note, that this impact is on adjusted EBITDA as we used it prior to May 2016. In addition, there were about $400,000 in deal costs this quarter."[28]

EBITDA: The eNom Acquisition Has a Large Impact on our Numbers

Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that the Enom acquisition activity has a large impact on the numbers. "On January 20, Tucows acquired Enom, a wholesale domain name registrar from the Rightside Group for a purchase price of $83.5 million. The Enom business adds approximately $15 million in gross margin, less additional direct costs, which we hope to expand to $20 million over the next couple of years through additional synergies. In total, we are now managing 24 million domains under the Tucows and Enom accreditations and another 5.5 million domains on behalf of other registrars. I will remind you that this transaction was overwhelmingly about generating scale and realizing efficiencies, primarily in platform efficiencies and licensed software. Based on trends over the last few years, the Enom customer base will likely negatively impact profit margin, gross margin growth and renewal rates."[29]

Marketing: Marketing Expense Increased $800,000 YOY

Dave Singh told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that "marketing expenses increased by $800,000 year-over-year, primarily for the acquisition and ongoing support of Ting Mobile and Ting Internet customers. Credit card processing fees, primarily to support the growth of Ting Mobile and Ting Internet, public listing and stock-based compensation, increased by 0.2 million." [30]

Expenses: Total Operating Expenses for the Quarter were up 72% YOY

Dave Singh told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that "marketing expenses increased by $800,000 year-over-year, primarily for the acquisition and ongoing support of Ting Mobile and Ting Internet customers. Credit card processing fees, primarily to support the growth of Ting Mobile and Ting Internet."[31]

Capex: Capex Will Be Less Than $30 to $35 million for 2017

In answer to a question from Hubert Mak, Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that Capex will "be less than $30 million, $35 million, and the primary reason is because governments, municipal governments are just a little slower than we might expect. We have to build up our expertise at estimating their timelines. And I think we kind of had a little bit of happy years maybe in a couple cases and that'll slow down the spending. But I'm going to give you some more detail on that next quarter."[32]

May 9, 2017: Ting Mobile Had Their Best Quarter Ever of Net Adds

Number of Ting Mobile Customers (Click on chart to expand.) Note: In Q1 2017 Ting Mobile migrated over 45,000 RingPlus accounts, 22,000 of which accepted Ting Mobile's terms of service and provided a valid credit card and set up an account.
Gross Additional Customers Per Quarter (Click on chart to expand.) Note: In Q1 2017 Ting Mobile migrated over 45,000 RingPlus accounts, 22,000 of which accepted Ting Mobile's terms of service and provided a valid credit card and set up an account.
Chart 6: Churned Customers Per Quarter (Click on chart to expand.)
Net Additional Customers Per Quarter (Click on chart to expand.) Note: In Q1 2017 Ting Mobile migrated over 45,000 RingPlus accounts, 22,000 of which accepted Ting Mobile's terms of service and provided a valid credit card and set up an account.

Net Adds: Ting Mobile Added 5,500 Accounts and 12,000 Devices Outside of the RingPlus Deal

Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that Ting Mobile had a solid quarter of organic growth. "We added 5,500 accounts and 12,000 devices outside of the RingPlus deal that I mentioned in the last call. It was our best quarter for net adds in four quarters; our best quarter for gross adds in six quarters; and our most gross adds ever in a Q1. It was also the third straight quarter of increasing growth."[33]

Churn: Churn Has Decreased to 2.27%

Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that churn was 2.27% in Q1, down from 2.4% in Q1, 2016. "Churn on Ting Mobile has been a pleasant surprise ever since we reduced data prices in December of 2016. Again, without RingPlus, which will complicate churn numbers for a while, churn was 2.27% in Q1, down from 2.4% in Q1, 2016. It is encouraging that more customers are coming to Ting and fewer customers are leaving us, as the incumbents have started pushing their unlimited data plans."[34]

Comcast Threat: The Entry of Comcast into the Mobile Space Will Be a Significant Threat

Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that the entry of Comcast into the mobile space is obviously a significant threat "but we just keep hearing two things from Ting customers and prospects. First, Ting customers and hopefully millions like them, do not need unlimited data; and second, they're thrilled to spend even less than these unlimited plans cost. And in addition, customer experience matters. Customer experience and customer relationships continue to be our greatest advantages over the mobile carriers. And Comcast's entry into the category should hardly change that. It is also encouraging that most of the lifts we saw in adds versus previous quarters, came through attributable sources. In other words, things we have done and things we can track. We like that because it means we can potentially do more of these things."[35]

Marketing: Ting Mobile Had a Range of Small Wins in Digital Marketing Programs

Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that Ting Mobile had a range of small wins in digital marketing programs such as Google AdWords, acquisition e-mail, retargeting, Facebook advertising and affiliate marketing programs with a handful of strategic partners. "We also funneled leads more aggressively to our phone sales team and saw increased conversions there. On all of these, we are testing and optimizing to discover just how much we can scale within our desired cost per acquisition."

In answer to a question from Hubert Mak, Noss clarified that "there was one other relatively speaking larger effort, which was something of a mixed media effort geared toward seniors, and that really didn't bear fruit. But it's the kind of, sort of bets, we're trying to make. And then, we're always talking about on the call, where we did see some reasonable traction, is in a bunch of the little things. So think about this as just doing a bunch of little things, a little bit better. I've talked a couple times on the call about sort of rebuilding some folks on the people side in marketing. And we're just seeing some of that take hold. So I don't think it's anything complicated, I just think it's a little more and a little better people doing a little more and a little better."[36]

Marketing: The Next Round of Testing of the Infomercial Had Mixed Results

Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that the Ting Mobile infomercial is not quite a winner that we are ready to scale or a loser that we are ready to give up on. "I mentioned last quarter, that we would be engaging in the next round of testing for the infomercial. We did that in April and are still picking through the prospects and performance now. It is not quite a winner that we are ready to scale or a loser that we are ready to give up on. We are mostly focused on conversion, and we'll keep searching for incremental improvements. There were things that were improved and things that still need to be improved. Work continues."

In answer to a question from Hubert Mak, Noss clarified that "I would say that the infomercial is a larger strategy as opposed to a key strategy, because it's all important. But we call out those larger ones, because we're spending more money on them and we want to let you follow along more easily. So there's no change in strategy. With the infomercial, we did a second round of testing. There was plenty we liked, and plenty we could see that we could still work on. So it's not there yet, It may not get there. It's not there yet, but there's still plenty of encouraging signs in there. And so we're going to go to the next round of testing. And I'll let you know exactly when that's going to be, either on the next call I'll tell you how that went, or I'll let you know when it's going to be."[37]

RingPlus: 8,500 RingPlus Accounts Have Now Paid Some Portion of a Bill Out of Their Own Pockets

Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that Ting Mobile "migrated over 45,000 RingPlus accounts, 22,000 of which accepted our terms of service, gave us a valid credit card and set up an account. Of those, about 3,500 departed even before the end of the quarter. So combining the organic growth and the RingPlus customers, Ting Mobile added 24,000 accounts and 35,000 devices in Q1 to bring our total to 175,000 accounts and 280,000 devices. I will add, through last week, just over 14,000 of those RingPlus accounts are still active. And of those 14,000, about 8,500 have used their credits and have now paid some portion of a bill out of their own pockets."

"As a reminder, RingPlus was a Sprint MVNO that was shutting down in Q1. We came to an agreement with RingPlus and Sprint to migrate all their customers to our platform. I will also remind you that these are among the most frugal and transient customers in the industry and that a significant majority of them were paying nothing for service at RingPlus. However, we were very willing to invest introductory service credits and a lot of hard work in customer service and across the business in order to find the valuable customers within that base."

In answer to a question from Hubert Mak, Noss clarifed that "we were told by the parties that there were 80,000 accounts. It turned out that probably something like 35,000 of them were dormant or were people moving things from one plan to another or just were irrelevant. So then, when Sprint did the migration to our platform, they moved 45,000 accounts onto our platform. Before we let them manage those accounts on our platform, they had to come in, agree to our terms of service, they either had to just immediately port out, go somewhere else and port out, or agree to our terms of service, give us a valid credit card and set up an account, which is kind of just, set it up with name, rank and serial number. So 45,000 were migrated to our platform, 22,000 and change went through that three step process."[38]

RingPlus: Ting Mobile Has Almost Broken Even With the RingPlus Customers

Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that Ting Mobile has "nearly broken even already on these customers, between the revenue we have collected from them and the cost of goods that we have paid to the carriers. Of course, we hope we have added a significant number of accounts that will behave like typical Ting accounts in monthly margin and churn going forward. But at the very least, we are pleased that we will likely have a positive return on the investment. And I would like to note that when looking at Q2 net adds, the continued churn from RingPlus customers will have an impact."[39]

RingPlus: Ting Mobile Expects Significantly More Churn from the RingPlus Accounts

In answer to a question from Hubert Mak, Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that Ting Mobile expects there to be significantly more churn with the RingPlus customers. "We're seeing that in the first few weeks as that continues to burn down. We do expect to see more churn. So that will impact the Q2 numbers as well. And we're going to continue to make it nice and easy to see, here's what's organic and here what's RingPlus."[40]

Apple: Ting Mobile Has Signed its own Carrier Deal with Apple

Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that after 5 years of trying to get them to return our phone calls, Ting Mobile has signed its own carrier deal with Apple. "First, this is a remarkable testament to our brand reputation and our business success. It gives us something that only network operators and a very small handful of MVNOs have. More importantly, it delivers tremendous benefits for our customers. Ting will now offer the iPhone with a Ting SIM right in the box, rather than sending folks elsewhere to try to find the appropriate model. Ting will always have the latest iPhone, the moment it is available for preorder. Ting will now offer AppleCare+ service and 24-month financing on all new phone models. Ting will now procure certified used iPhones directly from Apple. Ting will also get the Apple carrier bundles on all iOS devices, which includes visual voice mail and WiFi Calling. This deal will give our customers better phones, better purchase terms and protection for those phones, and better experiences activating and using those phones. We will roll this out in the Ting shop and on Ting devices within the next few days."

In answer to a question from Hubert Mak, Noss clarified that "it's tough to tell how much of a burden going to the Apple Store was instead of buying from us on the website. I'm somebody who uses an iPhone with a Ting SIM in the U.S. and I really dislike not having visual voice mail. So it will be nice to have that now. I'm looking forward to that carrier pack dropping. Should that impact? Yes, I think that should have a little impact. And then we'll see. There's a bunch of those little things in there, like the financing alternative, we'll see, we rolled out some financing alternatives that didn't really have much impact. Maybe with the iPhone, in particular, it will."[41]

In Many Ways It Feels Like Ting Mobile Has Truly Arrived

Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that in many ways, it feels like Ting Mobile has truly arrived. "Our carriers send us acquisition prospects, Apple likes us, and customers increasingly turn to us as a credible, sustainable alternative to major carrier plans and major carrier experiences. Most importantly, net adds are trending up through improvement in both gross adds and churn."

"In Ting Mobile, we've continued the trends of increasing core net adds with continued improvement in both gross adds and churn. We have sorted through a number of tactics that will hopefully continue to bear fruit. We were also able to successfully digest the RingPlus customer base and have it perform roughly in line with what we hoped for. And after 5 years, we are now one of the very few MVNOs to have a direct relationship with Apple to sell the iPhone, a real tribute to how you're seen in the market. With the OpenSRS business, we had our strongest quarter for organic growth in the last number of years."[42]

May 9, 2017: Ting Internet Continues its Progress

Charlottesville: Ting Internet Continues to See Growing Adoption in Serviceable Neighborhoods in Charlottesville

Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that Ting Internet continues to see growing adoption in serviceable neighborhoods and we continue to expand our network to neighborhoods where preorders are waiting.

"We are also just now lighting up our third apartment building of over 200 tenants."[43]

Westminster, Holly Springs: Ting Internet Has Been Giving Westminster and Holly Springs a Lot of Attention in Recent Months

Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that Ting Internet has been been giving Westminster and Holly Springs a lot of attention in recent months. "Q1 saw the beginning of increased activations in Westminster, where the town has expanded its network and Holly Springs, where we are aggressively building out. The experience and people that we have acquired in Charlottesville have been crucial to helping these towns start to ramp. But each town requires some of its unique, own unique efforts on staffing, government relations, public relations and more. Having three very active Ting towns, now also allows us to use our centralized systems and processes, looking far ahead to a future where could have numerous Ting towns. So as examples, we've been improving the way we provision and monitor accounts, the way we schedule and track installs and more. As I've always said, the Internet business includes a lot of elements that will always be hyper-local, like awareness building and trench digging. But we are identifying every opportunity for centralization and automation and readying ourselves to scale more efficiently."[44]

Holly Springs: Perhaps Ting Fiber Will Expand Out to Neighboring Communities to Holly Springs

In answer to a question from Patrick Retzer on the chatter that that perhaps Ting fiber will expand out to neighboring communities around Holly Springs, Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that "with any fiber build, there tends to be some fiber envy in contiguous areas. And I'd be surprised if in general, when we're in a fiber footprint, we wouldn't be expanding in some direction outside of it, as we have completed the build in that market."

"So where the efficiency would come from there would be in leveraging the -- really two things, the staff that are on the ground in that city and some of the brand awareness and just sort of word-of-mouth that you'll build up and reputation from being already in the area."[45]

Sandpoint, Centennial: Sandpoint and Centennial Are Still Hard at Work on Their Municipal Core Fiber Networks

Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that Sandpoint, Idaho, and Centennial, Colorado, are still hard at work on their own municipal core fiber networks. "We will share more as we get closer to being able to build out off these networks and start lighting up customers there."

"We haven't even put a shovel in the ground in Centennial and Sandpoint," said Noss in answer to a question from an unidentified analyst clarifying that the 20% penetration in the first year does not apply to the entire 85,000 households in the four Ting towns.[46]

Enterprise: Ting Internet Has Hired Leadership for an Enterprise Sales Team to Work Across all our Ting Towns

Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that Ting Internet has hired leadership for an enterprise sales team to work across all our Ting towns. "They'll be working closely with our product, support, network and operations teams, to develop a high-end feature set, account management capabilities, and a Service Level Agreement that puts us in a position to support large businesses, hospitals, college campuses, schools, government buildings, and more."

"I remind you that most fiber businesses start with enterprise, anchor tenants, MDUs and greenfield builds. We have started with true fiber to the home and then work our way up to the more profitable opportunities."[47]

Expansion: Ting Internet's Pipeline of New Potential Ting Towns Remains Full

Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that Ting Internet's pipeline of new potential Ting towns remains full. "We're excited about opportunities of all different sizes and shapes. We feel like we are being courted more than we are courting. We are also dealing with governments, which tends to take time."[48]

Expansion: Our Best Guess is Ting Internet Will Have Two or Three New Markets in 2017

In answer to a question from Patrick Retzer, Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that "if I had to make a best guess, I think two to three [new fiber markets] would be about right. But again, I'll stress, we've got lots of work to do, it's what we have on our plate. And I'm quite fine if we don't announce anything. And there's lots of action out there, and so it could even be 3, 4, 5."[49]

Google: Google Backing Away From Fiber Doesn't Really Affect Ting Internet

In answer to a question from Patrick Retzer, Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that "it's such a big market, and Google had such big halo, that I don't know that, that [Google backing away from new fiber markets] will necessarily have a material impact. It's not, in any way, like Boy, we're pleased that Google Fiber is limited now to the 11 markets they're in and not expanding further. We really believe that in the case of fiber to the home, a high tide rises all boats and we would love to see more players in the space, not less."[50]

Adaption: Ting Internet's Core Assumptions and Metrics on Cost and Adaption Remain Valid

Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that Ting Internet's "efforts so far on the ground have helped reinforce the core assumptions and metrics that I have shared on the Ting internet business. We expect to see 20% adoption amongst serviceable addresses in a year and 50% in five years. At these take rates we will be paying about $2,500 to $3,000 per customer and those customers will be worth about $1,000 a year in margin."

In answer to a question from an unidentified analyst, Noss clarified that the 20% penetration in the first year does not apply to the entire 85,000 households in the four Ting towns. "No, what you've done there is you've applied 20% to the 85,000. The 85,000 is a complete footprint build for the 5 cities that we've have announced. We haven't even put a shovel in the ground in Centennial and Sandpoint. We won't be, we'll, I'll be updating in some detail across the other 3 markets. But that's not, those are different things. And again, I want to reiterate just for people listening, less so for you, [Ralph], when I put out that 85,000 number, it was to help people understand that even with the 5 markets that we've announced today, there was a lot of meat on the bone, so the purpose of putting out that number. I will, again, start to update a little bit more next quarter on the serviceable addresses, et cetera. And we continue to be comfortable with that 20% first year take rate number."[51]

Cost: Cost Reductions for Fiber Installation are Really Incremental

In answer to a question from an unknown analyst on the possibility of getting the cost down to $2,000 to $2,500 per home if Ting Internet moves into contiguous cities, adds automation and uses some of the learning on the trench digging side, Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that the cost reductions are really incremental. "I think that one of the things, and I don't know this, but I wouldn't be surprised if one of the things that discouraged Google was the, you can't -- a home costs to build what it costs to build. There are some savings, but they are smaller. I think that, that's a number that we're consistently looking at. We have found some neat ways to save money on a per home basis. We find that experience is helping us. But -- and I do want to, when I talk about that $2,500 to $3,000, that's a lit home, so at 50%. So we think about $1,000 to $1,400, plus the install to build a home. You're not going to get that $1,000 down to $500. And if you're in a geography, the range there is because of the different costs in each geography. If you're in a geography where it's costing you $1,200 and you can get down into the lower $1,100s or into the high $1,000s, you're doing fantastic. So we're always looking for ways there, and we're finding those ways, but they are grinding for sure."[52]

May 9, 2017: Domain Services Has Doubled in Size with the Acquisition of eNom

eNom: eNom Integration Has Gone Very Well This Quarter

Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that "the Enom integration has gone very well this quarter, with the heaviest lifting on the operational integration and on converging their data behind us; with pleasant surprises on the people side and most importantly, with the business itself comfortably meeting expectations and holding some interesting opportunities that we had not counted on."

Dave Singh clarified that Enom's operations have only contributed to Tucows' results since January 20, 2017. "Second quarter will be the first time our results reflect the full quarter of contribution from Enom."[53]

eNom: Tucows Expects Cost Savings from the eNom Acquisition Four to Eight Quarters Out

Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that Tucows expects cost savings from integration to be mostly four to eight quarters out. "We will continue to operate Enom and OpenSRS as distinct reseller brands and see the businesses as complementary and affording us the benefit of increased market coverage. We have started to integrate the teams from Seattle and Toronto and continue to be pleased, even in these first few months, with the skills and knowledge that the Enom team brings to the entire organization."

In answer to a question from Ralph Garcia with Echelon Wealth Partners, Noss clarified that "it will take 8 quarters to get from -- to get the extra $5 million or so, in cost synergies that we expect. So that will strictly be about building the new platform, building a new platform, and migrating their existing book of business onto it and thereby reducing a bunch of costs. Most of those costs will come from data center footprints and commercial software licenses that we'll avoid."

"So first of all, we'll be learning. The businesses had different approaches to data and so we're rationalizing some of that stuff. But we generally think of their businesses on the wholesale side, their business as being slightly lower margin, slightly lower renewal rate, and kind of a longer-tail profile customer."[54]

Wholesale: For the Combined Wholesale Unit, Total Registrations were $4.5 million

Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that for this combined wholesale unit, total registrations were $4.5 million in the quarter with approximately half coming from Enom and the Melbourne IT domains acquired in April 2016.[55]

OpenSRS: Total Registrations Excluding the Two Acquisitions Grew 10% YOY

Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that for the legacy OpenSRS business, or the resellers prior to the two acquisitions, we had our strongest quarter in a while, with total registrations growing 10% year over year.

In answer to a question from Ralph Garcia with Echelon Wealth, Noss clarified that the growth in OpenSRS was pleasantly surprising. "The growth there, I think it exceeded even some of the folks working on it who were quite optimistic. I think it came generally from some of the larger customers, who were just engaging in successful activities. It wasn't any one customer. But that growth, the outsized portion of that growth, was concentrated in between five and 10 customers and there's enough there that I'm hopeful, so I'm not going to quite take up my expectations on that business. But I'll certainly be pushing it a little more. And we'll see if some of those people can keep it up."[56]

The Combined Renewal Rate Declined to 74%

Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that the combined renewal rate declined to 74% in the quarter, still well above the industry average, but deflated a bit by the Enom domains, which renew at a lower rate.[57]

Retail Domains Has Effectively Doubled with the Addition of eNom Retail Customers

Elliot Noss told analysts during the 2017 first quarter earnings conference call on May 9, 2017 that on the retail side, the business has effectively doubled with the addition of the Enom retail customers. "Again, we acquired a mature retail business and customer base with slightly negative growth characteristics. While the Hover business continues to grow, combining the Hover and Enom customers into a larger single retail business will significantly suppress that growth as we look ahead to 2018. In Q1, that combined retail business represented 400,000 transactions, over 350,000 customers and an 81% renewal rate. Again, for both wholesale and retail, I will report on the aggregated businesses going forward. I will only pull out particular metrics or stories on particular brands, if they meaningfully impacted the results or signal some new strategic direction or contain some other important piece of information."[58]

May 5, 2017: Tucows Makes New Closing High of 62.10

Stock Price Chart for TCX from January 1, 2012 through May 5, 2017. In February, 2012, Tucows launched Ting, a mobile virtual network operator (MVNO). Ting's launch coincided with a rise in Tucows (TCX) stock price. Tucows' stock price has risen 1916% since January 1, 2012. The S&P 500 has risen 86% over the same period. (Click on chart to expand.)

Tucows made a new closing high of 62.10 on volume of 76,778 shares traded. Tucows is up 76.19% YTD. In February, 2012, Tucows launched Ting, a mobile virtual network operator (MVNO). Ting's launch coincided with a rise in Tucows (TCX) stock price. Tucows' stock price has risen 1916% since January 1, 2012. The S&P 500 has risen 86% over the same period.

May 2, 2017: Why Rightside Sold eNom to Tucows

Ever since Tucows announced that they had purchased eNom from Rightside on January 20, 2017, people have been wondering why Rightside made the sale. Even one of Rightside's biggest stockholders said it was a bad deal for Rightside and the market agreed as Tucows' stock price jumped 25% after the sale while Rightside showed a more modest gain.

Andrew Alleman wrote in Domain Name Wire on May 2, 2017 that the reason that Rightside sold eNom to Tucows is that Namecheap has always been a big part of eNom’s business and when new TLDs came out, Namecheap started registering many of these domain names under its own registration accreditation. Then, in January, 2017, Namecheap started registering .com domains through its own accreditation which means that Rightside was about to show a big drop in revenue in Q1 of this year. That's when Rightside moved to sell eNom. "It found a willing buyer in Tucows," writes Allemann. "On stage at NamesCon, Tucows CEO Elliot Noss said he was aware that Namecheap was moving off the platform. But that doesn’t hurt the deal from Tucows’ perspective." According to Alleman, Namecheap had negotiated very low rates with Rightside because it was so big and if you measure your business on revenue growth as Rightside does then losing Namecheap was a big loss. In Tucows’ case, however, it hopes to add about $20 million EBITDA/year from the business so losing Namecheap shouldn’t negatively impact that because it was so low margin.[59]

Read more about the history of the sale of eNom to Tucows at:

May 1, 2017: TCX Makes New Closing High of 59.75

Tucows stock (TCX) rose 1.10 to make a new closing high of 59.75 on volume of 46,744 shares. Tucows is up 69.50% YTD from 36.45 on January 3, 2017.

April 28, 2017: Ting's Project in Westminster is One of the Nation’s Most Closely Watched Public-Private Fiber Partnerships

Ting Fiber's Project in Westminster is One of the Nation’s Most Closely Watched Public-Private Fiber Partnerships. The approaches that small communities to get fiber take vary widely, and many are still in their early stages. But it’s the public-private partnership between Ting and Westminster that experts are watching most closely these days. "The city of Westminster has struck a deal with Ting that, it hopes, will result in a citywide network of fiber-optic connections to every home and business," writes Vock. Photo: Westminster Main Street by John Dawson Flickr Create Commons Attribution-NoDerivs 2.0 Generic (CC BY-ND 2.0)

Governing Magazine published a long article by Daniel C. Vock in their May issue about the different approaches small and medium cities are using to form public-private partnerships to bring high-speed Internet to their communities. According to Vock small cities face a conundrum. On one hand, building and running a city-owned network is extremely difficult because they often don’t have employees with the technological expertise to run an Internet service. On the other hand, as their experiences with cable and phone companies show, cities have learned they can’t rely solely on the private sector to provide high-speed connections. That’s why so many cities have turned to public-private partnerships, using a mix of public resources and private know-how to achieve what neither sector could do on its own.

According to Vock, the approaches that small communities take to get fiber vary widely, and many are still in their early stages. But it’s the public-private partnership between Ting and Westminster that experts are watching most closely these days. "The city of Westminster has struck a deal with Ting that, it hopes, will result in a citywide network of fiber-optic connections to every home and business," writes Vock. "Under the terms of their public-private partnership, the city is laying all the fiber itself, which Ting is then paying to lease for customers, whom it is responsible for signing up and serving. The more fiber the city installs, the more customers Ting can reach. The more customers Ting signs up, the more the company pays the city."

The effort to bring higher-quality Internet access to the Maryland city started more than a decade ago, and the city considered all options, even the idea of installing and offering broadband on its own. Ultimately, it decided to partner with a private provider. Westminster had a few advantages that helped make it more attractive. For one, the city had enough cash on hand to fund a small pilot project. And Westminster found that businesses in town were very excited about getting the service. More than 90 percent of companies signed up when it became available to them. One of the things that distinguishes Westminster’s approach is that the city is building and keeping control over the physical fiber network. The strategy, says Councilman Robert Wack, who has worked extensively on the issue, is “perfect for municipalities. We are in the long time-horizon business,” he says. “We build water treatment plants that have a useful life of 40 years. We dump millions of dollars into pavement and nobody bats an eye because everybody understands how important good roads are for economic development. Why would building fiber be any different? We’re basically building a road for data.”

For Ting, selecting cities to work with comes down to both objective measures, like demographic data, and subjective judgments, like how easy a city is to work with. One thing that stood out about Westminster, says Monica Webb, the company’s director of government relations, was that the town was not just eager for service but also willing to do most of the hard work of financing and then installing the fiber all the way up to buildings. But Webb cautions that there are not enough private companies like Ting to partner with all the cities that want high-speed Internet. After the Westminster deal went through, Ting received more than 2,000 requests from residents or public officials to come to other communities. Currently, Ting serves just five cities, with a few more in the works. “Sometimes, the best thing cities can do is to do it themselves,” she says. “There needs to be a plan B.”

Even if private companies bring gigabit speeds to every big city in the country, they’d never be a viable solution for getting faster Internet to the small towns and rural communities that need upgrades the most concludes Vock. That’s why so many cities have turned to public-private partnerships, using a mix of public resources and private know-how to achieve what neither sector could do on its own.[60]

April 26, 2017: TCX Breaks 60 Intraday

TCX broke 60.00 on April 26, 2017.

April 24, 2017: Tucows Makes New Closing and Intraday Highes

Tucows Makes New Closing and Intraday Highes. Tucows made a new closing high of 58.35 and a new intraday high of 59.90 on a volume of 69,715 shares traded. The previous closing high was 58.15 on April 20, 2017 and the previous intraday high was 59.4 on April 21, 2017. Click on chart to enlarge.

Tucows made a new closing high of 58.35 and a new intraday high of 59.90 on a volume of 69,715 shares traded. The previous closing high was 58.15 on April 20, 2017 and the previous intraday high was 59.4 on April 21, 2017.

Tucows made another new closing high of 59.00 on April 25, 2017.

April 20, 2017: Tucows CEO Elliot Noss Speaks about Giga-bit Fiber at Charlottesville's Tom Tom Founders Festival


Ting Internet has been proudly sponsoring Charlottesville's Tom Tom Founders Festival since we first arrived in town. This year, Tucows CEO Elliot Noss, was invited to speak on a panel discussing what fiber internet can do for a city. Joining him is Mayor Andy Berke of Chattanooga, the city to watch for how the best Internet access improves cities; Sheila Dugan of GovEx at Johns Hopkins University and Aimee Meacham of the National Telecommunications and Information Administration. The panel discussion was moderated by Deb Socia of Next Century Cities.

April 20, 2017: TCX Reaches New All Time Closing High of 58.15

Tucows reached a new closing high of 58.15 on April 20, 2017.[61]

April 19, 2017: Centennial Seeks Voting Members for Fiber Commission

Village Publishing reported on April 19, 2017 that the City of Centennial is seeking two qualified citizen voting members to serve on its Fiber Commission, which was established to oversee FiberWorks. Centennial’s fiber backbone will connect and complete the city’s underground fiber infrastructure, connecting to key sites and community anchor institutions, such as schools, libraries and public safety. The two voting members must be Centennial residents and will be appointed at large, meaning they will represent the citizens throughout the city. To be considered for appointment, applicants should: Demonstrate expertise in a field relevant or associated with the purposes and goals of Centennial FiberWorks; Commit to attending commission meetings twice a month, periodic City Council meetings and other occasional community meetings; Be clear of potential conflicts of interest or the appearance of impropriety on commission action; Affirm motivation for seeking the appointment. Members will serve terms of two years and no more than four terms and will spend at least 10 hours per month, which includes a minimum twice-monthly meetings and the review of information prepared by staff.[62]

April 17, 2017: FCC Could Issue New Rules to Help Google Fiber Compete with ATT

Ars Technical reported on April 17, 2017 that the Federal Communications Commission is considering rules that would speed up the process of attaching wires to utility poles making it easier for Google Fiber and companies like Ting Internet to quickly complete utility pole work. Current FCC rules allow for up to a five-month waiting period before new ISPs can install wires on utility poles that already hold the wires of incumbent providers like ATT. The FCC's current five-month timeline for processing pole attachment requests includes 45 days for application review and engineering surveys, 14 days for cost estimates, 14 days for "attacher acceptance," and another 60 to 75 days for the "make ready" work of moving existing wires. The new FCC proposal from Chairman Ajit Pai could shave a couple of months off the maximum waiting periods. "Google Fiber is pleased the Commission is taking up the issue of pole attachment timing," the Alphabet-owned ISP said in FCC filings last week. Google Fiber offered what it called "minor edits" to fix some inaccurate descriptions of the current rules in the FCC's draft proposal, it but didn't suggest any major revamping.

Pai's pole proposal is part of a larger plan titled "Accelerating Wireline Broadband Deployment by Removing Barriers to Infrastructure Investment." A vote on this notice of proposed rulemaking is scheduled for April 20. There would then be a public comment period before the FCC decides whether to issue final rules. The entire rulemaking process will probably take at least a few months. "[A]ttaching Internet-related equipment to utility poles is a major cost element for companies of all sizes," Pai wrote. "We’ll seek to both lower costs for and speed deployment of this equipment."[63][64]

April 14, 2017: Elliot Noss Speaks about “What Can the Gig Do For Your City” at Hometown Summit in Charlottesville

Next Century Cities reported on April 14, 2017 that Tucows CEO Elliot Noss participated in a panel on "What Gig Can Do for Your City" at the Hometown Summit during Tom Tom Founders Festival in Charlottesville, VA as they discussed how and why cities invest in fiber internet and municipal broadband. Others on the panel included Deb Socia (Executive Director, Next Century Cities), Mayor Andy Berke (Chattanooga, TN), Sheila Dugan (Senior Implementation Advisor, Cities, Center for Government Excellence at Johns Hopkins University), and Aimee Meacham (Director of External Affairs, BroadbandUSA, NTIA). “I have seen first hand the incredible benefits, such as economic and job growth, better education, and telehealth opportunities, that bringing gigabit speed service has had on Next Century Cities’ member communities,” Deb Socia said. “Mayors are uniquely able to understand and execute broadband deployment plans that fit their communities’ needs, and as such should be given the tools necessary to make sure everyone is digitally included.”[65]

April 10, 2017: Ting is Strongly Opposed to Selling Consumer Browsing Data

According to the Electronic Frontier Foundation, despite massive backlash from the American people, Congress passed and President Donald Trump signed into law a resolution that repeals the Federal Communications Commission (FCC) rules to protect consumers from privacy invasions by their Internet service providers (ISPs) like Comcast, AT&T, Verizon, and Time Warner Cable. The rules—which codified and expanded on existing online privacy protections—were passed by the FCC in October of last year and set to go into effect later this year. They would have kept ISPs from selling customers’ data and using new invasive ways to track and deliver targeted ads to customers. Additionally, the rules would have required those companies to protect customers’ data against hackers.[66]

The Denver Post reported on April 10, 2017 that Ting stands strongly opposed to erasing broadband privacy protections and will not be selling consumer browsing data to anyone. "That’s why we took a stand asking Congress to keep the consumer privacy rule,” said Monica Webb, who handles Ting’s government relations. “Is this (Trump’s repeal) going to change anything? No, we’re holding to our terms of customer service, regardless that this allows us to do otherwise.” According to Ting’s privacy policy, the company may use cookies and web beacons to track how users interact with its website. Plus, it partners with a third-party ad network that uses technology to “collect non-personally identifiable information” about a person’s activities on its site. “Essentially our Terms of Service are specific in the way that ‘everything that is not mentioned is not permitted,'” Webb said.[67]

April 7, 2017: TCX Makes All Time Closing High of 54.10

Chart of TCX from April 6, 1996 to April 10, 2017: TCX Makes All Time Closing High of 54.10. TCX closed at an all time high of 54.10 on April 7, 2017 up 1.70 from the previous day's close. Tucows' previous closing high was 21 years ago on April 6, 1996 on its first day of trading when the stock opened at 57 and closed at 53 on a volume of 406,000 shares. Click on chart to enlarge.

TCX closed at an all time high of 54.10 on April 7, 2017 up 1.70 from the previous day's close. Tucows' previous closing high was 21 years ago on April 6, 1996 on its first day of trading when the stock opened at 57 and closed at 53 on a volume of 406,000 shares.

Tucows continued with a new closing high of 55.5 on April 10, 2017.

Tucows continued with another new closing high of 57.65 on April 11, 2017.

Tucows reached a new closing high of 57.85 on April 13, 2017.

Tucows reached a new closing high of 58.15 on April 20, 2017.[68]

April 6, 2017: Google Moves Two Top Executives Off Fiber Project

Bloomberg reported on April 6, 2017 that Google has removed two prominent executives Milo Medin, a vice president at Access, and Dennis Kish, a wireless infrastructure veteran who was president of Google Fiber, from its Google Fiber division, the latest sign of the business pulling back from ambitious, expensive goals. A Google veteran since 2010, Medin was a chief advocate for the company’s high-speed Fiber service in Washington. He has also been leading some of Alphabet’s more experimental efforts to tap wireless spectrum for better internet delivery. It’s unclear if that effort will move to another part of Alphabet. Google pushed to bring Fiber to more than a dozen U.S. cities but it hit some hurdles, including increased competition and legal challenges from telecommunications firms. Google Fiber also grew into one of the costliest efforts for the company, outside of the dominant Google internet business. After halting its expansion, some analysts praised Alphabet for implementing cost-cutting measures. Last month, Google Fiber canceled some planned installations in Kansas City, its first market.[69]

April 5, 2017: Ting Internet is Hiring an Enterprise Strategic Account Manager

The Ting Blog reported on April 5, 2017 that Ting Fiber is hiring an Enterprise Strategic Account Manager (ESAM) working out of Centennial who will be responsible for selling data, cloud and video services to new and existing customers as well as creating and developing long-term relationships with new and existing customers in the Enterprise and Mid-market space. This is a hunter, consultative field sales position within Ting's Business Services team that will report to the Director, Enterprise Sales. "While we are stretching our fiber to homes and small businesses that pay us $89 and $139 a month respectively, we are literally passing by enterprises, apartment buildings, schools, hospitals, city buildings and other large organizations that would gladly pay us thousands," reads the post. The candidate should have over 4 years of B2B sales experience, preferably selling data, voice, cloud and/or video solutions with ideally two years of Telecommunications or Premise Based Voice and Data product sales and have a working knowledge of computers, computer networking, Internet solutions and fiber connected networks.[70]

March 24, 2017: Kenneth Schafer is Stepping Down as Tucows' Chief Information Officer

Domain Name Wire reported on March 24, 2017 that Tucows has issued an 8-K announcing that Kenneth Schafer is stepping down effective today as Chief Information Officer at Tucows to pursue another opportunity and his resignation is not a result of any dispute or disagreement with the Company.[71] Schafer served as Executive Vice President, Chief Information Officer at Tucows since September 2, 2016, having previously served as Executive Vice President, Products since 2009. Schafer joined Tucows in 2006 as VP Marketing. Prior to joining Tucows, Schafer worked as an independent strategic Internet consultant for eight years.[72]

March 22, 2017: While Shooting a Commercial in Centennial, the Ting Team Enjoyed the Experience of Flying Over the Mountains in a Chopper


The Ting Video Team is always looking for interesting ways to showcase Ting Internet towns. Last time, they rented a hot air balloon. This time, while shooting a commercial in Centennial, they enjoyed the experience of flying over the mountains in a chopper. For some of the team, the helicopter ride was an experience that can now be crossed off the ol’ bucket list.

March 20, 2017: Tucows Insiders Sell Stock

Market Exclusive reported on March 20, 2017 that David John Woroch , EVP of Tucows sold 5,000 shares of the company’s stock at an average price of 49.02 for a total transaction amount of $245,100.[73]

Gissin Erez sold 7,300 shares of Tucows stock at $47.00 on March 14, 2017 for a total of $343,100.

The Cerbat Gem reported on February 17, 2017 that Director Rawleigh Hazen Iv Ralls sold 30,000 shares of Tucows stock at an average price of $46.85, for a total transaction of $1,405,500.00 in a transaction on February 14, 2017. Following the completion of the sale, the director now owns 188,647 shares of the company’s stock, valued at approximately $8,838,111.95.[74]

Sports Perspectives and Market News reported on February 22, 2017 that Director Allen Karp sold 2,650 shares of Tucows stock at an average price of $42.52 for a total value of $112,678.00 in a transaction that occurred on February 21, 2017.[75]

March 17, 2017: Dave Singh to Succeed Michael Cooperman as Tucows CFO

Dave Singh to Succeed Michael Cooperman as Tucows CFO. Singh joined the Tucows Finance team in February 2016 and brings nearly two decades of audit and public company financial experience. Photo: Tucows

Reuters reported on March 17, 2017 that following an 18 year career with Tucows, chief financial officer Michael Cooperman will retire at age 65 effective April 1, 2017 and will remain with company in a senior advisory role to ensure a seamless transition. Tucows Board of directors has appointed Dave Singh to succeed Cooperman.[76]

"Mike and I have had a strong and fruitful working relationship for a number of years," said Tucows President and CEO, Elliot Noss. "When Mike started in 1999, the goal was to see if we could monetize shareware distribution. Last month, we purchased an $80 million company and laid miles of optical fiber. We simply could not have had the success we have had without him. I am forever grateful for his partnership, wisdom and grit and for helping and supporting me when I most needed it. I am also very grateful that Mike has made it his responsibility to hand-pick, train and oversee his successor. As a result, we enter the Dave Singh era with the same confidence we have enjoyed for the past 18 years." "My career at Tucows has been a rewarding and enriching experience," said Cooperman. "The Company is in a strong position to continue growing and driving value for investors, and I am confident that Dave will continue to build on this momentum as CFO."[77]

Singh joined the Tucows Finance team in February 2016 and brings nearly two decades of audit and public company financial experience. Prior to joining Tucows, Singh spent 8 years at KPMG in Vancouver primarily focused on public company audits in the technology field. After KPMG, Singh joined TELUS and held a number of roles, including Director – TELUS Financial Reporting & Analysis, Director – Consumer Retail and most recently CFO of the TELUS International, TELUS’ outsourcing division. Telus is a Canadian national telecommunications company that provides a wide range of telecommunications products and services including internet access, voice, entertainment, healthcare, video, and IPTV television. The company is based in the Vancouver, British Columbia area; it was originally based in Edmonton, Alberta, before its merger with BCTel in 1999. Telus's wireless division, Telus Mobility, offers HSPA+, and LTE-based mobile phone networks. Telus is the incumbent local exchange carrier in British Columbia and Alberta. Telus had Revenue of CAD$ 12.5 billion in 2016, Operating income of 2.3 billion (2015), Net income of 1.38 billion and 47,700 employees.

Singh is a Chartered Professional Accountant with the Institute of Chartered Accountants of BC. Singh is a graduate of the Transportation and Logistics Management program from the Sauder School of Business at the University of British Columbia and holds a joint Executive MBA from Schulich School of Business and Northwestern University. "Having previously worked at a large bureaucratic company, I love the agility and can-do attitude of each and every Tucows employee. I come to work excited every day knowing I'll be challenged and have fun."[78][79]

March 15, 2017: Bloomberg Says Tucows is Roaring Back with eNom Acquisition, Ting Mobile, and Ting Fiber

Gerrit De Vynck wrote at Bloomberg on March 15, 2017 that Tucows is roaring back to life with an acquisition and a deepening effort to win over disgruntled U.S. mobile phone customer after a decade-long hibernation following the dot-com crash. According to Bloomberg, business is booming as ICANN, the nonprofit gatekeeper of web addresses, opens up hundreds of new domain names, giving individuals and companies the chance to have a web address that ends in something more creative than “.com” or “.org,” like “.beer” or “.Republican.” “It is a hyper-competitive market with extremely thin margins but we were early and we have had scale since nearly the beginning,” said Chief Executive Officer Elliot Noss. When someone buys a web domain for $15, most of it goes to regulators and registries. Tucows gets $1.20 to $1.40 per transaction, Noss said. Tucows also agreed in January to acquire long-time rival eNom from Rightside Group Ltd. for $83.5 million, consolidating its place as the main wholesaler of internet domains.

But, according to Bloomberg, Tucows' big bet on future growth is building out high-speed fiber networks in five mid-sized U.S. cities. The company plans to invest between $30 million and $35 million in the business in 2017 and that number will grow in the coming years, Noss said. Ting Fiber is going after U.S. consumers dissatisfied by the internet service provided by cable TV companies, which sometimes have near-monopolies over certain regions. “We have two businesses that generate a lot of capital, we’re happy to deploy it there,” Noss said referring to Tucows' domain wholesale business and Ting Wireless, a cell-service provider with 170,000 customers that rents space on T-Mobile US Inc. and Sprint Corp.’s networks, and re-sells it to consumers with its own customer service and billing practices.

Tucows recently expanded its credit revolver from $75 million to $140 million to fund the eNom acquisition. Still, the company’s leverage ratio is low and Noss said he’s open to pushing it as high as three times net-debt to ebitda if the right acquisition target came along. “We have a lot of power in our balance sheet,” Noss said. “We would look at anything in our spaces at the right price.”[80]

March 15, 2017: Fuquay-Varina Hopes That Ting (or Someone Else) Will Begin Extending Branches Off the Holly Springs Backbone into Fuquay-Varina Residential Districts

Fuquay-Varina Hopes That Ting (or Someone Else) Will Begin Extending Branches Off the Holly Springs Backbone into Fuquay-Varina Residential Districts. Fuquay-Varina is hoping that once its full network is live, Ting or other third-party internet providers such as AT&T and Google will take notice and begin extending branches off the backbone into Fuquay-Varina residential districts. Click Graphic to Enlarge. Graphic: Hugh Pickens using Google Maps

The News and Observer reported on March 15, 2017 that throughout the past year, Fuquay-Varina has been working to ensure that the wave of high-speed fiber internet moving into other parts of Wake County soon will be able to take hold in Fuquay-Varina. Fuquay-Varina’s neighbor to the north, Holly Springs, has been able to leverage its municipal fiber network into a partnership with internet provider Ting, which is now providing high-speed internet service to certain neighborhoods in Holly Springs. According to the News and Observer, Fuquay-Varina is hoping that once its full network is live, Ting or other third-party internet providers such as AT&T and Google will take notice and begin extending branches off the backbone into Fuquay-Varina residential districts.

The immediate purpose of Fuquay-Varina’s network, though, is to service municipal government buildings, where Town Manager Adam Mitchell said employees need gigabit speeds to efficiently send massive mapping files and other large datasets back and forth. Fiber-optic lines offer speeds at least 10 times faster than what’s available along standard copper internet cables. “We also like the idea of having a reliable backbone and network to service our facilities and our needs,” Mitchell said. “Having infrastructure that we can maintain, that we can service, that we have security in, for us, has great value.”[81]

Fuquay-Varina is a town in Wake County, North Carolina, United States. The population was 17,937 at the 2010 census,[1] up from 7,898 at the 2000 census. The town is a 25-minute drive south of Raleigh, the capital of North Carolina. The hyphenated name attests to the town's history as two separate towns. Fuquay Springs and Varina merged in 1963 to create the modern town. Economically, the town initially grew due to tobacco trade and agriculture, but has seen recent population growth and real estate development due to its proximity to Research Triangle Park.[82]

March 10, 2017: The Centre Region of Pennsylvania Has Fallen Behind its Peers in Fiber Optic Internet

Mark Parfitt wrote in an op-ed piece in the Centre Daily Times on March 10, 2017 about how the deployment of publicly accessible fiber-optic internet is one movement where State College has fallen behind many peers. "Where we have fallen even further behind is the ability to provide fiber internet as part of a broader economic development strategy.," writes Parfitt. "Make no mistake: fiber-optic internet is no longer a luxury in the business world. It is a basic necessity and an absolute “must have” when selling the Centre Region as a place to do business. After gigabit internet was introduced to Chattanooga, Tenn., the founder of a business incubator told the New York Times that 'it created a catalytic moment' and 'allowed us to attract capital and talent into this community that never would have been here otherwise.'"

According to Parfitt, the competition to become a fiber community is fierce and instead of asking fiber suppliers why we need them, we need to proactively communicate why State College is a good contender for a fiber town. "For example, Ting, a gigabit internet supplier that recently wired the college community of Charlottesville, Va., won’t spend time convincing towns “why” they should prioritize fiber. Ting’s website argues that communities should 'be coming to the discussion with the sense that crazy fast-fiber internet is a thing they need in order to keep pace.'"

"Now is the time to explore how we can best develop and deploy our own gigabit internet," concludes Parfitt. "Centre Region leaders have proven capable of uniting across municipal lines to improve other regional infrastructures. The same can be done with fiber-optic internet."[83]

March 10, 2017: Tucows Hosts Third Annual Ting Open StarCraft 2 Competition in San Jose

The Ting Blog reported on March 10, 2017 that Ting will host the finals of Season 3 live of the Ting Open alongside BaseTradeTV in San Jose, California on March 25 and 26. "The four StarCraft 2 semi finalists will compete live at the Corsair headquarters on March 25 and 26. This tournament will be open to the public, so if you live in the area or would like to take a weekend trip to watch some of the best StarCraft 2 players in the world compete face to face, come join us!" The Ting Open Season 3 finals will be streamed live from twitch.tv/basetradetv.[84]

March 10, 2017: Ting Team Holds Community Information Night About Fiber Internet in Centennial

The Ting Blog reported on March 10, 2017 that the Ting Team is hosting a Community Information Night about fiber Internet in Centennial at Smoky Hill Library on March 23, 2017. "If you have questions about Ting Internet or would like to learn more, this is an event you don’t want to miss out on," says the announcement. "The team will be on hand to give a short presentation followed by an opportunity to ask us questions. We’ll be kicking things off at 7pm and wrapping things up at 9pm. Light refreshments will be served. Admission is free, so feel free to bring your friends and neighbors! Please RSVP on our event page."[85]

March 8, 2017: Tucows Files Annual Report with SEC

Tucows Files Annual Report with SEC. Photo: Thomas Hawk Flickr Creative Commons Attribution-NonCommercial 2.0 Generic (CC BY-NC 2.0)

On March 8, 2017 Tucows filed its annual report with the SEC.[86] The following highlights from the report provide insights into Tucows' strategy, management, and operation:

Source of Revenue from Ting Internet: "The Company also derives revenue from the sale of fixed high-speed Internet access (“Ting Internet”) in select towns including Holly Springs, North Carolina; Westminster, Maryland; and Charlottesville, Virginia. Our primarily sales channel of Ting Internet is through the Ting website. The primary focus of Ting Internet is to provide reliable Gigabit Internet services to consumer and business customers. We also derive revenue from providing Internet hosting and network consulting services to business customers in Central Virginia through our acquisition of a 70% share in Ting Virginia, LLC on February 27, 2015."
Employees: "As of December 31, 2016, we had approximately 375 full-time employees. None of our employees are currently represented by a labor union. We consider our relations with our employees to be good."
Risk Factors in Fiber Investments: "We have invested and expect to continue to invest in new fiber to the home (“FTTH”) deployments in select markets in the United States. The investments are a reflection of our ongoing efforts to build FTTH network via public-private partnerships in communities we identify as having strong, unmet demand for FTTH services. Such FTTH investments may involve risks and uncertainties, including: insufficient revenues from such investments in the short and medium term to offset any new commitments assumed and expenses associated with these new investments; inadequate return of capital on our investments; inability to obtain the appropriate technical and operational resources; and unanticipated local or federal regulatory changes that could cause us to fail to realize the anticipated benefits of such investments. Because these new FTTH deployments are inherently risky, no assurance can be given that such investments will be successful and will not adversely affect our financial condition and operating results."
Seasonality: "During the summer months and certain other times of the year, such as major holidays, Internet usage often declines. As a result, many of our services (OpenSRS, Hover and Ting) may experience reduced demand during these times. For example, our experience shows that new domain registrations decline during the summer months and around the year-end holidays. Seasonality may also affect advertising, which may have a slight impact on advertisement-based revenue. These seasonal effects could cause fluctuations in our financial results. For Ting Mobile, we see increased gross activation and churn activity in late summer as part of back-to-school activities as well as the holiday season in December."
Competitors: "Our competitors may be divided into the following groups: • US Mobile Phone Service providers such as AT&T, Verizon, T-Mobile and Sprint, who primarily compete with Ting Mobile Services. • US Broadband providers such as Comcast, Verizon and CenturyLink, who primarily compete with Ting Internet Services. • Retail-oriented domain registrars, such as GoDaddy and Web.com who compete with our Reseller customers in Wholesale Domain Services and with Hover. • Wholesale-oriented domain registrars, su ch as GoDaddy, who market services to resellers such as our customers. • Wholesale Email Service providers, such as Google, Microsoft, Bluetie and MailTrust."
Competitive Advantages in Network Services: "We believe the primary competitive factors in our Network Access Services are: • Providing superior customer service experience • Providing a simple and friendly user experience through more usable web and application interfaces and more fair and transparent pricing; • Being agnostic on telephony and internet hardware, including phones and network routers; and • Providing superior technology, speed and reliability with fiber to the home services"
Branding: "In recognition of the evolving nature of the internet services market and to make it easier to clearly differentiate each service we offer from our competitors, we enhanced our branding by focusing our service offerings under four distinct brands namely “OpenSRS”, “YummyNames”, “Hover” and “Ting”. We also believe that maintaining and enhancing the “Tucows” corporate brand and our service brands is critical to expanding our customer base. We anticipate that, as our market becomes increasingly competitive, maintaining and enhancing our brands may become increasingly difficult and expensive. Maintaining and enhancing our brands will depend largely on our ability to be a technology leader providing high quality products and services, which we may not do successfully. To date, we have engaged in relatively little direct brand promotion activities. This enhances the risk that we may not successfully implement brand enhancement efforts in the future."
Risk Factors from Debt Service Obligations: "In January 2017, we amended and increased our existing credit facilities to $140 million from $60 million in order to complete the acquisition of eNom. As of March 3, 2017, our outstanding debt under our credit facility was $97.7 million. Our ability to generate cash flow from operations to make principal and interest payments on our debt will depend on our future performance, which will be affected by a range of economic, competitive and business factors as well as changes in government monetary or fiscal policy. If our operations do not generate sufficient cash flow to satisfy our debt service obligations, we may need to seek additional capital to make these payments or undertake alternative financing plans, such as refinancing or restructuring our debt, selling assets or reducing or delaying capital investments and acquisitions. We cannot assure you that such additional capital or alternative financing will be available on favorable terms, if at all. Our inability to generate sufficient cash flow from operations or obtain additional capital or alternative financing on acceptable terms could have a material adverse effect on our business, financial condition and results of operations."
Volatility of Stock Price: "Our share price has varied recently and the price of our common stock may decrease in the future, regardless of our operating performance. Investors may be unable to resell their common stock following periods of volatility because of the market ’s adverse reaction to this volatility. The following factors may contribute to this volatility: • actual or anticipated variations in our quarterly operating results; • interruptions in our services; • seasonality of the markets and businesses of our customers; • announcements of new technologies or new services by our company or our competitors; • our ability to accurately select appropriate business models and strategies; • the operating and stock price performance of other companies that investors may view as comparable to us; • news relating to our industry as a whole; and • news relating to trends in our markets. The stock market in general and the market for Internet-related companies in particular, including our company, has experienced volatility. This volatility often has been unrelated to the operating performance of these companies. These broad market and industry fluctuations may cause the price of our common stock to drop, regardless of our performance."
Corporate Culture: "We believe that a critical contributor to our success has been our corporate culture, which we believe fosters innovation, creativity and teamwork. As our organization grows and we are required to implement more complex organizational management structures, we may find it increasingly difficult to maintain the beneficial aspects of our corporate culture. This could negatively impact our future success."
Real Property: "We do not own any real property. Our principal administrative, engineering, marketing and sales office totals approximately 26,900 square feet and is located in Toronto, Ontario under a lease that expires on December 31, 2020. In addition, we also maintain offices of approximately 14,100 square feet in St Catharines, Ontario, approximately 11,200 square feet in Charlottesville, Virginia, approximately 5,000 square feet in Holly Springs, North Carolina, approximately 4,000 square feet in Starkville, Mississippi, approximately 2,900 square feet in Bonn, Germany and a satellite office in Westminster, Maryland. Substantially all of our computer and communications hardware is located at our facilities or at server hosting facilities in Toronto, Ontario and Ashburn, Virginia."
Legal Proceedings: "We are involved in various investigations, claims and lawsuits arising in the normal conduct of our business, none of which, in our opinion, will materially harm our business. We cannot assure you that we will prevail in any litigation. Regardless of the outcome, any litigation may require us to incur significant litigation expense and may result in significant diversion of management attention."
2017 Stock Buyback Program: "On February 28, 2017, the Company' s Board of Directors authorized the repurchase of up to $40 million of the Company's common stock at the Company's discretion. The new $40 million buyback program commenced on March 1, 2017 and will terminate on or before February 28, 2018. Purchases for this program will be made exclusively through the facilities of the NASDAQ Capital Market. All shares purchased by the Company under this program will be retired and returned to treasury. Repurchases under this program may have included open market purchases, block trades or a combination of such methods. The number of shares purchased and the timing of the purchases depended on a number of factors, including share price, trading volume and general market conditions, working capital requirements, general business conditions, financial conditions, any applicable contractual limitations and other factors, including alternative investment opportunities. The Company may suspend or discontinue the repurchases at any time, including in the event the Company would be deemed to be making an acquisition of its own shares under Rule 13e-3 of the Exchange Act. Subject to applicable securities laws and stock exchange rules, all purchases will occur through the open market and may be in large block purchases. The Company does not intend to purchase its shares from its management team or other insiders."
2016 Stock Buyback Program: "On February 9, 2016, the Company announced that its Board of Directors had approved a stock buyback program to repurchase up to $40 million of its common stock in the open market. Purchases were made exclusively through the facilities of the NASDAQ Capital Market. The stock buyback program commenced on February 10, 2016 and terminated on February 9, 2017. The Company repurchased 308,416 shares under this program during the year ended December 31, 2016 for a total $7.2 million."
2015 Stock Buyback Program: "On February 11, 2015, the Company announced a stock buyback program. Under this buyback program, the Company could repurchase up to $20 million of the Company's common stock over the 12-month period that commenced on February 11, 2015. The Company repurchased 868,549 shares under this program during the year ended December 31, 2015 for a total of $20.0 million."
Revenue from Ting Internet: "High speed Internet access, Internet hosting and network consulting services generated $3.7 million in revenue during Fiscal 2016, up $0.5 million from Fiscal 2015. Growth in High speed Internet access revenues was as a result of the increased Ting Internet footprint in Charlottesville, VA in Fiscal 2016. We expect expansions in Westminster, MD and Holly Springs, NC to contribute to revenue in 2017. Increased access revenues were partially offset by ongoing declines in legacy revenues from hosting and network consulting services."
Loan Repayments on Stock Repurchases, Acquisitions, and FTTH Capital Expenditures: "In accordance with the terms of the 2016 Credit Facility, Facilities A, B and C accrue interest and standby fees at variable rates based on borrowing elections by the Company and the Company’s Total Funded Debt to EBITDA ratio. Facility A is for general working capital and general corporate requirements. It requires interest only monthly payments and a final principal payment due upon maturity of the 2016 Credit Facility. The purposes of Facility B and C are to support share repurchases, acquisitions and capital expenditures associated with the Company’s FTTH program. Under the repayment terms for Facilities B and C, the amortization periods are based on the purposes of the loan as follows: borrowings for share repurchases are repaid over four years, borrowings for acquisitions are repaid over five years and borrowings for FFTH capital expenditures are repaid over seven years."
Opportunities, Challenges, and Risks: "As a MVNO our Ting service is reliant on our Mobile Network Operators ("MNOs") providing competitive networks. Our MNOs each continue to invest in network expansion and modernization to improve their competitive positions. Deployment of new and sophisticated technology on a very large scale entails risks. Should they fail to implement, maintain and expand their network capacity and coverage, adapt to future changes in technologies and continued access to and deployment of adequate spectrum successfully, our ability to provide wireless services to our subscribers, to retain and attract subscribers and to maintain and grow our subscriber revenues could be adversely affected, which would negatively impact our operating margins. Ting has also enjoyed rapid growth in its first four years of operation. During this growth phase we have been able to continue to grow gross customer additions and maintain a consistent churn rate, which has allowed us to maintain net new customer additions despite the impact of churn on a fast growing customer base. We expect price competition to grow more intense in the industry which could result in increased customer churn or reductions of customer acquisition rates either of which could result in slower growth rates or in certain cases, our ability to maintain growth. The communications industry continues to compete on the basis of network reach and performance, types of services and devices offered, and price. The increased competition in the market for Internet services in recent years, which we expect will continue to intensify in the short and long term, poses a material risk for us. As new registrars are introduced, existing competitors expand service offerings and competitors offer price discounts to gain market share, we face pricing pressure, which can adversely impact our revenues and profitability. To address these risks, we have focused on leveraging the scalability of our infrastructure and our ability to provide proactive and attentive customer service to aggressively compete to attract new customers and to maintain existing customers. Substantially all of our Domain Services revenue is derived from domain name registrations and related value-added services from wholesale and retail customers using our provisioning and management platforms. The market for wholesale registrar services is both price sensitive and competitive and is evolving with the introduction of New gTLDs, particularly for large volume customers, such as large web hosting companies and owners of large portfolios of domain names. We have a relatively limited ability to increase the pricing of domain name registrations without negatively impacting our ability to maintain or grow our customer base. Growth in our Domain Services revenue is dependent upon our ability to continue to attract and retain customers by maintaining consistent domain name registration and value-added service renewal rates and to grow our customer relationships through refining, evolving and improving our provisioning platforms and customer service for both resellers and end-users. In addition, we also generate revenue through pay-per-click advertising and the sale of names from our portfolio of domain names and through the OpenSRS Domain Expiry Stream. The revenue associated with names sales and advertising has recently experienced flat to declining trends due to the uncertainty around the implementation of ICANN ’s New gTLD Program, lower traffic and advertising yields in the marketplace, which we expect to continue. From time-to-time certain of our vendors provide us with market development funds to expand or maintain the market position for their services. Any decision by these vendors to cancel or amend these programs for any reason may result in payments in future periods not being commensurate with what we have achieved during past periods. Sales of domain names from our domain portfolio have a negative impact on our advertising revenue as these names are no longer available for advertising purposes. In addition, the timing of larger domain names portfolio sales is unpredictable and may lead to significant quarterly and annual fluctuations in our Portfolio revenue. Our revenue is primarily realized in U.S. dollars and a major portion of our operating expenses are paid in Canadian dollars. Fluctuations in the exchange rate between the U.S. dollar and the Canadian dollar may have a material effect on our business, financial condition and results from operations. In particular, we may be adversely affected by a significant weakening of the U.S. dollar against the Canadian dollar on a quarterly and an annual basis. Our policy with respect to foreign currency exposure is to manage our financial exposure to certain foreign exchange fluctuations with the objective of neutralizing some or all of the impact of foreign currency exchange movements by entering into foreign exchange forward contracts to mitigate the exchange risk on a portion of our Canadian dollar exposure. We may not always enter into such forward contracts and such contracts may not always be available and economical for us. Additionally, the forward rates established by the contracts may be less advantageous than the market rate upon settlement."
Acquisition of eNom: "On January 20, 2017, the Company, through its indirect wholly owned subsidiary, acquired all of the issued and outstanding capital stock of eNom, Incorporated, a domain name registrar business, from the Rightside Group, Ltd. The purchase price was $83.5 million in cash, less an estimated net working capital adjustment of approximately $6.8 million and other customary adjustments. Concurrent with the acquisition, the Company entered into an Amended Credit Agreement to, among other things, reduce the existing non-revolving Facility C from $40 million to $35 million, and establish a non-revolving credit facility of $85 million of which approximately $84.5 million was drawn to fund the acquisition, working capital deficit and related transaction costs. The Amended Credit Agreement provides the Company with access to an aggregate of $140 million in funds. Under the amended credit agreement, the Company has agreed to comply with the following financial covenants at all times, which are to be calculated on a rolling four quarter basis: (i) maximum Total Funded Debt to EBITDA Ratio of 3.00:1 until September 30, 2017, 2.50:1 until September 30, 2018 and 2.25:1 thereafter; and (ii) minimum Fixed Charge Coverage Ratio of 1.20:1. Further, the Company's maximum annual Capital Expenditures cannot exceed $32.8 million per year, which limit will be reviewed on an annual basis. In addition, funded share repurchases are not to exceed $20 million, or up to $40 million so long as the total loans related to share repurchases do not exceed 1.5 times of trailing twelve months EBITDA. The amended credit agreement also provides for an additional interest rate tier if the Company exceeds a 2.25x funded debt to adjusted EBITDA ratio and repayment terms remain unchanged for the existing facilities with the new non-revolving credit facility having a repayment term of five years with equal quarterly repayments commencing in second quarter of 2017."
Acquisition of Additional Stake in Ting Virginia: "On February 1, 2017, the Company exercised its call option to purchase an additional 20% ownership interest in Ting Virginia, LLC for consideration of $2.0 million."
Director Nomination: "Our Corporate Governance, Nominating and Compensation Committee is responsible for identifying potential nominees to our Board of Directors. In considering candidates for nomination, our Corporate Governance, Nominating and Compensation Committee seeks individuals who evidence strength of character, mature judgment, career specialization, relevant technical skills or financial acumen, diversity of viewpoint and industry knowledge. As set forth in the charter of our Corporate Governance, Nominating and Compensation Committee, our Board of Directors endeavors to have directors who collectively possess a broad range of skills, expertise, industry and other knowledge and business and other experience useful to the effective oversight of our business. In addition, our Board of Directors also seeks members from diverse backgrounds so that our Board of Directors consists of members with a broad spectrum of experience and expertise and with a reputation for integrity. In determining whether to nominate a current director for re-election, our Corporate Governance, Nominating and Compensation Committee will take into account these same criteria as well as the director ’s past performance, including his or her participation in and contributions to the activities of the Board of Directors. 76 Our Corporate Governance, Nominating and Compensation Committee will evaluate and consider recommendations for director candidates from shareholders using the same criteria described above. As set forth in the charter of the Corporate Governance, Nominating and Compensation Committee, recommendations submitted by the Company ’s shareholders shall be submitted, along with the following to the attention of the Chairperson of the Corporate Governance, Nominating and Compensation Committee at 96 Mowat Avenue, Toronto, Ontario M6K 3M1 Canada at least 120 days before the first anniversary of the date on which we first mailed our proxy materials for our prior year’s annual meeting of shareholders: • the name and address of the recommending shareholder; • the candidate ’s name and the information about the individual that would be required to be included in a proxy statement under the rules of the SEC; • information about the relationship between the candidate and the recommending shareholder; • the consent of the candidate to serve as a director; and • proof of the number of shares of our common stock that the recommending shareholder owns and the length of time the shares have been owned."

March 3, 2017: Ting Considers Bringing Fiber-optic Internet Service from Charlottesville to Crozet

Ting Considers Bringing Fiber-optic Internet Service from Charlottesville to Crozet. Ting has yet to announce formal plans to run fiber to Crozet, but rumors are circulating. “Ting is planning to pull fiber to Crozet,” wrote Mark McCardell, a member of the Parkside Village Homeowners’ Association, addressing other Crozet residents via neighborhood social networking site Nextdoor.com. “Many in our neighborhood have already paid the $9 to pre-order. The more people that express interest, the greater the incentive for them to pull the fiber out to Crozet.” Ting Internet vice president of networks Adam Eisner said nothing has been decided. Graphic: Hugh Pickens from Google Maps. Click on Graphic to expand.

The Crozet Bulletin reported on March 3, 2017 that Ting has yet to announce formal plans to run fiber to Crozet, but rumors are circulating. “Ting is planning to pull fiber to Crozet,” wrote Mark McCardell, a member of the Parkside Village Homeowners’ Association, addressing other Crozet residents via neighborhood social networking site Nextdoor.com. “Many in our neighborhood have already paid the $9 to pre-order. The more people that express interest, the greater the incentive for them to pull the fiber out to Crozet.” Ting Internet vice president of networks Adam Eisner said nothing has been decided.

“The acquisition of BRI put us into the Charlottesville area and since then the goal has been to cover as much of the city in fiber as we can. That said, as we continue to build up Charlottesville, we’ll be looking at customer interest in surrounding areas, and Crozet checks off a lot of the boxes that are interesting to us in terms of evaluating markets.," said Eisner. “On the customer side of things, we’ve worked with a lot of HOA’s in the Charlottesville area that got our attention basically by generating interest on the ground-level. While some companies are very specific about the metrics they need to move into a given area—for instance, Google says they need 20 percent in x or y neighborhood or they’re not coming—we don’t do that. Instead, what we do is take $9 pre-orders, which serves as a barometer to gauge people’s interest.” While Eisner refrained from setting a specific number, he said that a strong level of preorders would indicate it was worthwhile for Ting to invest in the expensive process of running fiber down Route 250 and into Crozet. “We have a unit that’s dedicated to working with HOA’s on bringing service in, so if the interest is there, that would be the place to begin,” he said.[87]

March 3, 2017: Ting Fiber's Adam Eisner Discusses the Advantages of Fiber

The Crozet Bulletin reported on March 3, 2017 on Adam Eisner, Ting Internet vice president of networks, discussing what fiber-optic service can do. “So, I’ll start with saying this is the fastest Internet you could possibly get,” said Eisner. “Fiber is essentially a transformative technology—in other words, having a gigabit completely changes what you can do at home or work.” Imagine a future where, despite four kids gaming online, Netflix streaming in the back bedroom, a video conference taking place in mom’s home office, high-resolution photos uploading, dad in the kitchen making a Google Home grocery list—so on and etc.—there’s never any lag-time or buffering, ever, with uploads next to instantaneous. “Fiber allows the possibility for increasing connectivity between devices in the home, because data is no longer an issue,” added Eisner. “You could have 20 or 30 devices all running at once and no matter how many you have everything happens immediately… Like autonomous cars in the realm of transportation, this technology is going to absolutely revolutionize what’s possible in a household.”[88]

March 1, 2017: Tucows Announces $40 Million Stock Buyback Program

Tucows announced on March 1, 2017 that that its Board of Directors has approved a stock buyback program to repurchase from time to time up to $40 million of its common stock in the open market. The new $40 million buyback program will commence March 1, 2017 and will terminate on or before February 28, 2018. Purchases for the new $40 million buyback program will be made exclusively through the facilities of the NASDAQ Capital Market. All shares purchased by Tucows under the stock buyback program will be retired and returned to treasury. The timing and exact number of common shares purchased will be at Tucows’ discretion and will depend on available cash and market conditions. Tucows may suspend or discontinue the repurchases at any time, including in the event Tucows would be deemed to be making an acquisition of its own shares under Rule 13e-3 of the Securities Exchange Act of 1934, as amended. Subject to applicable securities laws and stock exchange rules, all purchases will occur through the open market and may be in large block purchases. Tucows does not intend to purchase its shares from its management team or other insiders. The purchase will be funded from available working capital and existing credit facilities. As of March 1, 2017, Tucows had 10,469,406 common shares outstanding.[89]

March 1, 2017: Centennial, CO - A Great Town Deserves Great Internet


Centennial, Colorado knows all about starting something: A business. A movement. It's a place to work. To play. To raise a family.

February 27, 2017: i2Coalition to Present Internet Community Leadership Award to Tucows CEO Elliot Noss

CircleID reported on February 27, 2017 that the "Ron Yokubaitis Internet Community Leadership Award" will be presented to Elliot Noss, the Chief Executive Officer and President of Tucows, at a ceremony on May 3rd in Washington, D.C., during the closing ceremonies i2Coalition's yearly Washington, D.C. Fly-In. "Elliot has been challenging industry norms since the early days of the commercial Internet. He is one of the Internet's most effective champions for users' rights during that entire period," said i2Coalition Executive Director Christian Dawson. "Elliot sees beyond the business. He works diligently through his role at Tucows, his involvement in ICANN, and his personal efforts. He identifies important opportunities Internet infrastructure providers have to bring positive change in the world. Elliot has lobbied, agitated, and educated to promote and protect the Open Internet around the world. We are proud to have him as our Internet Community Leadership Award recipient and keynote speaker for our 2017 Fly-in event."[90]

February 21, 2017: Ting Purchases Naming Rights For Holly Springs Athletic Complex

Ting Purchases Naming Rights For Holly Springs Athletic Complex. Holly Springs unanimously approved an agreement February 7, 2017 that would allow Ting to rename the town’s $19 million North Main Athletic Complex including the facility’s 1,800-seat, multi-purpose stadium and the complex at large which has been home to the Holly Springs Salamanders, a collegiate summer league baseball team, and Wake Tech’s baseball team. As part of the agreement, the town will refer to the complex by Ting’s chosen name in all official town communications, and Ting will be able to use the facility for two company-sponsored events each year. Photo: Photo: WithersRavenel

The News and Observer reported on February 21, 2017 that Holly Springs unanimously approved an agreement February 7, 2017 that would allow Ting to rename the town’s $19 million North Main Athletic Complex including the facility’s 1,800-seat, multi-purpose stadium and the complex at large which has been home to the Holly Springs Salamanders, a collegiate summer league baseball team, and Wake Tech’s baseball team. As part of the agreement, the town will refer to the complex by Ting’s chosen name in all official town communications, and Ting will be able to use the facility for two company-sponsored events each year. The three-year contract for a total of $330,000 won’t begin until the complex’s primary sign is erected. Town spokesman Mark Andrews said he expects that process could take several months. A name like “Ting Park” is expected to be chosen, although the contract gives the company some discretion over the name while giving the town veto power if a proposed name is too unusual. Daniel Weeks, Holly Springs’ assistant town manager, said the town had considered pursuing the sale of the complex’s naming rights for the past few years. The town approached Ting about six months ago about such an agreement, he said. “Ting had some interest in getting there first,” Andrews said. “Because some people still call it SAS Soccer Park. People remember who had the name first. Like with the RBC Arena, in Raleigh – I can’t even remember what it’s called now.”[91]

February 21, 2017: Holly Springs Mayor Appreciates How Unobtrusive Ting Fiber's Installation Practices Have Been Relative to Other Fiber Service Providers

The News and Observer reported on February 21, 2017 that Holly Springs Mayor Dick Sears said he has appreciated how unobtrusive Ting’s fiber installation practices have been relative to those of other fiber service providers which have generated complaints throughout the area while laying fiber cables along residential streets. Speaking about the agreement to provide naming rights to Ting for the North Main Athletic Complex, Sears said the town wouldn’t want to burden one of its most popular facilities by associating it with an unpopular company, but he’s confident Ting’s name will continue to develop a positive connotation among residents as it builds its network in Holly Springs during the next three years. “We’ve already been out to watch how they do it compared to their competition,” Sears said. “Their tear-up is minimal. When a rival company came into our neighborhood, they tore up some of the yards pretty good. They fixed it pretty well, but not great.”[92]

February 20, 2017: Rightside Activist Investor Says eNom Was Sold to Tucows Too Cheap

Comparison of NAME and TCX Stock Performance in the Month Since Rightside Sold eNom to Tucows. J Carlo Cannell, an investor who owns 9% of Rightside, says that the $76.7 million deal to sell eNom to Tucows "marks a step in the right direction” for the company, but that he was “not satisfied” with the price or the $4 million legal fees accrued. "Conversations with management suggest that the Company took only two months to evaluate and close the transaction. Perhaps if they had been more patient and diligent, shareholders would have enjoyed more than the 0.5x 2016 revenues which they received in this 'shotgun sale'," wrote Cannell.

Domain Incite reported on February 20, 2017 that J Carlo Cannell, an investor who owns 9% of Rightside, says that the $76.7 million deal to sell eNom to Tucows “marks a step in the right direction” for the company, but that he was “not satisfied” with the price or the $4 million legal fees accrued. "Conversations with management suggest that the Company took only two months to evaluate and close the transaction. Perhaps if they had been more patient and diligent, shareholders would have enjoyed more than the 0.5x 2016 revenues which they received in this 'shotgun sale'," wrote Cannell. "This price was a fraction of Tucows’ own valuation of 2.6x 2016 estimated revenue. For the two trading sessions following the eNom transaction, NAME traded up 10% while TCX was up 32%, suggesting that investors believe it was a better deal for TCX shareholders than NAME shareholders."

Cannell said last week he has formed Save NAME Group, named after Rightside’s ticker symbol, as a means to exert pressure on the board and added that it is currently “difficult to justify” the company remaining publicly listed, and that the “sale of the entire company” or a “special and substantial dividend” could help appease shareholders.[93][94]

February 19, 2017: Sandpoint City Council Passes Resolutions on Dark Fiber Fees and a Lease Agreement with Ting Fiber

The Donner County Daily Bee reported on February 19, 2017 that the Sandpoint City Council passed resolutions for dark fiber fees, a memorandum of understanding with Bonner County concerning the fiber network backbone, and a lease agreement with Ting Fiber, Inc. for a piece of city-owned property to house network equipment. Council members also heard presentations from Ting and Intermax Networks representatives who are looking to offer service to residents in the near future. Monica Hubbard from Ting said the company officials are currently focused on planning and design, which will take about six months, after which construction will begin. During the planning and design process, the company will put out a neighborhood announcement based on its pre-order campaign. Residents can pre-order service for $9, she said, which is refundable if someone changes their mind. Neighborhoods with the highest pre-order rates are generally built first, Hubbard said. "Our goal here is to start construction, based on the neighborhoods that have the strongest demand, sometime in the summer with a goal of finishing in November," Hubbard said. "If we don't finish by November, of course, we have to go into next spring and we'd rather have it wrapped up in November."

Ting will likely use the "indefeasible right of use" cost outlined in the dark fiber pricing structure, which is a lump sum, one-time fee. IRU pricing is outlined at $3,550 per strand with a six-strand minimum. For 13 to 24 strands, the price per strand is $2,367 — a 33-percent discount — and 25 or more strands at $1,183 per strand. According to the pricing structure, Ting will be charged an annual maintenance fee of $333 for up to 24 strands, and $167 per year for 25 or more strands. The maintenance fee includes a stipulation that it can be increased or decreased every other year based on changes in actual maintenance costs.

The final resolution approved by council on the topic of fiber was the lease agreement with Ting for a portion of city-owned property at the corner of Superior Street and Ella Avenue. It was determined by city staff the location would be ideal for Ting's equipment hut because the city is not using it and because it is located along the main fiber line.[95]

February 19, 2017: Intermax May Also Provide Fiber Service in Sandpoint

The Donner County Daily Bee reported on February 19, 2017 that one other company is also interested in providing fiber service in Sandpoint. Jim Cost with Intermax said Ting is "not the only player in town" and the North Idaho-based company is also looking to provide service in Sandpoint. Intermax is located in Coeur d'Alene and, while it does not offer television packages, Cost said the company offers high speed data services, managed IT services, security services and digital voice services. Since it was founded more than 10 years ago, the company has grown to more than 3,500 customers in North Idaho. "We've been building this a long time and we continue to hope to play a big part in the growth of economic development for Sandpoint and surrounding areas," Cost said.[96]

According to their web site, Intermax Networks has built the largest independent fiber and private microwave data network in North Idaho providing internet, digital phone, transport connections, and Point-to-Point circuits connecting North Idaho to places all across Idaho and the Northwest. Their main office is in Coeur d’Alene, Idaho with offices in Sandpoint and Bonners Ferry serving Kootenai, Bonner, Boundary, and Spokane Counties. Intermax supplies more than 3,000 customers with service on a monthly basis, from individual residences to major infrastructure connections for business, government, health care and schools. Their network includes direct Intermax fiber connections to: Tierpoint in Liberty Lake, Downtown Spokane (U.S. Bank), Seattle (The Westin Fiber Hub) and other POPs around the Inland Northwest. Intermax has a staff of nearly 30 people across three offices in North Idaho and is owned and managed by North Idaho people. "We have no conflicting objectives in California or Virginia. We don’t have a corporate parent expecting us to send our earnings to New York or be small outposts for large corporate mergers."[97]

Intermax says they have built the largest independent fiber network in Northern Idaho with over 350 miles of total fiber connectivity and has fiber connections at many professional and office locations in Coeur d’Alene and Sandpoint. The Intermax network taps into the internet from three core locations with direct links to Seattle, Boise, and Denver.[98]

February 17, 2017: Directors Sell Tucows Stock

The Cerbat Gem reported on February 17, 2017 that Director Rawleigh Hazen Iv Ralls sold 30,000 shares of Tucows stock at an average price of $46.85, for a total transaction of $1,405,500.00 in a transaction on February 14, 2017. Following the completion of the sale, the director now owns 188,647 shares of the company’s stock, valued at approximately $8,838,111.95.[99]

Sports Perspectives and Market News reported on February 22, 2017 that Director Allen Karp sold 2,650 shares of Tucows stock at an average price of $42.52 for a total value of $112,678.00 in a transaction that occurred on February 21, 2017.[100]

February 16, 2017: RingPlus Drops Lawsuit Against Sprint

Prepaid Reviews reported on February 16, 2017 that RingPlus has voluntarily dropped their lawsuit against Sprint that included a number of allegations including breach of contract, extortion, trade dress infringement, patent infringement, and unfair practices and competition. The lawsuit has been dismissed with prejudice, which means that it can never be brought up again. Details on exactly what kind of deal was reached (or other reasoning for the voluntary dismissal) are not available, but it seems kind of like the death knell for this little MVNO. In the meantime, customers who have not already ported out of RingPlus will be transferred to Ting.[101][102]

February 16, 2017: Why Comcast is so Afraid of Municipal Broadband and Open Access

Karl Bode wrote at Techdirt on February 16, 2017 that for years incumbent ISPs have waged a not-so-subtle war on towns and cities looking to escape from the high prices and abysmal service of the country's broadband duopoly but now many cities have taken to either building fiber networks themselves -- or striking public/private partnerships with companies like Google Fiber or Ting/Tucows -- because the private sector has failed to deliver the service and connectivity they want at prices they can afford. That's why large ISPs like Charter, Comcast and AT&T have spent the last decade lobbying for protectionist bills across twenty different states banning local citizens from making these kinds of decisions for themselves.

For example, city-owned Huntsville Utilities has been building a fiber broadband network that should service the lion's share of the city's homes and businesses over the next few years and the network will be open access -- meaning that ISPs can come in and compete with each other over the regional infrastructure. Google Fiber has already signed up to be one of at least three ISPs taking advantage of the build, and should begin offering service there by the middle of this year. "FCC data has long noted that the open access model provides consumers with better service at lower prices, thanks to the miracle of competition," says Bode. "Obviously that's a nightmare for large ISPs used to doing the bare minimum while charging captive subscribers the absolute maximum. As such, the government consistently has treated open access networks like a plague, given that regulators and lawmakers are consistently terrified of upsetting some of the biggest campaign contributors in the country."

According to the FCC Study, "Our most surprising and significant finding is that “open access” policies—unbundling, bitstream access, collocation requirements, wholesaling, and/or functional separation—are almost universally understood as having played a core role in the first generation transition to broadband in most of the high performing countries; that they now play a core role in planning for the next generation transition; and that the positive impact of such policies is strongly supported by the evidence of the first generation broadband transition. The importance of these policies in other countries is particularly surprising in the context of U.S. policy debates throughout most of this decade. While Congress adopted various open access provisions in the almost unanimously-approved Telecommunications Act of 1996, the FCC decided to abandon this mode of regulation for broadband in a series of decisions in 2001 and 2002. Open access has been largely treated as a closed issue in U.S. policy debates ever since. Yet the evidence suggests that transposing the experience of open access policy from the first generation transition to the next generation is playing a central role in current planning exercises throughout the highest performing countries. In Japan and South Korea, the two countries that are half a generation ahead of the next best performers, this has taken the form of opening up not only the fiber infrastructure (Japan) but also requiring mobile broadband access providers to open up their networks to competitors. In leading countries like Sweden and the Netherlands, following the earlier example of the United Kingdom, regulators are addressing the complexities of applying open access policy to next-generation infrastructure by pushing their telecommunications incumbents to restructure their operations and functionally separate their units that sell access to network infrastructure from their units that sell connectivity directly to consumers. Moreover, countries that long resisted the implementation of open access policies, Switzerland and New Zealand, changed course and shifted to open access policies in 2006."[103]

"Claiming that municipal broadband is spend-crazy government run amok is a violent misread of what's actually happening in these towns and cities," concludes Bode. "Municipal broadband business plans are like any other business plan; some are good, some aren't. Ideally that should be up to the locals to decide, not billionaire CEOs and grumpy armchair partisans sitting half a world away in judgement. Municipal broadband isn't the devil, it's a genuine, grassroots, local reaction to market failure; one that can be avoided by ISPs doing one thing: actually delivering the kinds of services, prices and features locals have spent fifteen years clamoring for."[104]

February 13, 2017: Google Fiber Battles ATT in Louisville With a Mix of Fiber Optics and Fixed Wireless

Google Fiber Battles ATT in Louisville With a Mix of Fiber Optics and Fixed Wireless. AT&T Fiber is unleashing an army of employees and contractors to wire up virtually every single home in the city while Google Fiber is preparing to launch the prototype for the 2.0 version of its ultra high speed service. Combined with their ongoing lawsuit over utility pole access in Louisville, it's turning the southern city into the epicenter of the fiber broadband wars of 2017--with important implications for the future of both companies and gigabit internet across the United States.

Digital Trends reported on February 13, 2017 that in early February, the "new cities" section of the Google Fiber website quietly moved Louisville, Kentucky from its list of "Potential" cities to "Upcoming" cities, joining San Antonio, Texas and Huntsville, Alabama and setting the stage for a Battleground with ATT where Google Fiber will prototype its next generation architecture, using a mix of fiber optics for the internet backbone and fixed wireless for the last mile to connect customers. This has the potential to supercharge deployments by bypassing the hardest, slowest, and most expensive part of the process--digging ditches and climbing poles to connect cables to every single residence. Meanwhile AT&T Fiber is unleashing an army of employees and contractors to wire up virtually every single home in the city where Google Fiber is preparing to launch the prototype for the 2.0 version of its ultra high speed service. Combined with their ongoing lawsuit over utility pole access in Louisville, it's turning the southern city into the epicenter of the fiber broadband wars of 2017--with important implications for the future of both companies and gigabit internet across the United States.

Return of the Jedi

Google Fiber has had a unique connection to the city ever since Louisville Mayor Greg Fischer went to bat for Google Fiber with a "One Touch Make Ready" ordinance that gave Google Fiber (and other broadband challengers) the right to make use of public utility poles owned by providers such as AT&T. Louisville and Google argued that the move was a common sense measure to bring more broadband competition and quickly spread ultra high speed internet throughout the city. According to ZD Net AT&T took the city to court over it, and Louisville immediately morphed into an important battleground for the future of Google Fiber and broadband. In the initial Google Fiber cities, it could simply make a deal with the city and get to work. However, Louisville was more like many other US cities with a tangled web of ownership, laws, and ordinances around utilities. If Google Fiber could make it in Louisville, then it could set a precedent that could spread to other cities. "We will vigorously defend the lawsuit filed today by AT&T. Gigabit fiber is too important to our city's future," said Mayor Fischer. Google Fiber joined the lawsuit on Louisville's side, and said, "Mayor Fischer, we couldn't agree with you more, and stand with you."

Fiber-optic cable infrastructure rollout costs were also a huge impediment. Last summer, Google Fiber acquired WebPass wireless, a gigabit technology that only needs point-to-point airspace, obviating the need to dig or hang cables. Webpass wireless isn’t cost effective in terms of connecting to single homes, but it’s fine for sending data traffic between larger buildings and distribution hubs. Louisville will be Google Fiber’s first hybrid wireless and fiber-optic cable gigabit internet service city.

Google Fiber's Louisville network is going to include its wireless Webpass technology for last-mile connections to homes. While other cities where Google Fiber had already done infrastructure work--San Antonio, Huntsville, and Raleigh, North Carolina--have continued with the same technology as the original Google Fiber cities, the timing of the Louisville build (along with the One Touch Make Ready battle) has made it the perfect candidate for Google Fiber to launch the 2.0 version of its gigabit ambitions. "We are excited to bring Google Fiber to Louisville and are still figuring out the path," said a Google spokesperson. "We've made great progress working with the city and are excited to find innovative new ways to deploy superfast internet, such as One Touch Make Ready and wireless technology. We'll make a full announcement with the city at the right time."

The Empire Strike Back

Then, in August, AT&T openly mocked Google Fiber's decision to start using wireless to speed up its deployments. In a published statement, AT&T said: "Google Fiber still complains it's too hard... Meanwhile, without excuses or finger-pointing, and without presenting ultimatums to cities in exchange for service, AT&T continues to deploy fiber and to connect our customers to broadband services in communities across the country. Welcome to the broadband network business, Google Fiber. We'll be watching your next move from our rear view mirror." In March 2016, AT&T touted to the press that it was about to connect its first two subdivisions to gigabit fiber in Louisville. In July, AT&T started bragging that it was already installing gigabit fiber throughout Louisville--even as Google Fiber was getting all the hype after the One Touch Make Ready ordinance, but had yet to start its deployment. AT&T's work across the city has exploded. TechRepublic has heard from several contractors associated with AT&T that the company is bringing in more and more contractors and is working non-stop to put tons of new fiber in the area. It has told the contractors that they have to keep up or else AT&T will give the business to others who can. And, that it expects to work continuously over the next couple years bringing fiber to every corner of the city.

Final Shot

All of AT&T's moves over the past couple months in Louisville appear to indicate that the telecom giant is looking to go to war over the next generation of internet broadband. And, it views Google Fiber as its most dangerous opponent. "With the lawsuit ongoing, it's clear that this battle is getting personal." writes ZD Net. "Google Fiber is setting the stage for its comeback tour, to display its latest innovations. AT&T, on the other hand, is hoping to stamp out any energy the upstart could drum up, working hard to dig and deploy gigabit before Google Fiber arrives in Derby City. In the fight for the next generation internet, Louisville is set to be the Gettysburg of the fiber war--in the courtroom and neighborhood-to-neighborhood."[105][106]

February 17, 2017: Tucows Mentioned in the Wall Street Journal

The Wall Street Journal reported on February 17, 2017 that Roslyn Layton, a visiting fellow at the American Enterprise Institute who has studied net-neutrality practices in other countries and was part of Mr. Trump’s transition team, believes we need what she calls “soft net neutrality,” where multiple stakeholders, including both big internet companies and carriers come together and make the rules together.

Investors are proceeding with caution. “We’re assuming that net neutrality in its wired and wireless fashion is gone,” says Andy Weissman, a venture capitalist at Union Square Ventures who has been an outspoken defender of net neutrality. He’s investing in Tucows, an internet service provider that is beginning to roll out fiber in some areas. Tucows will be “pure pipes” he says, which means in the future, it could differentiate from incumbent carriers by committing to equal treatment for all data.[107]

February 12, 2017: The Future of Ting Internet at McDaniel College in Westminster

The McDaniel Free Press reported on February 12, 2017 that the biggest challenge between Ting Internet and McDaniel College in Westminster is figuring out how Ting’s service will work with McDaniel’s existing infrastructure. Seamlessly combining the two infrastructures and networks may be quite difficult. “There’s some technical challenges that both of us are looking at,” says Greg Dumont, chief information officer at McDaniel, “We want to take it slow.”

Part of what makes partnering with Ting so complicated is the nature of Westminster’s fiber internet project, a private and public partnership. Like every lot in town, the city will bring the fiber infrastructure to the edge of the campus property, but it’s up to the college what to do from there. Another problem is the volume of traffic that McDaniel would add to Ting’s network. Dumont says that Ting was originally planning on operating on a single bandwidth pipe, pushing all of their traffic together. “We were a little cautious in the beginning when the project started,” Dumont said about the single pipe, “Several thousand users will be more than they’ve ever done.” But Ting soon changed their model, showing some dedication to their possible client’s interests.

Whether or not the partnership between McDaniel and Ting will work out is somewhat contingent on how the remainder of the project continues. “It’s like entering a marriage,” says Val Giovagnoni, Ting Internet city manager for Westminster, “There’s so much that has to be discovered for Ting to be explored [with McDaniel].” For now, McDaniel community members will have to wait to see what happens between the new internet provider and their college. “It’s got to be a right fit,” Dumont added, “let’s not rush anything.” “No decision has been made today,” Giovagnoni concluded. “It’s not an overnight, we’ve got to do it right. You can’t rush good things.”[108]

February 10, 2017: How Ting Has Expanded into Holly Springs

Triangle Business Journal reported on February 10, 2017 that Ting Mobile has been connecting fiber customers in Holly Springs for about a month and its earnings call on February 7, 2017 provides insight into how the math works when it comes to implementing high-speed connections. Elliot Noss, CEO of Ting’s Canadian parent Tucows, told analysts Ting expects a 20 percent adoption among its serviceable addresses in a year and 50 percent in five years. “At these take rates, we’ll be paying about $2,500 to $3,000 per customer in CapEx and those customers will be worth about $1,000 a year in margin,” he says, adding that, in Holly Springs, pre-orders are guiding the buildout. “We’re moving quickly to convert all the [Holly Springs] pre-orders in the first few neighborhoods there into active customers,” he says.

However legacy contenders have been building up their own fiber arsenals in the background. CenturyLink continues to expand its gigabit offerings in the Triangle offering its highest-tier service plan in parts of several towns across the region, such as Wake Forest, Clayton and Pittsboro, but with some geographic limits. “All new subdivisions we build into are fiber to the home with Gigabit speeds, and the growth in our markets has been robust, so more and more fiber being added daily,” Rondi Furgason, vice president of operations, said in an email. On the other hand, Wake Forest partnered with a Salisbury firm, RST Fiber three years ago, only to have the company abandon its plans (and, in some cases, its equipment) in the town.[109]

February 7, 2017: Tucows Finishes Year With Record Revenue and Earnings

Chart 1: Stock Price Chart for TCX from January 1, 2012 through February 7, 2017. In February, 2012, Tucows launched Ting, a mobile virtual network operator (MVNO). Ting's launch coincided with a rise in Tucows (TCX) stock price. Tucows' stock price has risen 1390% since January 1, 2012. The S&P 500 has risen 80% over the same period. (Click on chart to expand.)
This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.
Incremental Contribution from Domain Services (Before Taxes and Other Expenses) (Click on chart to expand.)
Incremental Contribution from Ting (Before Taxes and Other Expenses) (Click on chart to expand.)
Tucows EBITDA Per Quarter (Click on chart to expand.)
Tucows Net Income Per Share Per Quarter (Click on chart to expand.)

Q4 References

Original financial documents are available at:

Revenue: Quarterly Revenue Increased 9% YOY

Tucows announced on February 7, 2017 that net revenue for the fourth quarter of 2016 increased 9% from Q4 2015 to $48.8 million from $44.7 million for the fourth quarter of 2015.[110]

Revenue: Annual Revenue Increased 11% YOY

Tucows announced on February 7, 2017 that net revenue for 2016 increased 11% to $189.8 million from $ 171.6 million for 2015.[111]

Net Income: Quarterly Net Income Decreased 7% YOY

Tucows announced on February 7, 2017 that for the fourth quarter of 2016 decreased to $2.8 million, or $0.27 per share, from $3.1 million, or $0.29 per share, for the fourth quarter of 2015. Net income for the fourth quarter of 2016 was negatively impacted during the quarter by one-time items totaling $1.0 million related to the Enom acquisition and the Ting Mobile business. [112]

Net Income: Quarterly Net Income Decreased from Q3

Tucows reported fourth-quarter net income of $2.8 million or 27 cents per share down from their record third-quarter profit of $4.7 million or 45 cents per share.[113]

Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that Tucows incurred some one-time expenditures totaling approximately $1 million related to the Enom acquisition and the Ting Mobile business and is still expecting to incur approximately $0.5 of additional Enom transaction related costs during the first quarter of 2017.

Noss added that "marketing expenses increased by $500,000 year-over-year, primarily for the acquisition and ongoing support of Ting Mobile and Ting Internet customers. Credit card processing fees, primarily to support the growth of Ting Mobile and Ting Internet, and contact and outside services increased by $200,000 and finally, depreciation and amortization which increased by $200,000, primary the result of our acquisition of the BRI Group in February 2015 and the acquisition of the international reseller channel of Melbourne IT in April of this year."[114]

Net Income: Annual Net Income Increased 41% YOY

Tucows announced on February 7, 2017 that for 2016 increased 41% to $16.0 million, or $1.53 per share, from $11.4 million, or $1.04 per share for 2015.[115]

EBITDA: Quarterly Adjusted EBITDA Increased 33% YOY

Tucows announced on February 7, 2017 that Adjusted EBITDA for the fourth quarter of 2016 increased to $7.3 million from $5.5 million for the fourth quarter of 2015.[116]

EBITDA: Yearly Adjusted EBITDA Increased 44% YOY Meeting Guidance

Tucows reported on February 7, 2017 that their adjusted EBITDA for 2016 was $30.13 million meeting their guidance of $30 million for the year and increased 44% YOY over the 2015 adjusted EBITDA of $20.94 million.[117]

EBITDA: Tucows is Providing Adjusted EBITDA Guidance of $50 million for 2017

Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that "we are providing adjusted EBITDA guidance for 2017 of $50 million. This is being delivered with continued solid growth expected in our Ting Mobile business, a bit of growth from our existing domains business and the addition of Enom. I will also note that this is being delivered while investing between $4 million and $5 million in the Ting Internet business on an operating level. I should note that this number is up only slightly from the investment this year which was higher than planned but not at all troubling."[118]

Capex: We Will Be Spending on the eNom Integration, Ting Internet, and Ting Mobile Customer Acquisition in 2017

Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that "there are a lot of big moving parts right now; the Enom integration, the huge opportunity represented by the Ting Internet business and some very real customer acquisition initiatives in Ting Mobile including the potential hit of credits around the RingPlus marketing transaction. We may choose to step up and spend in any of these areas. As always, we will keep you well apprised as we proceed. In terms of the transaction itself, it has been 100% financed as we have used our strong cash flows and clean balance sheet to access significant capital efficiently and inexpensively without impacting our planned capital expenditures on fiber in anyway."[119]

February 7, 2017: Ting Mobile Had 4,000 Net Adds in Q4

Number of Ting Mobile Customers Note: Ting started in February 2012. Prior to the earnings report for 2013:Q4 Tucows did not break out the number of customers or devices so the number of customers in Q1 through Q3 for 2013 is estimated. (Click on chart to expand.)
Gross Additional Customers Per Quarter (Click on chart to expand.) Note: In Q1 2016 Ting Mobile had a one-time influx of 7,000 customers, migrating from PlatinumTel Wireless, also known as PTel, that closed its doors.
Chart 6: Churned Customers Per Quarter (Click on chart to expand.)
Net Additional Customers Per Quarter (Click on chart to expand.) Note: In Q1 2016 Ting Mobile had a one-time influx of 7,000 customers, migrating from PlatinumTel Wireless, also known as PTel, that closed its doors.

Growth: Ting Mobile Had Net Adds of 4,000 Accounts and 10,000 Devices in Q4 2016

Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that Ting Mobile added over 4,000 accounts and 10,000 devices in Q3 to bring our total to 151,000 accounts and 245,000 devices. "Taking a closer look at those numbers, it was another strong quarter of growth in devices per account as more accounts moved beyond just one device. With service on multiple networks, support for just about every old and new device on the market lower data rates and even a generous relief program for early termination fees. It is getting easier and easier for families to bring every member to Ting."[120]

Churn: Ting Mobile's Churn Rate Came Down to Just Under 2.5%

Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that the fourth quarter benefited from better than expected churn at just under 2.5%. "Q4 is typically a time for increased switching throughout the category and has historically been the highest quarter for churn at Ting. That 2.5% is a welcome improvement over the 2.7% we reported in Q4 of 2015 and the 2.8% were reported last quarter. After defying seasonality for the last two quarters of the year, it seems that our data rate decrease in August has had an impact on churn. We impacted the top addressable reason why customers were leaving us and they responded almost immediately. We looked forward to a full year with these new rates and increased retention efforts."[121]

Profitability: There Was a Slight Decrease in Gross Margins for Ting Mobile

Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that there was a slight decrease in mobile gross margin dollars from just over $9 million in Q3 to just under $9 million in Q4. "I want to remind you that Q3 saw inflated margin as we receive cost breaks from the carriers in July and customers did not start seeing those price breaks until early September. Now that the dust has settled from our decrease in COGS and price drop, I should update a key metric on the business. I've historically talked about Ting Mobile customers representing about $200 a year in billed gross margin, around a $35 bill at a 50% margin, and you'll remember that I took that gross margin number up last quarter. As total usage per account has increased and our costs have decreased that total gross margin dollars per year per account is now around $240. Overtime we expect bills to continue to go up with increased usage and our profit margin to go down within our margins on high usage, but we will likely continue to land around that absolute margin dollar number."[122]

Marketing: Ting Mobile Ran a Pilot Infomercial in November with Moderately Encouraging Results

Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that Ting Mobile ran a pilot November with moderately encouraging results. "The placements made the phone ring which is a great start. We would like to improve the cost per call but conversion is where we need to focus. We believe that there is enough potential to test further but before we turn it back on we've been doing quite a bit of work, particularly on the conversion side. We have listened to thousands of calls and built training document scripts and tools aimed at closing more deals. We've engaged an outside sales capability to help us optimize and scale quickly through the pilot phases."

"There are very few acquisition channels that have the scalability the television does; so we are determined to give it our best shot and we are hopeful that there is a path to an acceptable cost per acquisition. The next round of testing will take place later this month and I will update you on the next call. Of course, if you're up late and happy to see the infomercial running repeatedly, you will have some early indication."[123]

In answer to a question from Hubert Mak, Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that the infomercial Ting Mobile is trying is uniquely scalable. "Television uniquely -- you're able to turn the dial and as you've heard me lament about our customer acquisition processes for years, you know, the CAC has always been fantastic but it wasn't inherently scalable. So you know, I think that for all of those reasons I've been calling out the infomercial particularly. [124]

Marketing: Ting Was Once Again the Top-Rated Post-Paid Service in Consumer Reports Annual Survey

Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that "in November, consumer reports released its annual survey of U.S. cell phone providers and Ting was once again the top-rated post-paid service outranking major carriers and challenger brands alike."[125]

Expansion: Ting Has Reached a Tentative Marketing Agreement to Migrate RingPlus Customers to Ting

Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that Ting has reached a tentative agreement to migrate their customers to Ting after RingPlus has announced that it will be shutting down its service. "It is simply a marketing agreement, not an acquisition of any assets or resources. They had roughly 80,000 customers, most of whom were on a free plan. We do not know how many real customers this will produce after an inevitable initial exodus but we know that it will initially inflate gross adds, churn and marketing expenses in the form of credits we are providing. We wanted to share this as it has been made public on their forum and on Reddit, and we wanted you to know that this is a good opportunity but it will take a lot of work, especially at the customer service level and we really will have no indication of success until the next call; the data simply will not be right."[126]

In answer to a question from Michael Cooperman, Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that "we started kind of mobilizing Saturday, so -- but between Friday and the time we eventually do migrate that base, you know, there is people who are finding new suppliers. We certainly have had a number of ports in that are awaiting approval. So that's going on, so whatever -- from the 80,000 there is going to be some number that are going to move before we do anything; so that's kind of the first point. The second point is then that base will all kind of come over to us. So yes, that's correct, mitigated by the first point. And now the third point is -- but only the people who agree to our terms of service give us a valid credit card and sign up for Ting account; and you know, as you know that means really picking a username and a password and providing the address set around the credit card, right. Only people who take those positive steps will come over."[127]

Expansion: Ting Mobile May Get Several Thousand New Customers from RingPlus

In answer to a question from Hubert Mak, Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that it's very difficult to tell what the end numbers will be like from marketing to RingPlus customers. "They were certainly -- of that 80,000 customers, the significant majority -- most of those customers took advantage of the free offering. There were still a solid number of customers well into the five figures who were paying something every month. Now it's a little bit more of a pay as you go service and the plans were all over the place; so we're looking at the usage. But I would say two things; first, this allows us to leverage some of the things we do very well. So particularly there our ability to provide a quick solution to both RingPlus and Sprint in terms of platform, our ability to get the website where it will need to be to receive these people comfortably, our ability to deal with challenges on the communication and social side to sort of all of that customer experience stuff that we do so well. In addition, this will really, really put a lot of work on customer service. So we're going to be sorting through these customers. I think I'm comfortable saying I'm -- you know, it's very difficult to say what we will expect but if we get at the end of the day, you know, it's a year from now and there is an extra 5000, 6000, 7000 regular Ting customers will be quite happy with the approach.[128]

Legislation: Ting Mobile Joined with Netflix and Google in Objecting to a Proposed Law in Virginia that Would Limit Cities Getting Involved in Fiber

In answer to a question from an analyst, Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that Ting Mobile "joined with others in objecting to legislation which would have limited cities and towns in the State of Virginia from trying to take steps to be more involved in their cities getting fiber."

"Charlottesville in particular, you know, I don't think there is going to be any impact on the ground in the city in terms of our relationship with the municipal government. I will also tell you that I believe at least what I was seeing trending was that some of those issues in Virginia were going to be fairly and effectively dealt with. So I think there might be a good news outcome in some of those efforts as well."[129]

February 7, 2017: Ting Internet Continues to Move Forward

Charlottesville: Ting Internet Now Passes Over 12,000 Potential Customers in Charlottesville

Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that Ting Internet added a couple of thousand serviceable addresses in Q4 bringing this up to about 12,000 potential customers.[130]

Charlottesville: Ting Internet Is Getting a 90% Converstion Rate in Charlottesville with Pre-Orders

Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that pre-order is proving to be about as good as an order with over 90% conversion. "It is also worth noting that while we start -- started building the network in service and customers in Charlottesville even before we instituted our pre-order system, pre-orders now play a key role in guiding our network expansion there just as we will see in a new town like Holly Springs."[131]

Westminster: The City Is Nearly Finished with Its Next Wave of Construction and Ting Is Now Lighting Up Customers in These New Neighborhoods

Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that in Westminster, Maryland, where the city is building the network, the city is nearly finished with its next wave of construction and we have just started lighting up the first customers in these new neighborhoods.[132]

Centennial: Ting Internet Expects to be Servicing the First Customers in Centennial Later This Year

Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that Centennial, Colorado and Sandpoint, Idaho, are both hard at work on their municipal core fiber networks and we expect to be servicing the first customers in both markets later this year.[133]

Sandpoint: Ting Internet Expects to be Servicing the First Customers in Sandpoint Later This Year

Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that Centennial, Colorado and Sandpoint, Idaho, are both hard at work on their municipal core fiber networks and we expect to be servicing the first customers in both markets later this year.[134]

Holly Springs: Ting Internet Lit Up the First Customers in Holly Springs

Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that Ting Internet did light up the first customers in Holly Springs at the start of 2017 and "we're moving quickly to convert all the pre-orders in the first few neighborhoods there into active customers."[135]

Strategy: Ting Internet Remains Comfortable with their Core Assumptions and Metrics on Gross Margins and Adoption Rates

Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that Ting Internet remains comfortable with the core assumptions and metrics that the company has shared on the Ting Internet business in previous quarterly conference calls. "The variables we will most look at optimizing going forward will be build costs and adoption rates; we do not expect to be changing those variables for your modeling quarterly. Much like gross margin per customer per year on Ting Mobile we will more likely revisit them over the years. Again, we expect to see 20% adoption among serviceable addresses in a year and 50% in five years. At these take rates we'll be paying about $2,500 to $3,000 per customer in CapEx and those customers will be worth about a $1,000 a year in margin. "[136]

Expansion: Ting Internet Expects to Have 85,000 Serviceable Addresses at Completion in the Five Announced Ting Towns

Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that just these first five towns should represent about 85,000 serviceable addresses at completion.[137]

Expansion: Ting Has More In-Bound Interest Than Ever Before

Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that we "certainly look forward to expanding our footprint further and we have more in-bound interest that we have ever had before"[138]

Expansion: Ting Internet Expects to Announce Additional Towns This Year

Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that he expects to announce additional towns this year "but I have no imminent announcements at this time."[139]

In answer to a question from Hubert Mak, Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that "there is nothing imminent but I think you will still see a couple few markets this year and the exact number will really depend on two things; one, watching some cities come out of the other end of their process; and two, how well we do with running multiple builds and multiple installed teams and multiple marketing efforts across markets as we're now taking on for the first time; so we're going to scale up a bit there."[140]

Expansion: Ting Internet Is at Capacity and Is Expanding Capacity

In answer to a question from Hubert Mak, Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that "every quarter two things happen - we're at capacity and we expand capacity. This is a business that's going to be ramping up really for the next couple of few years. So there is really -- there is almost not a day in this business where we're not at capacity and that we're not working on expanding capacity at the same time. You know, if I took anything as points on a line whether it was people working on that business and head office, whether it was number of crew doing installs, number of crews during construction; all of those numbers would be up and to the right."[141]

Expansion: Ting Internet Expects to Spend $30 million to $35 million CapEx Spending for Fixed Internet in 2017

In answer to a question from Hubert Mak, Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that there will be $30 million to $35 million CapEx spending for the fixed internet in 2017.[142]

Installation: Blowing Fiber During Construction Has Received a Good Response with Customers in Holly Springs

In answer to a question from Patrick Retzer, Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that there are advantages to blowing fiber in terms of not upsetting customers during construction. "It's something that our guys picked up on some of their travels in Asia. And you know, we were -- we worked with our contractor in the Holly Springs to practice with that and the thing that probably was most positive to come out of that is that really when -- you know, when we were on your street, getting your street ready for fiber you noticed much less than would have historically or traditionally been the case. So we had a very good response from the people of Holly Springs, just in terms of not upsetting them too much which often when people are laying conduit laying infrastructure, there tends to be a lot of issues and here there is not very much gap between -- we're doing the construction work and we'd love to have you as a customer. So we think that's pretty positive and we were pretty aggressive on social as well in dealing with anybody who did have a question or an issue."

There are also some costs savings to blowing fiber. "What used to take a number of human beings laying fiber in an open trench or a ditch is now done by machine in seconds. So there absolutely is a real cost savings to it."[143]

Expansion: You Can Take the Capex Spend and Divide That by Installation Cost to Come up with the Number of Serviceable Addresses

In answer to a question from Patrick Retzer, Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that "you can take the CapEx spend, you can divide it by the cost per build that we put out which is think about that in the $1,250 to $1,500 range and you can get to the number of serviceable addresses we're projecting, then you can look at the markets that we're in and you can kind of lay them out of the map and you can fill in however many additional cities you want for the rest of the addresses."[144]

Learn more at:

Expansion: Interest in Ting Internet Remains Strong

Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that interest rates remains consistently strong. "I do think that a lot of municipal processes are kind of waiting a little bit to see what happens with some of the infrastructure program or infrastructure tax plan. There is a lot of regulatory uncertainty right now, for some that's causing them to maybe try and accelerate, for others that maybe they are a little -- you know, sitting back a little more but the native interest is just as strong as it's ever been and continues to get stronger as people need for fast reliable Internet over fiber increases."[145]

Profitability: Ting Internet is Still Looking at Breakeven in 2018

In answer to a question from Huber Mak, Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that Ting Internet is looking for breakeven here operationally for 2018. "What I said more specifically was towards the end of 2018, so not necessarily in 2018. And that was -- if you remember Hubert, that was the way I kind of flagged it for the Ting Mobile business as well. You know, what I'm looking at there is less about what is the calendar year result and more -- what is -- you know, when does it move from costing money to generating money."[146]

February 7, 2017: Domain Services Has Doubled in Size with the Acquisition of eNom

Acquisitions: Acquiring eNom is Overwhelmingly about Generating Scale and Realizing Cost Efficiencies

Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that the acquisition of eNom is overwhelmingly about generating scale and realizing cost efficiencies and most of these will be realized through greater efficiency in the technical footprint and a much lower reliance on licensed software. "As a quick recap, on January 20, Tucows acquired Enom, a wholesale domain name registrar from the Rightside group for a purchase price of $83.5 million. The Enom business has approximately 14.5 million domains under management, 28,000 resellers and approximately $15 million in EBITDA which we hope to be able to expand to $20 million over the next 24 months as we realize the synergies available to us."[147]

Acquisitions: The eNom Business is a Flat, Potentially Even Slightly Negative Growth Business

Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that the Enom business is a flat, potentially even slightly negative growth business in terms of gross margin dollars. "This is primarily due to the customer mix being composed of a higher number of traditional web hosting companies in North America and Europe, the two customer profiles that we've been calling out as more growth challenged for the past couple of years. Enom also has historically lower renewal rates than the open SRS business."[148]

Acquisitions: The Strategy with eNom Will be Maintaining and Servicing Existing Customers as Opposed to Growth

Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that "as part of the eNom acquisition, we acquired a mature retail business and associative customers which for the past few years has been more about maintaining and servicing Enom existing customers as opposed to growth, it has not been actively promoted and as a result has a flat to declining trajectory. It's something we don't intend to change in the short-term but as we look under the hood and get a better sense of the platform as we will with all of the operations, the long-term plan might be different. Going forward we're not going to be breaking the two retail businesses out separately. We'll report a single retail domain line as we always have but we will provide a sense of how these individual businesses are doing relative to their current trajectories. On the people side, we've already recognized a few places where we will be able to use people and skills more broadly. We all know that the domain's business is a very low margin business and one where you have to be extremely careful of your costs. Accordingly, we've always run the domains business pretty lean, this gives us a singular opportunity to take advantage of the good people we've been able to pick up. We even see some opportunities in people across the Ting businesses."[149]

Wholesale: Wholesale Performance Has Had Steady Growth

Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that "in our wholesale channel, total registrations for the fourth quarter were up 19% year-over-year with continued strong growth in open SRS transactions supplemented by the addition of the Melbourne IT names acquired in April of 2016. The number of new transactions grew by 18% and renewals were up and equally healthy 19%. Our renewal rate continued in its historical range of within a point or so of the 75% coming in at 76% in Q4, well above the industry average. Total domains under management expanded 12% from the end of Q4 last year to 14.9 million with a bulk of that driven by the Melbourne IT acquisition. I will also highlight that in Q4 gross margin again increased continuing an ongoing trend as we continue to benefit from the shift to mix in higher margin product."[150]

Retail: Hover Delivered Strong Performance

Elliot Noss told analysts during the 2016 fourth quarter earnings conference call on February 7, 2017 that "on the retail front, Hover delivered another strong performance with gross margin up 13% from Q4 2015 driven by continued steady growth in the customer base which was up 22% from the end of 2015. And I will note for you that our customer growth in Q4 benefited from a one-time pick up of about 13,000 customers from a deaccredited registrar. In addition, our renewal rates remained well above the industry average at 81%."[151]

February 6, 2017: Venture Capital Firm Union Square Ventures (USV) Invests in a Public Company, Tucows, For the First Time

Venturebeat reported on February 6, 2017 that in a blog post authored by partner Brad Burnham, VC firm Union Square Ventures (USV) announced that it had made a substantial investment in Tucows. This is the first time USV is making an investment in a public company, an uncommon practice among top VC firms. It’s unknown at present how long USV intends to hold its Tucows shares, the size of the investment, or from what fund the investment was made.[152] Burnham joined the Tucows Board of Directors on January 12, 2017.

We are investing in Tucows because we believe they have built a great business, but also because they have been a stalwart defender of the open Internet. We are excited to be working with them now because they are challenging the incumbent access providers and the conventional wisdom, by building modern fiber networks in local communities across the U.S.. They are doing this at a time when telephone and cable companies are exploiting their natural monopolies in these communities, underinvesting in their outdated networks, raising prices and using the excess profits to buy back their stock, and buy their way into global entertainment businesses, pleasing shareholders but doing nothing for the communities they serve.

Tucows is doing the exact opposite. They are using hard won profits from the competitive wholesale domain name business to invest in modern fiber networks in cities like Charlottesville VA, Holly Springs, NC, and Centennial, CO. They believe, as we do, that, a modern communications infrastructure is the most important investment any community can make to expedite the transition from a 20th century economy based on undifferentiated manufacturing to a 21st century economy based on highly specialized manufacturing and services.

The cable and telephone companies would like us to believe the open Internet is threatened by over reaching government regulation. In fact, it is threatened by crony capitalism. Instead of investing in local communities, the incumbents deploy thousands of lobbyists to argue that communities should not be able to invest in their own future. We are thrilled to be working with Tucows, because instead of lobbying Washington, to prevent competition, they are actively investing in fiber networks, the critical 21st century community infrastructure, and while they are at it, proving that investing in community fiber networks is a great business.[153]

"I have been bugging Brad to join the board for years," said Elliot Noss. "Of course I love all of the folks at USV, but this is really about Brad. As they noted, this is not their typical investment (at all). In fact it is the mirror image in many ways. That being said we have lots to learn from each other and we are both excited to start working on things together. And it is nice to have a sexy VC in the domains space!"[154]

February 6, 2017: Ting has Struck a Deal with Sprint to Move All Displaced RingPlus Customers over to Ting

Cnet reported on February 6, 2017 that mobile carrier (and Sprint MVNO) RingPlus sent a notice to subscribers indicating service would be shut off on February 11, 2017 so it's time to start shopping for a new carrier because if you don't make a change before service terminates on Saturday, you'll lose your phone number. Ting, an MVNO famed for its excellent customer service, is already welcoming RingPlus refugees with open arms offering $35 in Ting credit to RingPlus customers that bring their number over to Ting. There's no charge to port your number, though Ting does warn that the process could take a couple days.[155] "Number ports from RingPlus to Ting are running slowly right now because of volume. Things should speed up once RingPlus opens the gates. While a lot of MVNOs might consider this a “heavy lift,” we’ve done this kind of thing a few times before so rest assured, you’ll be in good hands."[156]

The Ting Blog reported on February 7, 2017 that Ting has struck a deal with Sprint to move all displaced RingPlus customers over to Ting. "Assuming you haven’t already ported your number away from RingPlus, it will soon be safe with Ting. If you choose to take us up on our offer, which we’ll talk about in a sec, you’ll join the ranks of happy Ting customers paying a fair price for whatever usage levels you reach each month," reads the post. "If you choose not to stick with Ting, that’s your call. We’re not holding your number hostage: You’re free to go wherever the mobile winds may blow. That probably didn’t need to be quite so poetic. Whatever. Point stands. Your number is yours. If nothing else, we’ve bought you a little time to figure out your next move. Obvious biases aside, we think you should stick around."[157]

According to Fortune Magazine RingPlus has 90,000 wireless customers.[158]

February 1, 2017: Ting Celebrates Fifth Birthday

Ting Celebrates Fifth Birthday. Ting celebrates its fifth birthday today with a look back at the ups and downs of five years of service.
Ting Celebrates Fifth Birthday. In the five years since Tucows started Ting, the stock price has risen 1573% while the S&P500 has risen 79%. Click graphic to enlarge.

The Ting Blog reported on February 1, 2017 that Ting celebrates its fifth birthday today with a look back at the ups and downs of five years of service.

Ting mobile was conceived of the idea that cell phone companies ask too much and give too little. We took aim at contracts, bundling and locking people in. We came out against mobile business as usual: “Free” phones that come with handcuffs, bloated unlimited plans that lock people in to pay for stuff they don’t need or use and fee creep that makes the bill you receive look nothing like the plan you signed up for. People really seemed to appreciate our straight-forward approach, honest pricing and the much needed clarity we try to bring to an industry that profits on confusion. We really appreciate the appreciation. We believe that you win your customer’s business every day. We’re proud of the work we’ve done and we’re not about to rest on our laurels.

Since launching Ting with mobile that makes sense, we’ve branched out to offer crazy fast fiber Internet in select US cities and towns. Symmetrical gigabit Internet. Suffice it to say, that’s going pretty well. We’ve heard more conglomerate cable co. horror stories than we care to recall in our visits to the various Ting towns. It’s clear that if there’s one place where our open, conscientious and honest approach is more needed than in the mobile space, it’s in fixed Internet access. People are tired of getting tired, tiered Internet access over tired copper that wasn’t designed with today’s Internet in mind. We’ve laid down roots in Westminster, MD, Charlottesville, VA, Holly Springs, NC and we’ll come online soon in other towns and cities including Sandpoint, ID and Centennial, CO.

Some Ting mobile wins. Perhaps our most notable achievement on the mobile side: We dropped our prices. Twice. First, coinciding with our two year anniversary, we cut voice, text and data rates across the board. Later, after successfully negotiating with our carrier partners, we were able to drop data pricing further, down to $10 per gigabyte after the first. In classic Ting style, these price cuts were across the board, for both new and existing customers. No grandfathering and certainly no forcing customers to call and threaten to leave in order to extend the new pricing to them. We launched service on a second network, adding GSM to our existing nationwide coverage. Thus affording people more coverage options and—the thing we were most excited about—more phone choices. With this addition, over 80 percent of phones in the market were able to come to Ting and the Ting Shop was no longer the only place someone could buy a Ting-compatible phone. Since unlocked phones have become more the norm in North America (called it!) that 80 percent number continues to grow.

We’ve had the distinct honor of being included in Consumer Reports annual survey on cell phone service several years running, beating out the big guys handily and trading top honors back and forth with other scrappy MVNOs intent on changing what people expect from phone companies. A little foresight and a little good fortune saw us working with Neeb, the top ranked North American StarCraft II pro gamer who consistently leaves a trail of computer-generated carnage in his wake. Seeing him in his Ting Starcraft jersey and hoisting the KeSPA Cup, the first North American in 16 years to do so, was quite a moment.

Every rose has its thorn. It hasn’t all been smooth sailing and we’ve had some challenges to face along the way to year five. The first one that comes to mind, the “financial eligibility date” rules that came into effect in February, 2015. Our blog post on the subject still has the dubious distinction of being the most commented on post to hit the Ting blog. We got past that and ended up in a better place for it with even more phones becoming eligible to come to Ting.

Another bump in the road: Someone found a way to exploit a little coffee-themed incentive program we ran and managed to snag a bunch of $5 digital gift cards very quickly… to the tune of >$35,000. We shut this person down, invalidated the codes, closed the loophole and got the promo back up and running quickly. We learned some important lessons. Not least of which, have someone with a criminal mind examine your promotions for possible loopholes.[159]

February 2, 2017: Tucows OpenSRS Partners with Symatec to Introduce 'Encryption Everywhere'

Tucows OpenSRS Blog reported on February 2, 2017 that Tucows has partnered with Symantec to bring resellers the Encryption Everywhere program, an ambitious program designed to equip everyone with basic web security, free of charge. Tucows is offering SSL Lite to all its resellers – a complimentary certificate that provides basic encryption without the bells and whistles. If your domains are registered through OpenSRS and you are using our SystemDNS nameservers, resellers will be eligible to grab a FREE certificate through the Reseller Control Panel/API. "So what’s in it for you? There are numerous reasons why you should take advantage of the Encryption Everywhere program. For starters, you can strengthen your trust with your customers. Also, upselling to more robust certificates leads to growth. Lastly, you are contributing to a better, safer Internet for all. Yes, even for that lonely cave dweller. It’s a win-win situation for everyone."[160]

February 1, 2017: Chair of Centennial’s Fiber Steering Committee Runs for Mayor

The Villager Publisher reported on February 1, 2017 that Centennial Mayor pro tem C.J. Whelan, the chair of Centennial’s Fiber Steering Committee, has become the first candidate to officially announce his candidacy for the top elected job in this year’s municipal elections. The City Council member and 30-year resident has promised to bring “smart, experienced and responsible leadership,” saying he deeply believes in “Centennial’s way of doing business” and “saving up for capital projects and maintaining no debt and a healthy balance sheet, and contracting out for most of the city’s services.” As mayor, the tech-savvy Whelan said he would continue driving Centennial’s fiber-optic network, as approved by voters. Canada’s Ting reached a lease agreement with the city last year. Whelan boasts two degrees from the Massachusetts Institute of Technology and the business owner co-founded and was chief technical officer for a teleconferencing company. Cathy Noon, the 16-year-old city’s second mayor, is term-limited.[161]

February 1, 2017: Google Fiber Debuts Raleigh Service Near Ting's Holly Springs Location

Google Fiber Debuts Raleigh Service Near Ting's Holly Springs Location. Google Fiber is debuting in Raleigh and has begun taking a handful of “advanced orders” in in Raleigh’s North Hills/midtown area. Ting Fiber, just down the road from Raleigh, recently started connecting customers to high-speed fiber in Holly Springs, a metro Google Fiber left out of its plans. According to Noss having just spent a quarter digging in the dirt in Holly Springs, North Carolina,” he could relate to Google’s reprioritization when it comes to fiber. Graphic: Hugh Pickens

The Triangle Business Journal reported on February 1, 2017 that Google Fiber is debuting in Raleigh and has begun taking a handful of “advanced orders” in in Raleigh’s North Hills/midtown area. “We’ve seen tremendous response in Morrisville and we expect the same tremendous response in North Hills/Midtown,” said Erik Garr, Google Fiber regional manager. Garr declined to be specific about how many people have signed up for the service in the Triangle, but says all is going according to plan. Additional geographic launches “will all depend on how long it takes to finish North Hills/Midtown,” he says, adding that North Hills was picked for engineering reasons.

In October, Google Fiber said it would “pause” operations in most of the cities it had announced as potential locales for the service. Blair Levin, former director of the National Broadband Plan, said the reasoning behind Google’s rollout reduction is pretty simple: “It’s hard and expensive ... It's not an accident that there are very few companies willing to take that risk ... As Google Fiber slows ... what you’re going to see is a slowdown by the other companies offering improved speeds and lower prices, so the advantage to North Carolina just increases, actually."

Ting Fiber, just down the road from Raleigh, recently started connecting customers to high-speed fiber in Holly Springs, a metro Google Fiber left out of its plans. According to Noss having just spent a quarter digging in the dirt in Holly Springs, North Carolina,” he could relate to Google’s reprioritization when it comes to fiber. “It does not perfectly match their skills,” adding that it would take time for Google to “learn [fiber’s] complexities.”[162]

January 27, 2017: Sandpoint Sets Hearing for Proposed Fee Structure for Leasing Fiber to Ting

The Bonner County Daily Bee reported on January 27, 2017 that Sanpoint City Administrator Jennifer Stapleton presented the Sandpoint City Council last week with a "dark fiber" fee structure proposal, which was approved through a vote with a public hearing scheduled for February 15, 2017 for adoption of the fees structure for leasing fiber to bring it to businesses and residents in the Sandpoint area. City officials worked with consultants from Design Nine to develop the proposed fee structure. "Dark fiber," according to the proposed structure, will cost providers $150 a month per strand, with a required five-year minimum contract and $250 application fee. One conduit line on the backbone containing 144 fiber strands is an open-access network that can be leased out to public and private companies like Ting.

Stapleton said service providers like Ting, a company that has been interested in bringing fiber to local businesses and residents for several months, would likely use the "indefeasible right of use" (IRU) pricing also listed in the proposal. IRU prices refer to a lump sum, one-time fee, which Stapleton said essentially gives the lessee ownership of the strands. "It is the most common structure in terms of ownership or, I guess, perpetual leasing of fiber," Stapleton said. "In these models it has the benefit to the city that it assures us the maintenance operations revenue stream in perpetuity as well. There is not a lot of cost once the fiber is in the ground and there really isn't, at this point, a set time that (the fiber) expires and is no good any longer."

IRU pricing is proposed at $3,550 per strand with a six-strand minimum. For 13 to 24 strands, the price per strand is $2,367 — a 33-percent discount — and 25 or more strands at $1,183 per strand. According to the proposed structure, providers will be charged an annual maintenance fee of $333 for up to 24 strands, and $167 per year for 25 or more strands. The maintenance fee includes a stipulation that it can be increased or decreased every other year based on changes in actual maintenance costs.[163]

Indefeasible right of use (IRU) is a permanent contractual agreement, that cannot be undone, between the owners of a communications system and a customer of that system. The word "indefeasible" means "not capable of being annulled, or voided, or undone." The customer purchases the right to use a certain amount of the capacity of the system, for a specified number of years. IRU contracts are almost always long term, commonly lasting 20 to 30 years. The communication system can be a wire cable, such as submarine communications cable, or a fiber optic cable, or a satellite. Depending on the type of system the customer might be buying exclusive use of one, or more, wires in a wire cable, fibers in a fiber optic cable, or channels through a satellite. An IRU owner can unconditionally and exclusively use the relevant capacity of the IRU grantor’s network for the specified time period.[164]

January 26, 2017: Neteo Explores Competing with Ting to Provide Gigabit Internet Service to Centennial

Neteo Explores Competing with Ting to Provide Gigabit Internet Service to Centennial. Neteo, a wireless internet service provider for Morrison, Colorado, is testing customer demand for gigabit internet in the city of Centennial joining Ting who began taking pre-orders in September although the Canadian ISP has not signed an official agreement yet with the city. Meanwhile officials from Ting Internet were in town this week to meet with residents, said Adam Eisner, Ting’s vice president of networks. “The response so far has been very positive,” Eisner said. “Alongside that, we are undertaking a lot of planning right now, from how much of Centennial’s fiber network we will leverage via lease to exactly where we will build, and the specifics behind that. We’re hoping to announce more details in the coming weeks.” Photo: City of Centennial

The Denver Post reported on January 26, 2017 that Neteo, a wireless internet service provider for Morrison, Colorado, is testing customer demand for gigabit internet in the city of Centennial joining Ting who began taking pre-orders in September although the Canadian ISP has not signed an official agreement yet with the city. “This is great because that was our goal from the beginning," said Allison Wittern, a city spokeswoman. “All along we’ve said we wanted to increase competition and generate interest." Neteo already offers wireless internet in Morrison, Conifer, Evergreen and other cities but faster internet has been challenging for the small startup, which doesn’t have the resources to tear up roads to run fiber cables, said Ryan Smith, Neteo’s co-founder. “The city is doing two things I like: They’re putting in a backbone but they’re not becoming an ISP,” Smith said. Neteo is exploring the possibility of offering fiber-based internet to homeowners, apartment dwellers and businesses in Centennial and is taking sign-ups at their web site.

Meanwhile officials from Ting Internet were in town this week to meet with residents, said Adam Eisner, Ting’s vice president of networks. “The response so far has been very positive,” Eisner said. “Alongside that, we are undertaking a lot of planning right now, from how much of Centennial’s fiber network we will leverage via lease to exactly where we will build, and the specifics behind that. We’re hoping to announce more details in the coming weeks.”[165] Tucows CEO Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that in Centennial Ting Internet "hopes to be able to begin our construction in Q2 2017 or so and start lighting up customers sometime in the summer."

January 25, 2017: Elliot Noss Says Combining Tucows with eNom Will Be Done Piece by Piece with Backwards Compatibility in Mind

Namescon reported on January 25, 2017 on their interview with Tucows CEO Elliot Noss that touched on a number of topics. With regard to the purchase of eNom which added 14.5 million domains under management and 28,000 active resellers to Tucows, Noss says that combining the two entities will be done piece by piece with backwards compatibility in mind. Noss referred to himself as an ICANN troublemaker after Tucows was described by the US White House as “notorious” because the registrar wouldn’t take down names just because a government demanded it. “Groups like the EFF [Electronic Frontier Foundation] and others came to our defense,” said Noss.[166]

January 25, 2017: Elliot Noss Says There are 20,000 Cities in America That Will Eventually Need Fiber

Namescon reported on January 25, 2017 on their interview with Tucows CEO Elliot Noss that Ting is now working on a fiber-to-home product, to bring high-speed internet to whomever wants it and says that there are 20,000 cities and towns in the United States that are eventually going to need fiber, so competition with Google isn’t something that keeps him up at night: “There aren’t a lot of people doing this.” Cities are approaching Ting on their own, asking to be… fiber-ized.[167]

January 25, 2017: Elliot Noss Says He Discovered Internet Law in His Student Days

Namescon reported on January 25, 2017 on their interview with Tucows CEO Elliot Noss that Noss says he discovered internet law in his student days, and noted one truism: “The legal system just moves too slow.” Noss doesn’t worry too much about individual pieces of legislation, because they tend to be backwards-looking in an industry where everything moves forward very quickly. However, he notes, there are real casualties of poorly-written or badly-implemented internet law. Keep running forward, he advised anyone in the internet industry. Noss recounted his failure in trying to get Tucows into music and movie distribution. When they launched the first wholesale blog hosting platform in 2003, he was sure it would be a success… but it was not to be. Blogging blew up, sure, he said; but “nobody ever paid for it.”

Noss noted that he "was an abject failure until I was 35 years old!” and spent his life waiting for the internet to come along… and when it did, it was slow and painful to use. “I knew as soon as I touched it that it was going to be what it is [today].” Noss joined Tucows when it was a download site for freeware and shareware, and that introduced him to the intricacies of domain names. “At that time if you could configure an email address, you had godlike powers!” In the nineties, Tucows got into the pre-ICANN push for new TLDs. Noss values long-term relationships with employees and customers alike and says that it takes a long time to figure out what you’re doing at a job. “I’ve been extremely lucky to be in one place, working for one company, for twenty years now."[168]

January 25, 2017: Ting Joins Google and Netflix in Fight against Virginia Municipal Broadband Restrictions

Ars Technica reported on January 25, 2017 that Google, Netflix, and Ting joined advocacy groups and other companies lobbying against a proposed Virginia state law that would make it far more difficult for municipalities to offer Internet service. "This bill would effectively ban new public broadband networks and public-private partnerships and cripple existing ones, harming both the public and private sectors, retarding economic growth, preventing the creation or retention of jobs around the Commonwealth, particularly in rural areas, hampering work force development, and diminishing the quality of life in Virginia," bill opponents including Google and Netflix wrote in a letter last week to State House Commerce Committee Chairman Terry Kilgore, a Republican. Cities and towns with speeds limited to 10Mbps/1Mbps "cannot realistically hope to attract or retain modern businesses or provide their residents, particularly their young people, a reason to stay in them," the letter to Kilgore said. "These communities will be condemned to economic stagnation or worse—like the 'ghost towns' that died a century ago for lack of adequate electricity."[169][170]

The bill is being heavily promoted by the Virginia Cable Telecommunications Association. Virginia is only the latest state to consider such laws. Missouri is also contemplating a similar restriction in SB 186, which places numerous restrictions on how municipal broadband (or public private partnerships) can be drafted, voted on, and funded. "Frequently, the efforts are framed by ISPs and their PR allies as taxpayer disasters waiting to happen," writes Karl Bode. "But these business models are like any business model: some are good, and some aren't. Often overlooked is the fact that these towns and cities wouldn't be getting into the broadband business if they were happy with the service they're getting. And instead of shoring up their service and competing, ISPs like AT&T, Comcast, CenturyLink, Charter and others are happily buying state laws to ensure they never have to."[171]

January 25, 2017: Video of Ting's First Installation in Holly Springs


Ting representatives and local officials gathered to ceremonially light up the fiber connection for Holly Springs’ first Ting customer – Josh Bordelon of Dexter Ridge Drive. “If you have lot of devices connected concurrently or you work from home, gigabit internet changes the way you use the internet,” said Adam Eisner, vice president of networks for Ting. “The individual we lit up was talking about how the way he uses video has entirely changed. No more buffering, no more spinning wheels. He just turns it on and there it is.” Eisner said his company tends to look for rapidly growing and tech-savvy small towns that might be passed over by larger fiber-optic players such as Google or AT&T. Holly Springs was attractive, Eisner said, because the town already had installed a fiber network ready for lease.

January 25, 2017: Ting Fiber Now Online in Holly Springs

Ting Fiber Now Online in Holly Springs. Josh Bordelon of Dexter Ridge Drive in Holly Springs stands next to his laptop and fiber-optic control panel. He was the first customer in Holly Springs to receive the service through Ting. Photo: Courtesy of Ting Internet

The News Observer reported on January 25, 2017 that about 2,000 addresses in Holly Springs now have access to fiber-optic internet through Ting and on the morning of January 17, 2017 Ting representatives and local officials gathered to ceremonially light up the fiber connection for Holly Springs’ first Ting customer – Josh Bordelon of Dexter Ridge Drive. “If you have lot of devices connected concurrently or you work from home, gigabit internet changes the way you use the internet,” said Adam Eisner, vice president of networks for Ting. “The individual we lit up was talking about how the way he uses video has entirely changed. No more buffering, no more spinning wheels. He just turns it on and there it is.” Eisner said his company tends to look for rapidly growing and tech-savvy small towns that might be passed over by larger fiber-optic players such as Google or AT&T. Holly Springs was attractive, Eisner said, because the town already had installed a fiber network ready for lease.

Ting is one of several active and prospective fiber-optic internet providers in the Triangle. AT&T’s fiber service already covers parts of Holly Springs. Google and Frontier are also competing to bring fiber-optic internet to the area. Google Fiber plans to expand to several Triangle towns after launching first in Morrisville. The connections went live in September 2016. Google and AT&T’s gigabit home services both cost $70 per month. The scramble to install the necessary fiber-optic cable has drawn hundreds of complaints from residents around the Triangle as contractors dig up roads, sidewalks and yards to lay cable. Mark Andrews, a spokesman for Holly Springs, said the town hasn’t kept track of which companies are associated with complaints about utility work. But Andrews said residents comments suggest Ting has been relatively diligent in minimizing the impact of its cable installations.[172]

January 23, 2017: Tucows Amends Credit Agreement to an Aggregate of $140 million in Funds

Reuters reported on January 23, 2017 that under an SEC filing on January 20, 2017 Tucows entered into a first amended and restated credit agreement increasing their access to an aggregate of $140 million in funds. The amended credit agreement reduces the existing non-revolving facility from $40 million to $35 million and establishes a non-revolving credit facility of $85 million.[173]

January 23, 2017: Elliot Noss Encourages Canadian Municipalities to Ensure Their Communities Have Access to High Speed Internet

Wire Service reported on January 23, 2016 that in December, 2016 the Canadian Radio-television and Telecommunications Commission (CRTC) ruled that all Canadians should have access to reliable, world-class Internet services and the Commission established a $750 million fund to help municipalities, ISPs, community access programs, and non-profit service providers to deliver these services to Canadians. According to the CRTC, local governments have a crucial role in delivering faster, cheaper Internet to their communities. That's the message of a new platform launching today with the support of the Canadian Internet Registration Authority (CIRA) Community Investment Program. The platform highlights a number of municipalities in urban and rural communities alike which have successfully rolled out affordable, high-speed Internet, most often through deploying fibre networks.

"Over the last century, governments have taken measures to ensure citizens have access to critical services, including electricity, phone, water and sewer," said Elliot Noss, CEO of Toronto-based Tucows. "Today, high-speed Internet is considered an essential service, and we applaud municipalities taking steps to ensure their communities have access to the transformative power of the Internet. We especially look forward to seeing the kinds of innovative partnerships that Ting has cultivated with local governments in the U.S. to enable gigabit Internet right here in Canada."[174]

January 20, 2017: Tucows Acquires eNom with its Network of over 28,000 Domain Name Resellers and 14.5 million Domain Names under Management

Tucows Acquires eNom with its Network of over 28,000 Domain Name Resellers. Tucows announced on January 20, 2017 that it has acquired eNom from Rightside for $83.5 million, less a net working capital adjustment of $6.8 million, resulting in net cash at closing of $76.7 million. The eNom business is a leading wholesale registrar that provides domain services to a network of over 28,000 resellers. eNom has approximately 14.5 million domains under management and generated approximately $116.5 million in revenue through Q3 2016, primarily from its wholesale registrar business.

Nasdaq reported on January 20, 2017 that Tucows has acquired eNom from Rightside for $83.5 million, less a net working capital adjustment of $6.8 million, resulting in net cash at closing of $76.7 million. The eNom business is a leading wholesale registrar that provides domain services to a network of over 28,000 resellers. eNom has approximately 14.5 million domains under management and generated approximately $116.5 million in revenue through Q3 2016, primarily from its wholesale registrar business. That will give Tucows a total network of over 40,000 resellers globally and 29 million domains under management, making it the second largest domain registrar in the world.

As part of Tucows, eNom will continue to be a distribution partner for Rightside’s new gTLDs. Rightside will receive $76.7 million of net cash proceeds from the transaction, net of working capital adjustments. Concurrent with close, Rightside will pay approximately $4 million of transaction related expenses and will repay all of the debt outstanding under its credit facility. Following the transaction, Rightside will be in a strong financial position with approximately $90 million in cash on its balance sheet.

“The divestiture of eNom creates a stronger alignment between Rightside’s vision, strategy and financial profile and we believe this is the best way to increase shareholder value,” said Chief Executive Officer Taryn Naidu. “The market for new gTLDs is rapidly developing and the divestiture enables us to more intensely focus on our higher growth and higher margin businesses, where our Registry and Name.com businesses are leading the way with the new domains. We would like to thank our eNom colleagues for their hard work in building such a well-respected business and for their dedication to Rightside. We look forward to seeing their continued success and continuing to work with eNom as a valuable distribution partner as part of Tucows."

“eNom is one of the great and long-lived brands in the domain industry, with an outstanding reputation among its large network of resellers,” said Elliot Noss, President and Chief Executive Officer of Tucows. “We welcome eNom’s talented team into the Tucows family as they continue to deliver innovative products and excellent service to resellers and end-customers.”[175]

“For years, eNom and OpenSRS have been the two leading registrars primarily focused on the needs of resellers. This focus means these businesses fit very well together,” said David Woroch, Tucows’ Executive Vice President of Domains. “The acquisition keeps eNom resellers where they will be well understood, well valued and well served and creates tremendous value for Tucows and resellers on both sides through efficiency and scale.”

Elliot Noss, Tucows’ CEO added, “This industry has changed so much since Tucows and eNom each launched wholesale registrar services over fifteen years ago and .com, .net and .org essentially represented the namespace. It is a lot more challenging and complex now. At the same time, it is more mature and much more competitive. Scale is absolutely critical. This is a rare deal that gives Tucows and its investors exactly that while offering an immediate cash on cash return.”[176]

January 18, 2017: Ting Fiber Uses Existing City Networks in Holly Springs to Accelerate Fiber Builds

Fierce Wireless reported on January 18, 2017 that one of the secrets that allows Ting Fiber to accelerate their deployment and scale quickly is that they use the city’s existing fiber backbone in markets like Holly Springs, North Carolina, where it just began to connect neighborhood residents with its 1 Gbps FTTH service. “The town of Holly Springs built its own fiber backbone, so we’re leasing some of the backbone and building off of it,” said Adam Eisner, VP of networks for Ting Internet. “That means we did not have to go in and build a backbone through the middle of town.” Ting still has to build fiber into each neighborhood and then install a fiber drop and the optical network terminal (ONT) at the customer’s home. “To get into every neighborhood, we still had to go and construct that ourselves,” Eisner said.[177]

January 18, 2017: Ting Fiber Used Underground Deployment in Holly Springs, Aerial Deployment in Charlottesville

Fierce Wireless reported on January 18, 2017 that Ting uses varied deployment approaches, including a mix of underground and aerial poles across the initial markets where it offers service. “In Holly Springs it’s entirely underground which was new to us as an organization; it worked out very well,” said Adam Eisner, VP of networks for Ting Internet. In Charlottesville, Virginia, the network is all on aerial utility poles, while in Westminster, Maryland, Ting is just operating the network the city already built.[178]

January 18, 2017: Ting Deploys Optical Network Terminals Inside Homes Rather Than Outside

Fierce Wireless reported on January 18, 2017 that when Ting bought Blue Ridge Networks in Virginia, they tried deploying the Optical Network Terminals (ONT) both inside and outside the home and settled on bringing it indoors. “There are some real philosophies on whether you should use an indoor or outdoor ONT,” said Adam Eisner, VP of networks for Ting Internet. Eisner said that while there are various camps on whether to install an ONT inside or outside of a home, Ting found it has various options at its disposal. After initially using a converged ONT and residential gateway (RG), Ting found that customers wanted separate units. This allows customers to have more flexibility in how they deploy a Wi-Fi network and other devices in their homes to connect to the internet and stream video content. “We found that people seemed happier if we separate it out,” Eisner said. “We put the ONT on the inside and giving people the option of using an RG we provide or allowing the consumer to bring their own.”

In the neighborhoods it has targeted for buildouts, Ting will pass every home with fiber and only connect a home when they order service. “We have deployed enough capacity to hook up anybody in a neighborhood, but we don’t build a drop to your house until you sign up for service,” Eisner said. “We build an underground drop to the side of your home and put the ONT inside.”[179]

January 18, 2017: Ting Fiber Used Blown Fiber to Accelerate Fiber Deployment in Holly Springs

Ting Fiber Used Blown Fiber to Accelerate Fiber Deployment in Holly Springs. Ting used blown fiber, a process that uses air to push the microfiber through a duct to to ease fiber network installations in Holly Springs. “We blew a lot of the fiber,” said Adam Eisner, VP of networks for Ting Internet. “Fiber blowing as a deployment technique is still kind of new in North America.” Eisner added that “after watching service providers in Europe use fiber blowing, we gave it a shot and it’s worked very well.”

Fierce Wireless reported on January 18, 2017 that Ting used blown fiber, a process that uses air to push the microfiber through a duct to to ease fiber network installations in Holly Springs. “We blew a lot of the fiber,” said Adam Eisner, VP of networks for Ting Internet. “Fiber blowing as a deployment technique is still kind of new in North America.” Eisner added that “after watching service providers in Europe use fiber blowing, we gave it a shot and it’s worked very well.”[180]

Fiber Blowing also known as cable jetting is the process of blowing a cable through a duct while simultaneously pushing the cable into the duct. Compressed air is injected at the duct inlet and flows through the duct and along the cable at high speed. (Preferably, no suction pig is used at the cable head.) The high speed air propels the cable due to drag forces and pressure drop. The friction of the cable against the duct is reduced by the distributed airflow, and large forces that would generate high friction are avoided. Because of the expanding airflow, the air propelling forces are relatively small at the cable inlet and large at the air exhaust end of the duct. To compensate for this, an additional pushing force is applied to the cable by the jetting equipment. The pushing force, acting mainly near the cable inlet, combined with the airflow propelling forces, increases the maximum jetting distance considerably. Special lubricants have been developed for cable jetting to further reduce friction.

The advantages of jetting compared to pulling include: Longer installation distances can be reached; Installation distance less dependent on bends and undulations in duct; Forces exerted on the cable are lower; Easier use jet in tandem operation; The step of installing a winch rope is avoided; Equipment is needed only at one end of the duct route.[181] According to Clay Harris, a fiber blowing specialist with Condux, blowing is one of the most efficient and safest means of installing fiber optic cable. "When using fiber blowers, you're combining a pulling force (compressed air) and a pushing force (hydraulically driven tracks) during the installation, providing an efficient, stress-free deployment in far greater increments than possible when pulling fiber," Harris said. Because the blowing operation floats the cable on a cushion of air, it minimizes the contact points with the duct-reducing the friction that would be created by pulling the fiber through the duct with a fiber optic cable puller. A high-quality, silicone-based lubricant is also used to further minimize the friction, especially when navigating the bends. "Compared to a pulling application, blowing cable is faster and puts the cable under less stress. Through cable blowing, contractors are able to install more cable per day with less manpower," Harris said.[182]

January 16, 2017: Legislator Sponsors Bill to Ban Towns and Cities in Virginia and Private ISP Partners like Ting and Google Fiber From Improving Local Broadband

DSL reports reported on January 16, 2017 that Republican lawmaker Kathy Byron is sponsoring a bill in Virginia that would ban towns and cities from improving their local broadband, even if locals vote to approve such a measure. HB 2108 is dubbed the Virginia Broadband Deployment Act, but it actually stops deployment. It's most key component is a restriction that prevents towns and cities from deploying their own broadband networks if there's an incumbent ISP offering speeds of 10 Mbps down, 1 Mbps up to 90% of the state.

The bill is being heavily promoted by the Virginia Cable Telecommunications Association. Virginia is only the latest state to consider such laws. Missouri is also contemplating a similar restriction in SB 186, which places numerous restrictions on how municipal broadband (or public private partnerships) can be drafted, voted on, and funded. "Frequently, the efforts are framed by ISPs and their PR allies as taxpayer disasters waiting to happen," writes Karl Bode. "But these business models are like any business model: some are good, and some aren't. Often overlooked is the fact that these towns and cities wouldn't be getting into the broadband business if they were happy with the service they're getting. And instead of shoring up their service and competing, ISPs like AT&T, Comcast, CenturyLink, Charter and others are happily buying state laws to ensure they never have to."[183]

Summary of Virginia Broadband Deployment Act. Provides that a locality or a locality's affiliate may own and operate a broadband or Internet communications system, including ownership or lease of fiber optic or other communications lines and facilities, to provide broadband expansion services if a variety of conditions are met, including a report or study by an independent consulting firm knowledgeable and experienced in analyzing broadband deployment, such as the Center for Innovative Technology, which report or study specifically identifies any unserved areas. An unserved area is an area in which broadband speeds are not generally available from any provider. The bill defines "broadband speeds" as average Internet speeds of both 10 Mbps or more download and 1 Mbps or more upload. A locality or a locality's affiliate that seeks or desires to provide "overbuild broadband services," shall not do so unless it complies with various operating requirements. The bill defines "overbuild broadband services" as broadband or Internet services offered by a locality or its affiliate in exchange for compensation that do not qualify as internal government services or broadband expansion services. The bill also repeals several disclosure exclusions related to local telecommunications services that currently exist under the Freedom of Information Act (§ 2.2-3700 et seq.).[184]

January 13, 2017: Ting to Connect Their First Customer in Holly Springs

The Triangle Business Journal reported on January 13, 2017 that after a process that’s spanned fifteen months, Ting is about to pull the trigger on fiber internet in Holly Springs as the first customer gets connected. Holly Springs officials will join Ting on January 17, 2017 at an address on Dexter Ridge Drive the fiber team said in a media invitation. There's been a lot accomplished since October 2015 when Ting announced it was assessing a plan to bring ultra high-speed internet to Holly Springs. Tucows CEO Elliot Noss said in the Tucows November, 2016 earnings conference that Ting had competencies in alignment for a rollout – and, more importantly, that it could make the math work. Noss told investors that spending about $2,500 to $3,000 per customer yields a recurring margin of about $1,000. He said the goal is to achieve 50 percent penetration in five years in the fiber cities Ting serves.[185]

Phase 1 construction is now complete in the neighborhoods of Holly Glen, Braxton Village and Holly Pointeand construction is underway in the Phase 2 neighborhoods of Oak Hall, Windcrest, Morgan Park, Windward Pointe. “We’re through the ‘dirt and hard work’ phase of construction here in Phase 1,” said Adam Eisner, VP Networks, Ting Internet. “While construction of the larger network in Holly Springs is ongoing, we’re very happy to be able to start getting people connected with crazy fast fiber Internet here, starting today.” “Ting has demonstrated its commitment to Holly Springs, and that’s exactly what we look for when working with the private sector,” said Holly Springs Mayor Dick Sears. “The citizens of Holly Springs deserve the best Internet access to allow them to telecommute, to inspire kids with the possibilities technology brings and to keep Holly Springs growing at the impressive pace we’ve been driving.”[186]

Chronology of Ting Fiber Rollout in Holly Springs

Following is the chronology of Ting Fiber rollout in Holly Springs from the initial announcement in October, 2015 to the first live customer in January 2017:

January 12, 2017: Brad Burnham Joins Tucows Board of Directors

Brad Burnham Joins Tucows Board of Directors. Burnham is a managing partner at Union Square Ventures. “Tucows, with Ting in particular, has huge ambitions right now.” explained Tucows CEO Elliot Noss. “We are providing core services in mobile and fixed Internet and competing with some of the largest, most successful companies in the world, like AT&T and Comcast. But we want to challenge pricing conventions, offer far better experiences, contribute more to local communities and create greater returns for investors. In that regard, we are holding ourselves up against the kinds of companies in Brad’s portfolio. We want to be that usable, delightful, bold and innovative. Brad might be singularly qualified to help us with that challenge.” Photo: Burnham at Poptech 2012 by Thatcher Cook for PopTech Flickr Creative Commons. Attribution-ShareAlike 2.0 Generic (CC BY-SA 2.0)

Reuters reported on January 12, 2017 that Brad Burnham has joined Tucows' board of directors.[187]

"On January 12, 2017, the Board of Directors (the "Board") of Tucows Inc. (the "Company") increased the size of the Board to seven members and, upon the recommendation of the Corporate Governance, Nominating and Compensation Committee of the Board, appointed Brad Burnham to the Board as a director, with a term expiring at the Company's 2017 Annual Meeting of Shareholders. There were no arrangements or understandings between Mr. Burnham and any other persons pursuant to which Mr. Burnham was selected as a director of the Company. The Board has determined that Mr. Burnham is an independent director in accordance with the NASDAQ listing standards. Mr. Burnham will be compensated pursuant to the Company's independent director compensation plan including, without limitation, an initial grant of options to purchase 4,375 shares of the Company's common stock at an exercise price per share that is equal to the closing price per share of the Company's common share as reported on the NASDAQ Capital Market on the date of the grant."

“Tucows, with Ting in particular, has huge ambitions right now.” explained Tucows CEO Elliot Noss. “We are providing core services in mobile and fixed Internet and competing with some of the largest, most successful companies in the world, like AT&T and Comcast. But we want to challenge pricing conventions, offer far better experiences, contribute more to local communities and create greater returns for investors. In that regard, we are holding ourselves up against the kinds of companies in Brad’s portfolio. We want to be that usable, delightful, bold and innovative. Brad might be singularly qualified to help us with that challenge.”

Mr. Burnham added, "I am a huge fan of decentralized, bottom up, start-up innovation. I feel fortunate to have been able to work with companies that fundamentally transformed markets. I think Tucows has an exceptional opportunity to change the way we think about access to the Internet.”[188]

Burnham is a managing partner at Union Square Ventures. Burnham started working in information technology with AT&T in 1979, spun Echo Logic out of Bell Laboratories in 1989 and joined AT&T Ventures in 1993. Burnham co-founded TACODA in 2001 before joining Fred Wilson to create Union Square Ventures in 2003.[189] Burnham currently serves on the boards of Indeed, Pinch Media, Tumblr, Wesabe, Adaptive Blue, SimulMedia, UpCompany, Meetup, and Bug Labs.[190]

Union Square Ventures (USV), is an American New York-based venture capital firm, that manages assets totaling $1 billion as of March 2016. The firm is one of the top returning venture capital funds in the world, its 2004 fund returning 13.91 times cash-on-cash with an IRR of 67.0%. The firm has had a billion dollar exit every year since 2011 including Zynga ’11 at 7.7B, Indeed ’12 at 1.4B, Tumblr ’13 1.1B, Twitter ’13 at 14.2 B, Lending Club ’14 at 5.42B, Etsy ’15 at 1.78B and Twilio ’16 at 1.23B.[191]

"I believe that free market capitalism has created enormous amount of wealth for a very large number of people," says Burnham, "and that the alternative systems have not succeeded in creating that amount of wealth. I think that the peer economy is a logical evolution of free market capitalism. The large incumbent bureaucratic hierarchies that dominate sectors of the existing economy actually constrain free market capitalism, because they've gotten to a point where they control policy and politicians, and affect the ability for people to compete, and stuff like that. I think the peer economy is an extension of that free market capitalism."[192]

January 4, 2017: TCX Reaches New Closing High, Market Cap Exceeds $400 million for First Time

Nasdaq reported that Tucows stock (TCX) rose 1.00 points to reach a new closing high of 37.45. Tucows market cap also exceeded $400 million for the first time with a market cap of $402,890,000. Tucows made new closing highes on January 9, 2017 closing at 37.95, and January 13, 2017 closing ar 38.00.

January 1, 2017: After Millions Of Investment, Jurisdictions in Maryland Try To Achieve Potential Of Fiber Network

The Baltimore Sun reported on January 1, 2017 that three years ago, the state of Maryland completed one of the nation's largest public investments in a fiber optic network— installing hundreds of miles of cables that politicians said would secure fire and police communications, spur economic development and lead to faster, cheaper internet. The network, much of it financed by $115 million in federal stimulus funds, connects primarily to public buildings, like schools, libraries and police and fire stations but today much of that potential remains untapped, lying unlit like a 21st-century highway to nowhere. Bringing fiber to individual homes and offices is expensive — installation often requires negotiating permits and rights of way, and digging up streets. Across the country, investment by big internet providers such as Comcast and Verizon has lagged, especially in poor or rural areas.

Progress toward making greater use of the region's public fiber varies. The city of Westminster floated $21 million in bonds to install a fiber network. The city granted Ting, a unit of a Canadian telecom company, the exclusive right to lease its network in the beginning, but other internet providers eventually will be able to lease fiber and offer service to customers, competing on price. "It's a perfect division of labor," said Dr. Robert P. Wack, president of Westminster's City Council.

Officials in other jurisdictions said they want to use the networks to spur economic development but are still figuring out which model will work. "The question is, how do you enable a government-owned infrastructure to be used commercially?" asked Rick Napolitano, interim chief information officer in Anne Arundel. Plans "are in the incubation stages and will likely take many years to develop."[193]

December 22, 2016: Sandpoint Officials Are Finalizing Fiber Lease Rates to Ting

The Bonner County Daily Bee reported on December 22, 2016 that city officials in Sandpoint are working on finalizing a maintenance and operations plan for fiber, as well as a rate structure for leasing the infrastructure to private providers looking to expand service into the community. Ting, a fiber service provider that has been looking at expanding the service in Sandpoint, announced last week it plans to have fiber Internet available to the community in June or July of 2017, which City administrator Jennifer Stapleton said is contingent upon the city finalizing lease rates. Those rates are expected to be finalized in January, said Stapleton.[194]

December 21, 2016: Some Say Paying Centennial Councilmen to Oversee Fiber May Violate City Charter

The Villager reported on December 21, 2016 that the Centennial City Council voted 7-2 on December 12, 2016 to create a city-owned business operation to manage the leasing of Centennial’s multi-use underground fiber-optic network and the commission’s members, three of whom are to be sitting councilmembers, are slated to receive $350 per month. “City Councilmembers are policymakers, not to be involved in operational matters,” argued Councilmember Kathy Turley, the second no vote on the question. Assistant City Attorney Maureen Juran, who helped facilitate the drafting of the city charter says that the stipend did not rise to the level of substantive employment, but said she had not done extensive research into the question.

The move to create Fiberworks comes three years after Centennial voters overwhelmingly approved a measure allowing the city to lease its 48 miles of publicly owned fiber-optic lines. In October, Canada-based Ting announced plans to bring its high-speed internet services—or “crazy fast internet,” as the company says—to Centennial next year. Ting will be the first firm to do so since voters allowed the city to create a nonexclusive broadband network from fiber-optic lines that have so far been used only for traffic-signal operations and connecting public facilities. Centennial is required to lease its $5 million in fiber-optic lines on a nonexclusive basis, meaning the city cannot exclude any cable or internet companies.[195]

November 19, 2016: Ting Sponsors Annual Holiday Lighting Event in Centennial Center Park

The Centennial Citizen reported on November 28, 2016 that Ting sponsored the fifth annual holiday lighting event on November 19, 2016 in Centennial Center Park. Dancers from the Denver Ballet Theater Academy leaped and twirled to select pieces from "The Nutcracker" as about 4,000 people attended the event. After the "Nutcracker" performances, choirs from Newton Middle School and Creekside, Peakview, Peabody, Sandburg and Homestead elementaries performed holiday songs leading up to the tree lighting. The evening concluded with Mayor Cathy Noon and seven members of Centennial's city council surrounding Santa as he plugged in the holiday lights.[196]

November 9, 2016: Ninety-Five Colorado Communities Have Voted Yes on Broadband Internet Alternatives

The Denver Post reported on November 9, 2016 that 26 Colorado municipalities have approved ballot measures allowing them to explore the idea of offering their own broadband internet service joining 69 other counties and municipalities in the state — or 95 total, according to Community Broadband Networks — who voted in years past to opt out of SB 152.

However many of the municipalities are still be in the exploratory phase, if they’ve done anything at all. “A lot of communities are nervous and really prefer for someone else to come in and invest,” said Christopher Mitchell of the Institute for Local Self-Reliance, which tracked voting in 26 municipalities Tuesday on MuniNetworks.org. “But there are just not a lot of private companies that have the ability to come in and work with communities in a partnership today.”

One company that appears to be moving forward is Ting Internet, which hopes to latch on to Centennial’s plans to build a fiber network in the city. Ting, a division of Tucows in Canada, would offer gigabit internet to city residents by connecting to that main internet pipe. “It’s going really well. I’d be surprised and disappointed if we didn’t do it. But we haven’t put a shovel in the ground yet,” said Adam Eisner, Ting’s vice president of networks. ““What I’ve seen on the ground is we’re getting a lot of attention from different areas because of what we’ve been doing with our partnership in Centennial. There just aren’t a lot of providers that will go, ‘Yeah, we’ll go in on that.'”[197]

November 7, 2016: Tucows Reports Record Third-Quarter Profit of $4.7 million

Chart 1: Stock Price Chart for TCX from January 1, 2012 through November 7, 2016. In February, 2012, Tucows launched Ting, a mobile virtual network operator (MVNO). Ting's launch coincided with a rise in Tucows (TCX) stock price. Tucows' stock price has risen 975% since January 1, 2012. The S&P 500 has risen 68% over the same period. (Click on chart to expand.)
This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.
Incremental Contribution from Domain Services (Before Taxes and Other Expenses) (Click on chart to expand.)
Incremental Contribution from Ting (Before Taxes and Other Expenses) (Click on chart to expand.)
Tucows EBITDA Per Quarter (Click on chart to expand.)
Tucows Net Income Per Share Per Quarter (Click on chart to expand.)

AP reported on November 9, 2016 that Tucows reported third-quarter profit of $4.7 million or 45 cents per share on revenue of $49.1 million.[198]

See also:

Revenue: Quarterly Revenue Increased 11% YOY

Tucows announced on November 7, 2016 that net revenue for the third quarter of 2016 increased 11% from Q3 2015 to $49.0 million from $44.29 million for the third quarter of 2015.[199]

Profitability: Net Income for the Year Increased 50% YOY

Tucows announced on November 7, 2016 that net income for the third quarter of 2016 increased 50% to $4.7 million or $0.45 per share from $3.1 million, or $0.29 per share, for the third quarter of 2015.[200]

EBITDA: Adjusted EBITDA for the Year Increased 48% YOY

Tucows announced on November 7, 2016 that adjusted EBITDA for the third quarter of 2016 increased 48% to $8.5 million from $5.8 million for the third quarter of 2015.[201]

EBITDA: Tucows Reiterates Adjusted EBITDA guidance of $30 million for 2016

Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that Tucows is reiterating its existing adjusted EBITDA guidance of $30 million for 2016.[202]

EBITDA: Tucows Has Changed the Way the Company Computes EBITDA

Michael Cooperman told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that Tucows modified the definition for adjusted EBITDA in response to clarification guidance regarding non-GAAP measures issued by the SEC in May, 2016. "The SEC guidance indicated that adjusted earnings for deferred revenue may not be consistent with disclosure rules. Accordingly we have revised our definition of adjusted EBITDA to eliminate the adjustment for the effective net deferred revenue to reflect net revenue on an earned basis. For those of you wishing to compute our adjusted EBITDA in our prior definitions, this can be done with reference to our disclosure financials and our MD&A. Adjusted EBITDA using this new definition for the third quarter increased 48% to $8.6 million from $5.8 million for the corresponding period last year."[203]

See the *Calculation of Tucows' New Adjusted EBITDA under the SEC Compliance Update

November 7, 2016: Ting Mobile Growth Slows with 3,000 Net Adds in Q3

Number of Ting Mobile Customers Note: Ting started in February 2012. Prior to the earnings report for 2013:Q4 Tucows did not break out the number of customers or devices so the number of customers in Q1 through Q3 for 2013 is estimated. (Click on chart to expand.)
Gross Additional Customers Per Quarter (Click on chart to expand.) Note: In Q1 2016 Ting Mobile had a one-time influx of 7,000 customers, migrating from PlatinumTel Wireless, also known as PTel, that closed its doors.
Chart 6: Churned Customers Per Quarter (Click on chart to expand.)
Net Additional Customers Per Quarter (Click on chart to expand.) Note: In Q1 2016 Ting Mobile had a one-time influx of 7,000 customers, migrating from PlatinumTel Wireless, also known as PTel, that closed its doors.

Growth: Ting Mobile Had Net Adds of 3,000 Accounts and 8,000 Devices in Q2 2016

Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that Ting Mobile added over 3,000 accounts and 8,000 devices in Q3 to bring Ting's total to 147,000 accounts and 235,000 devices.[204]

Churn: Ting Mobile's Churn Rate was 2.8%

Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that churn was 2.8% in Q3. "We are seeing some successes with efforts intended to reduce churn and at the same time, the base continues to get slightly more challenging with the mix between carriers. We expect churn to rise again a bit in Q4 and then drop in Q1 and Q2."

Noss added that he expects monthly churns to average out to around 2.5% for the year.[205]

Profitability: Gross Margins for Ting Mobile Remain in the 45% to 50% Range

Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that after the recent price decrease and reductions in cost, Ting Mobile still slightly above the 45% to 50% gross margin target. "We expect this will come down as we see more data usage at higher levels. This may take a quarter or two to sort out and we will continue to watch it and keep you posted. We are of course thrilled to have more competitive data pricing in an increasingly data hungry world."[206]

Profitability: Price Decreases Have Not Had Much Impact on Gross Account Adds Yet

Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that Ting Mobile's price decrease has not had much impact yet on gross account adds. "Our new pricing was necessary more than newsworthy. As we continued to share our challenges brand awareness and we do expect that as we grow awareness, the price decrease will contribute positively to conversion. I've talked on prior calls about some of our key strategic directions with respect to gross adds and I want to give you an update on these. First, retail; as I said, we've seen a modest contribution from our distribution at Kroger and Staples locations but it has not given us a material lift. These partnerships offer presence but not a lot of push. We will continue to work these opportunities and others. Now that we have experience, they are easier to execute and do give us a bit of mainstream exposure and credibility but we do not expect to invest much more there or get much more there."[207]

Affiliates: The Challenge in Affiliate Relationships is Finding Scale

Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that the challenge in affiliate relationships is finding scale. "Most of the large national affinity groups have exclusivity with a major carrier, the largest private organizations and enterprises tend to push their employees to the carriers that they use at an enterprise level. So we need to work around the edges and grow through smaller partnerships. We are doing that and we are finding wins but just like our direct response efforts through bloggers, podcasters, social media and other channels, we expect affiliates to be an efficient slowly growing contributor to our acquisition program rather than a step change. Through the last few quarters we have learned better what winners look like and use that learning to try and find more. We will continue to grind here."[208]

Sales Process: Ting Mobile Continues to Optimize Sales Capability

Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that Ting Mobile's continues to focus on strengthening its sales capability from direct response drivers of traffic and calls to an optimized purchase path to sales processes and people to close deals on the phone.

"We have made progress there and as we've begun to have more confidence in both, our tracking and our performance, we have started to look more aggressively for sources of potential new customers. Closers that includes simply increasing our advertising spend and familiar platforms like Ad Words and Twitter where we can test landing pages, special offers, phone tactics, lead capture tactics, retargeting and more. Slightly further out, we're experimenting with targeting and digital display campaigns that model prospects against our current customers."[209]

Marketing: Ting Mobile Has Produced an Infomercial

Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that Ting Mobile has produced a Ting infomercial.

"In the next couple of weeks, we're going to test an entirely new direct response vehicle that we think can also give us some of the bigger, broader awareness we need," said Noss. "This is a full half hour program in the traditional infomercial format, it is heavily focused on a Sensex [ph] spirited customer testimonials leveraging Ting's biggest asset, its reputation. As with other infomercials, it is not in the voice that we usually use to talk with our customers but it does a wonderful job of illustrating how Ting treats customers better and costs them less, and we are hopeful that it will be very appealing to an audience that is less technical. And as I have said politely less than our current base. We will be running at a lower rates during late night and early morning hours for a couple of weeks in November. If we like the traffic and calls that generate, we will look to scale in the New Year.

This is a slightly larger bet than we've made in the past, I think mid-six figures but given the size of the business and the size of the opportunity, we feel it's well worth it is tiny relative to media spend in the category."

In answer to a question from Matt Miller from Bayview Asset Management on concerns about an infomercial approach to brand editing, Noss responded that that he had no concerns. "What would I say is none. So I think the way that we experienced it when we first considered it and really throughout the process is that the response was more emotional than rational. So I think that there is it's a very, very different voice, which is what I tried to call out in the script there than we usually talk to our customers, we usually talk to our customers more conversationally, we usually talk to them in a little more sophisticated way. We have to respect that there's a lot of great product that is moved in a lot of high volume through these channels, and I think we I don't mean you and I, I mean we internally here. And I think that probably what gave us -- I mean when you see it and happy to let you, when you see it, it certainly is an infomercial. There's no -- it's clear that that's what it is, but I will also tell you that the biggest Body of topic in there is customer testimonials, and those are completely consistent with the way that we approach our communication. And had completely consistent with everything that we would have wished and hoped our customers would say of us. So I think that what sometimes you serve a dish that you might not eat regularly and it serves you well."[210]

November 7, 2016: Ting Internet Is Moving Forward

Strategy: Ting Internet is Focusing on Expanding Supply to Meet Demand

Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that "on Ting Internet, Q3 was primarily about expanding supply to meet demand."[211]

Strategy: 2016 Has Been a Year of Learning for Ting Internet

Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that 2016 has really been a year of learning for Ting Internet.

"In Ting Internet, we have learned the nuts and bolts of operating a fiber channel. We have learned how to work city opportunities through a pipeline. We have learned how to start a build in a new market dealing with everything; from design to staffing. We have done it all while spending wisely. Most importantly, we have learned that Ting Internet plays to our organizational strengths of strong back office, excellent customer service, attention to detail, and sense of community and building long-term win-win partnerships with communities in the same way we have historically done so with customers, employees and investors."[212]

Charlottesville: Ting Internet has Doubled its Install Team

Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that in Charlottesville both Ting Internet's network and customer base continue to grow and Ting Internet has doubled the install team. "This allows us to handle more installs every day and has helped to produce continual months of record new customer install. It also allows us to extend the network quality more quickly to the neighborhoods with the most pre-orders and to housing developments and multi-dwelling units that want to offer gigabit space to the residents. It also provides golden learning for future markets."[213]

Charlottesville: Ting Internet Now Passes Over 10,000 Potential Customers

Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that Ting Internet's "network in Charlottesville now passes over 10,000 potential customers and we will continue to expand aggressively through 2017."[214]

Westminster: The Next Wave of Construction is Underway

Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that in Westminster where the city is building the network, the next wave of construction is underway. "So I've said we're only at about 300 serviceable addresses right now in Westminster. The city projects another 2,700 addresses finished by this time next year.[215]

Holly Springs: Ting Internet Expects to Light Up the First Customers by the End of 2016

Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that in Holly Springs Ting Internet "expects to light up the first customers by the end of the year and get to around ten thousand serviceable addresses throughout Holly Springs by the end of 2017."[216]

Centennial: Ting Internet Hopes to Begin Construction in Q2 2017 and Start Lighting Up Customers in Summer 2017

Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that in Centennial Ting Internet "hopes to be able to begin our construction in Q2 2017 or so and start lighting up customers sometime in the summer."

"It will be our largest single town to date and we impressed with how quickly Centennial reaches consensus and makes decisions and how willing it embraces private partnerships to get things done. We have already started taking preorders and they have begun construction on their core fiber network. We hope to be able to begin our construction in Q2 2017 or so and start lighting up customers sometime in the summer. I'm confident Centennial will be a great partner with a great community of savvy-forward thinking residents and businesses. Centennial is also still working on the buildout of their core fiber network. Pre-orders there continue to be strong, we hope to start lining up the first customers there in mid-2017 as well."[217]

Profitability: Ting Internet Expects to Have 85,000 Serviceable Addresses Within 5 Years with the Existing Five Towns

Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that "altogether and in the state, these five towns will represent about 85,000 serviceable addresses, and 50% adoption after five years an average margin of $1,000 a year for customer. You have a business right there that would surpass the current Ting Mobile and build gross margin."[218]

Profitability: Tucows Continues to Feel Positive About their Investment in Ting Internet

Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that Tucows continues to feel good about the numbers and their investment in Ting Internet, "specifically spending $2,500 to $3,000 per customer for a recurring margin of about $1,000 year."

In answer to a question from Patrick Retzer, Noss reiterated that he sticks by his estimate of about a 50% penetration rate after five years and a $1000 of gross profit per subscriber. "Okay. So just on, the -- we're looking at when the companies reach that point, gross profit of $42.5 million a year," said Retzer. "I mean and to put that in perspective, your gross profit for the first nine months of the year for their entire company was $46.6 million."[219]

Expansion: Ting Internet Does Not Expect to Announce Any Additional Towns Before the End of the Year

Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that Ting Internet does "not expect to announce any additional towns between now and the end of the year. With the five current projects we will be in execution phase for a bit. We continue to work the pipeline but we have plenty of building to do with the markets we've announced."[220]

Expansion: Ting Internet Doesn't See Hurdles in Adding to its Major City Pipeline

In answer to a question from Matt Miller from Bayview Asset Management, Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that Ting Internet doesn't really see much in the way of hurdles to adding to the pipeline.

"The limiting factor there is our ability to want to sort of increase the breadth of what we take on or the surface area of attack, we're really treating it very seriously. We want to be great at it and we think to rush it would be a mistake. So there are there is -- there is it's not hurdles that we see there is just sort of us keeping ourselves in check."[221]

Challenges: Ting Internet Sees Two Potential Hurdles Affecting Their Penetration Targets

In answer to a question from Matt Miller from Bayview Asset Management, Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that "in terms of hurdles around penetration, I think there is two that I would call out, one internal one external."

"The external we really haven't yet seen, we haven't seen I won't say yet as if it's an eventuality but we do expect it, a strong competitive response from competitors in our markets, we think a part of that is because it's early days, the first and most likely place we would see that would be Charlottesville. I think it's an expectation, we certainly have of bring it on attitude, but we do respect the competition and we well understand that that's going to be something that we would be -- we would minimize it to our churn. So, I think we -- that's kind of its unknown and it's certainly a hurdle.

The internal hurdle that I reference is we really do think that what we're trying to do on a marketing level is a bit unique. When I talk about hyperlocal marketing on a national scale, how do you go into a location the size of Holly Springs, or Sandpoint or Centennial and really achieve national brand scale in that small footprint. It takes new and innovative thinking and approaches and techniques and we're really just at the beginning of that. I've got real confidence in the folks that are handling it. I think people are thinking about the problem in the right way and I think it's like a lot of other things, it's going to take experience and practice and learning."[222]

Challenges: Ting Internet Does Not See a Large Competitive Threat From 5G

In answer to a question from Daniel Asoski from Asoski Capital regarding regarding 5G risks when it comes to the fiber business, Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that Ting Internet is very comfortable with the idea that fiber is the best, fastest, most reliable medium or for internet access.

"We think that there is the fact that it's light over glass, really puts us bumping up against some of the limits that physics provides over 5G. In the longer term, I think most people who talk about it know that we're still three to five years away from a standard for 5G. So I don't mind saying that we think 5G. provides more opportunity than it does a threat in that, when you project out a few years, the thing that 5G will need the most is to get on a fiber backbone as quickly as possible and the one thing that is unmistakable truth is that in Ting towns, we will have by far the richest and deepest fiber network.

Meaning if you want to have a great 5G coverage in the same town you need to speak to us about back call, and I think I can say that we're in the back call business, you should model that in four years; I could say that because we're talking about 5G which again is three to five years away. So, we're not worried when it comes to five or about tech ups lessons.

And then when you talk about sort of what are we most worried about, I think that that it will be by far it's executing around these opportunities; don't take on too much too fast, but take on enough that we're continually challenging ourselves. I talked just in the previous set of questions about competitive response from some of the existing competitors, that's something again that we take very seriously. And I think that the one of the things that we don't worry about is whether the demand for better, faster, cheaper, more reliable internet access, will continue to increase significantly. I hope that gets at it for you."[223]

CapEx: Tucows Expects CapEx for Ting Internet to Come in at less than $10 million for the Year

Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that Tucows expects CapEx for Ting Internet to come in it less than $10 million for the year."

"There is nothing negative in this lowered number. Simply learning about the nature and pace of fiber deployments. We will apply this learning to 2017 and beyond. In addition, when we laid out our guidance for the year. We share what we expected to spend, roughly $2.5 in 2016 on Ting Internet at an operating level. At this point, we think this number will more likely come in at $3.5 million to $4 million. Again, we continue to grow and learn and are very happy with the spend."[224]

CapEx: Ting Internet Expects to Begin Deploying Capital Toward Fiber on a Greater Scale in 2017

Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that "as we look towards 2017 and beyond, we expect to be deploying capital towards fiber and other significant opportunities on a greater scale than in the past."

"We feel that the combination of operating opportunities and capital deployment opportunities that sit in front of us really play to our strengths and bode well for our ability to provide outsized returns for years to come."

In answer to a question form Hubert Mark from Cormark Securities, Noss added that you're going to see CapEx rise pretty significantly year-over-year. "here is a lot of boring and digging to be done simply in those markets. So we will see the increase pretty significantly and in terms of the pipeline, I think we're learning that cities take a long time to come through on one hand and on the other, that -- when you're doing as a fiber build, there is a lot of work involved. And so what I was trying to do a little bit when I was laying out simply the number of addresses that you see in these markets is to say look, there is a lot here, there is a business here already that by no means means we're not going to be adding markets in 2017, I fully expect us to but it's to say that's probably not the most important variable to track. And as always, we'll keep you well in the loop as we go along."[225]

Google Fiber: Google is Finding that Fiber Installation is Messy, Unpredictable, and Does Not Perfectly Match Their Skills

Elliot Noss talked to analysts during the 2016 third quarter earnings conference call on November 7, 2016 about Google Fiber.

"Google has built one of the largest and most successful company in the world with unparalleled achievements in advanced computer science and organizational scaling. They have astonishing aspirations to cure highway traffic and death, among other things. Like any business, they prioritize among their opportunities based on fit with their core competencies, competitive landscape, and potential return on investment.

Having just spent a quarter digging in the dirt in Holly Springs North Carolina. It does not surprise me that building fiber networks would not be Google's highest priority. It is messy and unpredictable. It does not perfectly match their skills. We also think that they have been clear that they too are not abandoning the work but are taking time to learn its complexities. As for us, we don't mind getting dirty. Billing, provisioning, customer service and process innovation are the keys to this business. Those match our core competencies well. Google will also in parallel be pushing advances in cutting edge wireless technologies. We think wireless has an important place in the total connectivity toolkit but we are looking at the fiber business a ground level and we like what we see."

In answer to a question from Patrick Retzer, Noss added that "what we haven't seen yet is one of the cities that Google explicitly pulled back from, reaching out to us but I would note Pat, that I really when people talk about them pulling away or pulling back, I really think it's more accurate to describe them as taking stock and recognizing, that they're in I want to say it's their business not mine; So don't quote me, I want to see the eleven markets that they're staying in and that we're looking at five markets and saying; wow this is plenty for us to really sort of refine our game here and I think they're looking at the markets they're in and saying the same thing.

It's an operationally complex business and I looked at their announcement in some ways sort of a positive reinforcement of our view that this was complicated operationally and that the right thing to do was kind of get okay, and then good and then great. So, we felt whatever really smart people like they have at Google kind of see something through the same lens as we do, we're quite happy with that."[226]

November 7, 2016: Domain Services Continues its Track Record of Steady Performance

Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that "our domain services business continued its track record of steady performance in the third quarter with year-over-year growth bolstered by the incremental contribution of the international wholesale-reseller channel of Melbourne IT which we acquired in April of this year." [227]

Growth: Total Registrations Were Up 7% YOY

Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that "total registrations for Q3 were up 7% year-over-year with strong growth in open SRS renewals and the addition of the Melbourne IT names. The number of new transactions was more or less flat year-over-year as growth in open SRS and the contribution of the Melbourne IT channel were offset by the impact of a single reseller."[228]

Renewals: Domain Renewals Continue in their Historical Range of 74%

Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that "our renewal rate was consistent with its historical range at a healthy 74%."[229]

Profitability: Gross Margins for Domain Names Continue to Benefit from the Shift in Mix to Higher Margin Products

Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that "Q3 is one of our strongest quarters recently for gross margin as we continue to benefit from the shift in mix to higher margin products."

"In terms of new GTLDs, Q3 saw a notable add with the launch of duck shock [ph] towards the end of September. The strength of the launch push the number of new GTLD registrations as a percentage of all com-net and new GTLD registrations during the quarter upto about 8% above our historical rate of around 5%. As noted last quarter, top blog will go live this quarter and launch schedule for November 21. In terms of reseller participation around new GTLDs, the number of resellers with at least one new registration increased by 14% year-over-year and 8% sequentially to nearly 2,900. "[230]

Growth: The Transfer and Migration of Customers from Melbourne IT Has Been Smoothly and Successfully Completed

Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that "the acquisition and migration of customers from Melbourne IT and the shutdown of their platform has now been smoothly and successfully completed. This bodes well in a mature market which can present tactical opportunities for a scale player that provide excellent cash-on-cash returns."[231]

Growth: Hover Presented Another Quarter of Strong and Steady Growth

Elliot Noss told analysts during the 2016 third quarter earnings conference call on November 7, 2016 that Tucows' retail business, Hover, "delivered another quarter of steady strong performance."

"Revenue and gross margin once again processed strong year-over-year growth with gross margin up 11%. The Hover customer base also showed strong year-over-year growth, up 16% from the end of Q3 last year and 4% from the end of Q2 this year. Our renewal rate held steady at 81%, well above the industry average."[232]

October 28, 2016: Westminster has its Sights set on an Open-Access Municipal Fiber Network Model

American City and County reported on October 28, 2016 that Westminster has its sights set on an open-access municipal fiber network model to provide a multitude of services without much commitment to residents. In Westminster’s model, the city owns and builds out the fiber network infrastructure. However, a private company called Ting serves as the network’s operator and wholesaler, Westminster City Council President Robert Wack says. In this role, Ting connects customers with the network, bills them and handles ongoing customer service. Ting is currently the network’s sole Internet service provider and leases network access from Westminster.

Once Ting meets certain milestones related in part to growing its customer base, it will begin leasing network access to other service providers, who will offer their services to customers via the fiber network. Wack estimates that Ting will begin acting in this wholesaler role in about three years. “The end state is that we will have multiple providers using the same fiber network to create a real choice for our residents without any barriers to switching,” Wack says.

Currently, Westminster’s fiber network passes about 400 premises, which include residences, government buildings, businesses and open lots. Fiber passing over 2,000 residential buildings and lots is currently under construction, and Wack says Westminster will likely connect all of its residences and businesses to the fiber network in two to three years. Westminster is financing the network’s construction through a $21 million general obligation bond, according to a report by the Institute for Local Self-Reliance.[233]

October 25, 2016: Google Fiber Cuts Staff by 9%, “Pauses” Fiber Plans in 11 cities

Ars Technica reported on October 25, 2016 that Google Fiber is laying off or reassigning about nine percent of its staff as well as "pausing" or ending fiber operations in 10 cities where it hadn't yet fully committed to building. Google Fiber chief Craig Barratt will step down from his post and remain only as an adviser. He won't be replaced immediately. According to Jon Brodkin, Google Fiber apparently has not hit its subscriber goals, and fiber construction is a costly endeavor. While the company isn't giving up on fiber entirely, it may be able to deploy Internet service at a lower cost using wireless technology.[234]

"Just like Google Glass — the company's ill-fated attempt to build an augmented-reality visor — Google Fiber may be just a little ahead of its time. The thing about Fiber and businesses like it is that most consumers simply can't find a use for that much bandwidth yet. Google Fiber provides gigabit connectivity, which is orders of magnitude faster than what many Americans get in their homes today," says Brian Fung. "Our consumption of broadband is undoubtedly going to increase as we connect more devices to the Internet and those devices communicate in more sophisticated ways. But for now, Fiber is reportedly missing its subscriber goals, indicating there may not be enough demand for that level of service."[235]

According to Mark Bergen, some executives previously described Google Fiber’s business model as working best in mid-sized cities. In those markets, the costs of fiber installation isn’t as high and incumbent telecom companies have less of a footprint. Moving into big cities was a contentious point inside Google Fiber, according to one former executive. Leaders like Barratt and Dennis Kish, who runs Google Fiber day-to-day, pushed for the big expansion. Others pushed back because of the prohibitive cost of digging up streets to lay fiber-optic cables across some of America’s busiest cities. "I suspect the sheer economics of broad scale access deployments finally became too much for them," said Jan Dawson, an analyst with Jackdaw Research. "Ultimately, most of the reasons Google got into this in the first place have either been achieved or been demonstrated to be unrealistic."[236]

October 17, 2016: Video of How Ting's Fiber Network in Holly Springs is Being Built

Part 1: Dirt and Hard Work


Building a fiber network is a big job. Ting aims to keep things as surgical and precise as possible. In part one of this series titled Dirt and Hard Work, we looked at the process of putting conduit into the ground. The conduit carries and protects the tiny glass fibers that pipe crazy fast fiber Internet into homes.

Part 2: Light at the End of the Tunnel


Building a fiber network is no mean feat. In part one of this series, Dirt and Hard Work we detailed the process of putting conduit, the protective carrier medium for the delicate fiber optic cable, in the ground.

October 5, 2016: Three Years Ago Centennial Voters Approved a Measure to Allow the City to Create a Nonexclusive Broadband Fiber-Optic Network

Centennial Voters Approved a Measure to Allow the City to Create a Nonexclusive Broadband Fiber-Optic Network. Three years ago voters in Centennial approved a measure allowing the city to lease its 48 miles of publicly owned fiber-optic lines and now Canada-based Ting has plans to bring its high-speed internet services—or “crazy fast internet,” as the company says—to town next year. Photo: Ting

The Villager reported on October 5, 2016 that three years ago voters in Centennial approved a measure allowing the city to lease its 48 miles of publicly owned fiber-optic lines and now Canada-based Ting has plans to bring its high-speed internet services—or “crazy fast internet,” as the company says—to town next year. Ting, an internet and wireless service provider, plans to begin hooking up to Centennial’s system by the end of the year and provide service by mid-2017. It would be the first firm to do so since voters allowed the city to create a nonexclusive broadband network from fiber-optic lines that have so far been used only for traffic-signal operations and connecting public facilities. The arguably underused city asset has been valued at $5 million..

Mayor Cathy Noon said it was an honor that Ting chose Centennial as its first Colorado market, after Centennial became among the first cities in the state to allow such deals. “The critical infrastructure has been in place throughout the city. We just needed the opportunity to partner with an organization such as Ting to provide service to our residents and businesses,” she said. Because the deal is nonexclusive, it is still possible for other companies to lease into Centennial’s fiber-optic network.

Ting is expected to provide faster and comparably priced Internet service at multiple tiers to residents and businesses in Centennial, offering what Ting says will be an improved alternative to internet sources currently available. “If you’re getting internet from your phone company or your cable company, you are getting it based on those technologies, which are not purpose-built to deliver internet, unlike fiber which is,” said Adam Eisner, VP of Networks for Ting Internet. “This is basically the fastest, strongest internet you’re going to get on a residential basis in North America.” Although service will initially be offered only in Centennial proper, Eisner says there is no reason Ting could not eventually grow into surrounding communities. “Once we build a network through town, it’s very easy to keep expanding, so we wouldn’t rule that out,” he said[237]

See also An Estimation of the Potential Impact of Fiber Penetration in Centennial on Tucows' Quarterly Earnings October 10, 2016

October 3, 2016: Tucows Insiders Sell Stock

Insider Trading Watch reported on October 3, 2016 that EVP Human Resources Goertz Carla Anne sold 20,708 shares for $665,247 on September 29, 2016.

Director Karp Allen sold 5,000 shares at an average price of $39.89 on September 29, 2016.

Director Nathan Schwartz sold 13,125 shares on on September 26, 2016.

Director Ralls Rawleigh Hazen IV sold 22,695 shares for $666,908 on September 23, 2016.[238]

September 29, 2016: Tucows Begins to Send Expired Domain Names to GoDaddy Auctions

Domain Name Wire reported on September 29, 2016 that GoDaddy Auctions has begun auctioning off Tucows’ expired domain name inventory. This is the first time GoDaddy has sold a third-party registrar’s expired domain name inventory. Tucows had been sending its expired domain name inventory to SnapNames, which is now a Web.com company. Before that, it partnered with NameJet. The inventory is direct-transfer inventory that is sold before it goes through the entire deletion cycle. Domain names that make it to pending delete can be picked up by any expired domain name service. "We can confirm that GoDaddy has launched a new product line to assist partner registrars to monetize their expiring domain feed using our GoDaddy Auctions platform," said GoDaddy Paul Nicks, VP of Aftermarket. "We launched today with one partner and will continue to add new partners as we expand the program. We are very excited about this as it allows more choice for our domain investors that use GoDaddy Auctions and provides another choice for registrars as well. Any registrar interested in joining our new expiry platform should contact Bob Mountain bmountain (at) godaddy.com, VP of Business Development for our Aftermarket."[239]

September 28, 2018: Tucows Stock (TCX) Increases $2.06 for New Closing High of $33.25

Tucows Stock (TCX) increases $2.06 for New Closing High of $33.25. In February, 2012, Tucows launched Ting, a mobile virtual network operator (MVNO). Ting's launch coincided with a rise in Tucows (TCX) stock price. Tucows' stock price has risen 993% since September 28, 2011. The S&P 500 has risen 87% over the same period. (Click on chart to expand.)
This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.

Tucows stock (TCX) rose $2.06 on September 28, 2016 for a new closing high of $33.25 on volume of 343,377, more than four times the normal average number of shares traded (73,136).

Tucows' stock price has risen 993% since September 28, 2011. The S&P 500 has risen 87% over the same period. In February, 2012, Tucows launched Ting, a mobile virtual network operator (MVNO). Ting's launch coincided with the beginning of the rise in Tucows (TCX) stock price.

The market capitalization of Tucows now stands at 334 million.

Tucows stock has risen 16.9% over the last five trading days coinciding with Tucows' announcement on September 22, 2016 that Ting Internet will bring its fiber-optic network to the 107,000 residents of the Centennial, CO as early as next year. “In round terms, there are about 37,000 households in Centennial and about 4,000 to 5,000 registered businesses,” said Centennial councilman and mayor pro tem Charles “C.J.” Whelan. “If they get 20 to 30 percent penetration here, that will be a strong hit for [Ting].”

September 23, 2016: Ting Uses Adrian and Calix Solutions in its Gigabit Networks

Lightreading reported on September 23, 2016 that Ting uses a mixture of Adtran Inc. (Nasdaq: ADTN) and Calix Networks Inc. (NYSE: CALX) solutions in its gigabit networks, with ZyXEL Communications Corp. routers deployed to customer homes.[240]

September 23, 2016: Tucows Reaches 250,000 new gTLDs

Tucows OpenSRS blog reported on September 23, 2017 that Tucows has reached a significant milestone: 250,000 new gTLDs sold. Gustavo Arruda says that there are a couple of things tucows has learned dealing with the new gTLDs:

  • Adoption is now steady: The adoption curve shows a steady growth. Every month, the number of resellers who have sold at least one new gTLD increases, and we expect this to continue over the next few months and years.
  • Europe is still leading the charge: More than half of our new gTLDs have been sold in the EMEA region, largely due to the success of regional TLDs such as .LONDON and .AMSTERDAM.
  • User experience continues to be an issue: It is a challenge to present hundreds of top-level domains in a way that is both user-friendly and relevant. Users continue to be presented with endless drop-down menus, and we know well that an overwhelming choice can impact the experience tremendously. Users are often faced with suboptimal UIs. The resellers who are seeing the most success are the ones focused on solving the user experience issue.
  • End-user awareness is close to non-existent: The lack of awareness is one of the main issues with new gTLDs, and we should be asking ourselves: whose job is it to create awareness around them? Registries have not done a good job. Registrars can’t effectively market 400+ TLDs, resellers are overwhelmed by choice and end users are left on their own.

Arruda says that he expects Tucows to sell the second batch of 250,000 new gTLDs a lot faster than we sold the first, that the sales gap between Europe and North America will close considerably, and that end user awareness will be marginally better than it is today. "As a registrar, our view is that new gTLDs continue to be an interesting opportunity, and we continue to be excited about the potential. The biggest challenge for registries and registrars is to learn how to work together in an environment that is radically different from what it used to be three years ago. If registries and registrars can collaborate effectively, we may be able to tell a better story."[241]

September 22, 2016: Ting Looking for 20 Per Cent Fiber Penetration in Centennial in the First Year

The Denver Post reported on September 22, 2016 that if enough people are interested, Ting Internet will bring its fiber-optic network to residents of the city as early as next year and according to Centennial councilman and mayor pro tem Charles “C.J.” Whelan Ting wouldn’t have gotten this far without researching the demand. “In round terms, there are about 37,000 households in Centennial and about 4,000 to 5,000 registered businesses,” Whelan said. “If they get 20 to 30 percent penetration here, that will be a strong hit for them.”

Ting charges $89 a month per household for 1 gbps service up and down, plus a $200 installation fee, confirmed Tucows CEO Elliot Noss while businesses pay $139 a month. You can cancel anytime. But in order to get fiber to a user’s house, Ting will either dig up streets to lay cables in the ground or run them in the air over existing telephone lines. If you leave the service, Ting owns the lines. “There are very few companies other than Google and ourselves that are doing what we’re doing,” Noss said. “Generally for us, communities are approaching us.”

Noss shared the economics of Ting entering a market: they need a 20 percent penetration rate in the first year and 50 percent after five years. The cost of connecting a home is about $2,500 to $3,000

Centennial’s partnership with Ting isn’t exclusive, Whelan said. “They are the first at this point, the only ones that have stepped out to add this to our city,” Whelan said. “If there are others, we would look at them as well. Ting has stepped up and we are excited about it.” In the Denver area, Comcast and CenturyLink are offering gigabit internet. But CenturyLink’s service is available only in certain locations. Comcast offers up to 2 gbps for residential customers for $300 a month with a two-year contract.[242]

September 21, 2016: Ting to Bring Fiber to Centennial, Colorado (Pop 107,000)

Ting to Bring Fiber to Centennial, Colorado (Pop 107,000). Ting will be bringing fiber to Centennial, CO, population 107,201 (2014 Census), the largest Ting town by population to date. “Centennial has been refreshing to work with", said Elliot Noss, CEO of Tucows. “Centennial’s approach to partnering with Ting has been excellent. They have found a great balance between being business-friendly while deeply serving the needs of their citizens. They understand how these need not be in conflict.” Photo: Kent Kanouse Flickr Creative Commons Attribution-NonCommercial 2.0 Generic (CC BY-NC 2.0)

Tucows announced on September 21, 2016 that Ting will be bringing fiber to Centennial, CO, population 107,201 (2014 Census), the largest Ting town by population to date. “Centennial has been refreshing to work with", said Elliot Noss, CEO of Tucows. “Centennial’s approach to partnering with Ting has been excellent. They have found a great balance between being business-friendly while deeply serving the needs of their citizens. They understand how these need not be in conflict.”

“Having Centennial as Ting Internet’s first Colorado market is an honor and one that we are very excited about. The critical infrastructure has been in place throughout the City, we just needed the opportunity to partner with an organization such as Ting to provide service to our residents and businesses,” says Centennial Mayor Cathy Noon. “I would like to recognize and thank Council Members Whelan, Piko and Lucas for serving on the fiber steering committee. Their leadership and guidance has led us to see the City’s dark fiber network become a reality.”

“Ting Internet in Centennial will enable faster and more affordable Internet services for both residents and businesses,” says Mayor Pro Tem and District 4 Council Member Charles “C.J.” Whelan, just as the City’s Fiber Master Plan intended. Technology, and in particular connectivity to the Internet, has become essential to everyday life, so much so that we experience withdrawals when it is not there. Data connectivity needs to be efficient and readily available, and it is at its best when it, ‘just works’ and you don’t have to think even about it. Bringing such a high level of service to Centennial is what makes this collaboration with Ting so exciting."

Pre-orders are being accepted in Centennial starting September 21, 2016. Ting takes a gauge of demand on the ground by raising awareness of gigabit fiber Internet and then opening up to accept pre-orders. "Pre-orders determine not just whether Ting Internet comes to a town, but they also impact where network construction begins," said Adam Eisner, VP of Networks for Ting Internet.

To get to the pre-order stage, a town passes a series of checks and balances: availability of a fiber backbone, population, density, local permitting and many other factors are considered before Ting Internet formally expresses its intent to bring crazy fast fiber Internet service to a town.[243]

September 21, 2016: Why Centennial for Ting Internet?


Ting Internet has named the next Ting Internet town: Centennial, CO, population greater than 100,000. Elliot Noss, CEO of Ting parent company Tucows explains why Ting is excited to set up shop in town.

September 7, 2016: Google Fiber Wins Faster Access to Utility Poles in Nashville over AT&T’s Objections

Jon Brodkin wrote at Ars Technica on September 7, 2016 that the Nashville Metro Council has voted 32-7 to give Google Fiber faster access to utility poles, approving an ordinance opposed by AT&T and Comcast. AT&T has already said it would likely sue the city if it implements the new rule. Google Fiber is available in parts of Nashville, but expansion has been slow in part because of how long it takes to get access to utility poles. The One Touch Make Ready ordinance would let a single company—such as Google Fiber—make all of the necessary wire adjustments itself without having to wait for incumbent providers to send construction crews. Google Fiber applauded the vote last night, saying that "Improving the make-ready construction process is key to unlocking access to a faster Internet for Nashville, and this Ordinance will allow new entrants like Google Fiber to bring broadband to more Nashvillians efficiently, safely and quickly."[244]

September 7, 2016: Ting Fiber Hosts Hiring Event in Charlottesville

The Augusta Press reported on September 7, 2016 that the City of Charlottesville Downtown Job Center will host a recruitment fair September 8, 2016 to help Ting find qualified employees. The recruitment fair is being held from 10am-1pm at Carver Recreation Center located at 233 4th St NW, Charlottesville, VA 22903. The company is hiring numerous Underground Cable Technicians and Installation Technicians, as well as supervisory and management positions. Technician jobs start in the $30,000 range. Ting recruiters will be present to answer questions and offer details about the various jobs. Interviews will be conducted onsite. The hiring turnaround time is expected to be fast.[245]

September 5, 2016: Tucows Directors Sell Stock

Community Financial News reported on September 5, 2016 that Tucows Director Rawleigh Hazen Iv Ralls sold 50,000 shares of Tucows stock in a transaction dated September 6, 2016. The shares were sold at an average price of $27.46, for a total transaction of $1,373,000.00. Following the sale, the director now owns 281,575 shares of the company’s stock, valued at approximately $7,732,049.50.

Tucows Director Erez Gissin sold 10,000 shares of the stock in a transaction on Thursday, September 1, 2016. The stock was sold at an average price of $27.25, for a total value of $272,500.00. Following the sale, the director now owns 7,300 shares of the company’s stock, valued at $198,925.[246]

August 30, 2016: Installation of Fiber Infrastructure Continues in Sandpoint

The Bonner County Daily Bee reported on August 30, 2016 that Fatbeam, a company that installs fiber infrastructure in the Pacific Northwest and Rocky Mountain region, recently entered into an agreement with the Sandpoint, Bonner County and the Lake Pend Oreille School District to build a 49-mile, high-capacity fiber optic network connecting the district's 13 facilities, including 11 schools and district offices. Fiber Internet will allow every school to have a 1 gigabit connection to the district offices, which will, in turn, have a 1 gigabit Internet connection. That is more than three times faster for the district offices, Brass said, and 10 to 20 times faster for the schools. The company expects to have the "core," which includes all Sandpoint schools, installed by June or July 2017. The remainder of the schools, including Hope, Sagle and Clark Fork areas, done between fall, 2017 and spring, 2018. The city of Sandpoint has been installing fiber infrastructure under the streets of the city for several years during road construction projects. City Administrator Jennifer Stapleton expects to have the city's administration buildings, such as City Hall, "lit" by the end of September.[247]

Ting, a subsidiary of the Internet service company Tucows, recently announced Sandpoint as its next destination. Adam Eisner, director of networks at Ting, said the company is ready to bring gigabit Internet to the area. Ting has been working with the city to leverage from the infrastructure the city is providing, he added. "Our intent and hope in Sandpoint is to take advantage of that to build into the various parts of the Sandpoint area," Eisner said. Eisner said he is unsure when Ting will be in the area, but hopes to have areas of the city lit by early next year. He said Ting aims to provide service in the cities surrounding Sandpoint as well. Eisner said one thing that is unique is there is no data caps or contracts — everything is month-to-month. "What you see is what you get, which has been really popular because it's very straightforward and very transparent," Eisner said.[248]

August 19, 2016: Smaller Communities Strategize to Take Their Internet Future into Their Own Hands

The American Prospect reported on August 19, 2016 that for years, nearly 40 percent of people in rural America have been saddled with slow internet speeds and no opportunity to get broadband internet services which provide fast connections. Now local governments have been fighting back by building their own municipal broadband networks. For more than 150 communities across the country, a core benefit of building their own networks is the ability to separate the infrastructure from the private ISPs. For example, the city of Westminster, Maryland, has hired Ting, a private company, to operate its network of fiber optic cables and provide servers for internet access. If city officials decide that they no longer want to use Ting, they can look for another company to operate its network. But the city still owns the valuable infrastructure that it financed and built. (italics mine)

In June, U.S. Court of Appeals’ D.C. Circuit upheld the FCC’s 2015 net neutrality decision, but the issue of municipalities building their own networks remains unsettled and, for the moment, the Sixth Circuit ruling has put a damper on municipal efforts to bring the internet to unserved and underserved communities. “What stands behind this whole debate is whether broadband access is like a utility,” says Tim Karr, senior director of strategy for Free Press, a democracy advocacy group that was at the forefront of the fight for net neutrality. “We’re beyond that debate. Local government, state government, and the federal government all have an obligation to ensure everyone has access to open networks.”

The established ISPs have largely operated under the radar until now but as more people recognize that the industry giants’ power is not based on free-market competition, those companies have good reason to be uneasy. “It’s an exciting moment for an incredible new coalition of people—workers, people who need access to the internet, tech champions—all coming together to push out a really different vision,” says Zephyr Teachout, a Democrat running for New York’s 19th congressional district seat. “The big companies are running scared, and they should be.”

Hillary Clinton has expressed support for increasing competition and innovation as a way to reinvigorate the economy. Clinton specifically highlighted Westminster, Maryland’s community broadband initiative (operated by Ting) in her technology plan. In a 2014 tweet Donald Trump declared that “Obama’s attack on the internet is another top down power grab. Net neutrality is the Fairness Doctrine.”[249]

August 18, 2016: Tucows Enters into New Secured Credit Agreement for up to $75 million

Globalnewswire reported on August 18, 2016 that Tucows has entered into a new, syndicated five-year secured credit agreement for up to US$75 million, inclusive of a $15 million accordion facility, with Bank of Montreal and Royal Bank of Canada. The 2016 Credit Facility will be used to support share repurchases, acquisitions and capital expenditures associated with the Company's Fiber-to-the-Home program, as well as general working capital and general corporate requirements. "As planned, this new expanded credit facility provides us with additional financial resources and flexibility to support the ongoing build out of fiber infrastructure for Ting Internet," said Elliot Noss. This new facility refinanced and replaced the Company's current US$14 million credit facility with BMO.[250]




Comment on October 4, 2016: Tucows estimates that it costs about $2,500 to wire a home for fiber. According to Hugh Pickens, an investor in Tucows who follows the company closely, the $75 million line of credit would allow Ting to wire 30,000 homes.




August 15, 2016: Google’s High-Speed Web Plans Hit Snags

The Wall Street Journal reported on August 15, 2016 that Google Fiber has spent hundreds of millions dollars digging up streets and laying fiber-optic cables in a handful of cities to offer web connections roughly 30 times faster than the U.S. average but is now rethinking its high-speed internet business after initial rollouts proved more expensive and time consuming than anticipated, a stark contrast to the fanfare that greeted its launch six years ago. The company is trying to cut costs and accelerate its expansion by leasing existing fiber or asking cities or power companies to build the networks instead of building its own. “If you’re in the telecommunications industry for 150 years, there are no surprises here,” said Jonathan Reichental, chief technology officer of the city of Palo Alto, Calif. “But if you’re a software company getting into the business for the first time, this is a completely new world.”

Google Fiber last month bought Webpass Inc., a company that beams internet service from a fiber-connected antenna to another antenna mounted on an apartment building. Webpass Chief Executive Charles Barr, now an Alphabet employee, said wireless offers an opportunity to overcome the challenging economics of building fiber networks from scratch. “Everyone who has done fiber to the home has given up because it costs way too much money and takes way too much time."

Some analysts have long suspected that Google Fiber's primary goal was to prod other broadband firms to increase their speeds. AT&T, Comcast Corp. and Time Warner Cable, which recently was acquired by Charter Communications Inc., have done so in some competing markets. Google Fiber insists that fiber to the home is a real business. “We continue to see Fiber as a huge market opportunity,” Chief Financial Officer Ruth Porat told investors last month. “We’re being thoughtful and deliberate in our execution path.”[251]

August 12, 2016: Sandpoint Makes Great Strides on Fiber Internet

The Bonner County Daily Bee reported on August 12, 2016 that the city of Sandpoint has been installing a fiber optic network underground for at least five years, and City Hall should be "lit up" with the faster, more reliable Internet by the end of September. City Administrator Jennifer Stapleton said the city has been installing the infrastructure for a fiber network during road construction projects over the years, which has "significantly" lowered the cost of installation. The city has spent a total of around $250,000 installing the infrastructure for the first phase of the project, which runs from the city's water treatment plant and throughout the downtown area to City Hall. Jack Maytum, the city's consultant from Design Nine, said the city installed two conduits that are two inches in diameter, and each conduit holds 144 strands of fiber. One conduit line is dedicated to administration use by the city to connect its buildings and keep services like 911 secure. The second line will be an open access network that can be leased out to private companies to provide service to businesses and residences. "The city is not in the business of providing cable services," Maytum said. "The city is simply in the business of building the infrastructure, just like building a road."

Ting, a subsidiary of the Internet service company Tucows, recently announced Sandpoint as its next destination. Adam Eisner, director of networks at Ting, said the company is ready to bring gigabit Internet to the area. Ting has been working with the city to leverage from the infrastructure the city is providing, he added. "Our intent and hope in Sandpoint is to take advantage of that to build into the various parts of the Sandpoint area," Eisner said. Eisner said he is unsure when Ting will be in the area, but hopes to have areas of the city lit by early next year. He said Ting aims to provide service in the cities surrounding Sandpoint as well. Eisner said one thing that is unique is there is no data caps or contracts — everything is month-to-month. "What you see is what you get, which has been really popular because it's very straightforward and very transparent," Eisner said.[252]

August 8, 2016: Tucows Reports Strong Quarter for Q2 2016

Chart 1: Stock Price Chart for TCX from January 1, 2012 through August 8, 2016. In February, 2012, Tucows launched Ting, a mobile virtual network operator (MVNO). Ting's launch coincided with a rise in Tucows (TCX) stock price. Tucows' stock price has risen 871% since January 1, 2012. The S&P 500 has risen 74% over the same period. (Click on chart to expand.)
This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.
Incremental Contribution from Domain Services (Before Taxes and Other Expenses) (Click on chart to expand.)
Incremental Contribution from Ting (Before Taxes and Other Expenses) (Click on chart to expand.)
Tucows EBITDA Per Quarter (Click on chart to expand.)
Tucows Net Income Per Quarter (Click on chart to expand.)

See also:

Quarterly Revenue Increased 13% YOY

Tucows announced on August 8, 2016 that revenue for the second quarter of 2016 increased 11% from Q2 2015 to $47.5 million from $42.9 million for the second quarter of 2015.[253]

Net Income for the Year Increased 78% YOY

Tucows announced on August 8, 2016 that net income for the second quarter of 2016 increased 78% to $4.1 million or $0.39 per share from $2.3 million, or $0.21 per share, for the second quarter of 2015.[254]

Adjusted EBITDA for the Year Increased 64% YOY

Tucows announced on August 8, 2016 that adjusted EBITDA for the second quarter of 2016 increased 64% from $4.3 million in Q2 2015 to $7.1 million in Q2 2016.[255]

Tucows Has Changed the Way the Company Computes EBITDA

Michael Cooperman told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that that Tucows has amended the definition of adjusted EBITDA to adhere to the SEC compliance update. "We have again modified the definition for adjusted EBITDA this quarter. Essentially, this was in response to clarification guidance issued on May 17 of this year by the SEC in a compliance and disclosure interpretations update regarding non-GAAP measures. That guidance indicated that adjusting earnings for deferred revenue may not be consistent with disclosure rules," said Cooperman. "Following discussions with our audit committee and auditors, we concluded that we still believe adjusted EBITDA is a useful metric for our investors; however, we thought that the prudent path forward would be to amend the definition of adjusted EBITDA to adhere to the SEC compliance update. Accordingly, we are revised our definition of adjusted EBITDA to eliminate the adjustments for the effect of net deferred revenue to reflect net revenue on an earned basis. For those of you wishing to compute our adjusted EBITDA in our prior definitions, this can be done with reference to our disclosure financials and our MD&A. Adjusted EBITDA for the second quarter increased 64% to 7.1 million from 4.3 million in the corresponding periods of last year."[256]

See the *Calculation of Tucows' New Adjusted EBITDA under the SEC Compliance Update

Tucows Reiterates Adjusted EBITDA guidance of $30 million for 2016

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that Tucows is happy to reiterate our existing 2016 adjusted EBITDA guidance of $30 million.[257]

Tucows Invested $5 million to Buy Back 210,000 Shares

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that Tucows invested $5 million to purchase just under 210,000 shares in Q2. "I noted that with respect to our open market buyback program, we will be less active in some quarters and more active in others. As Mike discussed, it was a relatively active quarter in this regard as we invested $5 million to purchase just under 210,000 shares, we continue to be able to comfortably balance CapEx spend, stock repurchases and probably most importantly solid growth and profitability. All-in-all, Q2 was a good quarter for both the present and in the future. "[258]

August 8, 2016: Ting Mobile Growth Slows with 4,000 Net Adds in Q2

Ting Mobile Had Net Adds of 4,000 Accounts and 6,000 Devices in Q2 2016

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that Ting Mobile added 4,000 accounts and 6,000 devices in Q2 to bring Ting's total to 144,000 accounts and 227,000 devices[259]

Ting Mobile previously added 12,000 net adds in Q1 2016. However this figure included a one time influx of 7,000 new customers from Ptel when they went out of business. According to Tucows, net adds have been going down over the past year dropping from 10,000 net adds a year ago in Q2 2015 to 4,000 this quarter. According to calculations by Hugh Pickens, a long term investor in Tucows who follows the company closely, gross adds have dropped from 18,475 to 14,368 over the same period.

2015: Q2 2015: Q3 2015: Q4 2016: Q1 2016: Q2
Total Customers 113,000 122,000 128,000 140,000 144,000
Net Adds this Quarter 10,000 9,000 6,000 5,000 w/o Ptel
12,000 with Ptel
4,000
Quarterly Churn Rate 7.50% 7.50% 8.20% 7.17% 7.20%
Churned Customers 8,475 9,150 10,496 10,038 10,368
Gross Adds 18,475 18,150 16,496 15,038 w/o Ptel
22,038 with Ptel
14,368

Note: Q1 2016 Gross adds and Net adds includes a one time influx of 7,000 new customers from Ptel when Ptel went out of business.

Ting Mobile's Churn Rate Stayed at about 2.4%

Number of Ting Mobile Customers Note: Ting started in February 2012. Prior to the earnings report for 2013:Q4 Tucows did not break out the number of customers or devices so the number of customers in Q1 through Q3 for 2013 is estimated. (Click on chart to expand.)
Gross Additional Customers Per Quarter (Click on chart to expand.) Note: In Q1 2016 Ting Mobile had a one-time influx of 7,000 customers, migrating from PlatinumTel Wireless, also known as PTel, that closed its doors.
Chart 6: Churned Customers Per Quarter (Click on chart to expand.)
Net Additional Customers Per Quarter (Click on chart to expand.) Note: In Q1 2016 Ting Mobile had a one-time influx of 7,000 customers, migrating from PlatinumTel Wireless, also known as PTel, that closed its doors.

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that churn was 2.4% in Q2 2016 in line with 2.39% in Q1 2016.

In answer to a question from Hubert Mak, Noss said that he didn't expect net adds to get worse. "So I think that the way we’re thinking about it is, we certainly don’t think it's going to get worse. We hope that few of the pieces that we’re focusing on are going to get better. So, there is all of the little things, we’ve talked about some of those and with each of those, whether it's retail or some of the tactical programs. We’re seeing a little bit more and a little bit more from them. The two big things hopefully the two that we think might have kind of real kicked to them are the price drop and some of the targeting of new segments that we’re looking at. We’re talking more probably on the next quarter’s call about some of our specific plan there. On this call just to repeat in case you missed that as well, we’re going to start taking some marketing dollars and throwing them at slightly different segment, little bit less tax savvy, a little bit lower income and frankly a little bit older. We think that there is some opportunity is there. And that’s something that we’re hoping that we can get some real contributions from."[260]

Ting's Acquisition Costs Remain at About $100 per Customer But Could Go Higher If Ting Finds Things That Work at That Level

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that Ting continues to acquire new customers for less than a $100.[261]

In answer to a question from Hubert Mak, Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that he is comfortable taking that $100 number up to $110, $120, even $150 if Ting Mobile finds things that work at those levels. "I think that in the plan that we have that are sitting right in front of us right now, we think that will be generally within the same parameters that we’ve had to-date. I think that if we see a breakout over that top range, will be very -- will tell you all about it and we’ll give you detail. I have said in the past that few times, you know, boy, I am comfortable taking that some $100 number up to $110, $120, even $150. There is nothing that’s kind of sitting on the table right now that I think will start to quite get that high, but boy if we were finding things that work at those levels, I think we push on them. And so, we’ll give you as much visibility as we can as soon as we can."[262]

Ting Had a Defection of 1,000 New Customers from the One-Time Influx Migrating from Ptel

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that about 1000 of the former Platinumtel Wireless customers that came over to Ting from Ptel in Q1 defected once they had used the free service credits Ting gave them. "That is almost inevitable with any migration of that nature, and we are still quite happy with the bump we got there for the price, but it does mean that the 12,000 net ads we reported in Q1 were inflated as we noted and the 3,000 net ads were reporting for Q2 are of course deflated. "[263]

Ting Reduced Their Data Pricing for Higher Data Users by 33%

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that Ting has made a significant reduction in data pricing for higher data users and now charge $10 per gigabyte for usage beyond 1 gigabyte, a 33% reduction from $15.

With this price drop, we are no longer just the smart choice for low data users. We offer an even more overwhelming majority of Americans substantial potential saving on their monthly cell phone bills and with our approvals usage, and low monthly line fee, we’re pretty much in numerator for families, small businesses or any account with multiple devices. I am also very proud of how we implemented our price changes of thing unlike typical industry promotions and plans intended to attract new customers, without sacrificing revenue on existing customers, we simply drop prices for everyone. Ting customers do not need to take any action to see their data prices drop next billing cycle. We did this back in 2014 and found that the appreciation and word of mouth we got from our existing customers was the best possible marketing our money could buy. As I said, we announced the new pricing late last week, but I am hopeful that both the buzz and those more favorable savings calculations will give us a lift in customers in the second half of Q3. We were able to lower our supply cost which is what allowed us to make this move.[264]

Gross Margins for Ting Mobile are in the 45% to 50% Range

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that the cost reductions in data usage keep Ting Mobile very comfortably within Ting's 45% to 50% gross margin target. "As most of you know, we were out the top-end of our guidance range in gross margin."[265]

Marketing Expenses and Network Access Expenses Have Increased for Ting Mobile

Michael Cooperman told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that marketing expenses increased by 450,000 when compared to the second quarter of last year primarily to support and acquire Ting Mobile and Ting Internet customers. "And second, professional fees credit card processing fees, stock based compensation and travel increased by 0.5 million primarily to support the growth of Ting network access services. Third, workforce related expenses increased by 450,000 primarily to support the growth of network access services. "[266]

Ting is Starting to See its Biggest Opportunities Among Populations that are Less Technical, Less Affluent and Politely Less Young

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that Ting is starting to see itsbiggest opportunities among populations that are "less technical, less affluent and politely less young. We recognized that the people who would benefit the most from our rate plan and the handholding we provide in customer support are likely not on the niche blogs and forum where we have enjoyed the most exposure. And the good news there is that this is also the customer group that has a greatest depreciation for value, not the least reason being because they are also the ones most often paying the phone bill."[267]

Ting Is Starting to Explore More Traditional Marketing Channels

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that Ting is starting to explore some more traditional channels. "I will reveal more on that as some of these experience materialize and this will not be with Super Bowl ads or other spend that will drive customer acquisition through the roof. We continue to grow our existing distribution partners, Kroger, Staples, Amazon and pound the favorite looking for more. We continue to experiment with affiliate partnerships and in fact have seen some encouraging scalable results with employer benefit program."[268]

Ting Continues to Optimize Purchase Staff on the Website with AB Testing and Improved Conversion

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that Ting continues to optimize its purchase staff on the website with AB testing and its sales team on the phones to improve conversion in events of growing awareness and consideration.[269]

Ting Is Partnering with Makers of Standalone Smart Devices

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that Ting is discovering some interesting partnership opportunities with makers of standalone smart devices.

These are often being marketed and distributed internationally with an empty SIM card slot, so that end users in each country can choose their own service provider. These manufactures like Ting because our rate plan is perfect for the sort of tactical usage they see on their devices and because our customer support will enhance their customer experience. We love the source of new customers that could eventually bring their primary smartphones as well. The first of these partnerships is with brands called [TVtel]. A successful kick-start adventure that produces a simple, wearable device designed for young children. They shipped a small initial batch to U.S. customers in Q2 and will be shipping more in Q3. A Ting SIM card with instructions activate will be included in every box. As we cautioned last quarter, our renewed sales and marketing efforts will take time, but we’re excited about the price drop and the opportunities to expand our awareness in our customer base, and we look forward to seeing the numbers grow in the quarter’s ahead.[270]

August 8, 2016: Ting Internet Had a Very Positive Quarter

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that Q2 was a very positive quarter for Ting Internet.[271]

Virtually all Residents of Charlottesville Will be Able to Order Ting Fiber by the End of the Year

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that in Charlottesville, Ting saw demand for our service jump to a new level and and just as importantly our capacities have fulfilled that demand. In answer to a question from Patrick Retzer, Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that the vast majority or virtually all residents of Charlottesville will be able to order Ting fiber by the end of the year.[272]

Our advertising partnerships and events have given us brand awareness. We are getting better and better at every step of the process from building out the network to taking orders and scheduling installs, to performing those installs more efficiently to permitting. And we continue to see the same sort of customer satisfaction and advocacy with Ting Internet to propel the business on Ting Mobile. We also activated our first large bulk deal multi-dwelling unit or MDU in Q2. A 234 unit apartment complex called Jefferson Ridge Apartment Homes. Residents of these apartments now have 10 gigabyte internet service included in their monthly rent and residences in other large residential buildings in Charlottesville are starting to pressure the landlords to offer the same. In Westminster, where the city is building the fiber network and we currently have less than 300 serviceable addresses, the next phase of construction has been delayed a bit because of fiber shortages. That phase is just beginning now and should give us over 2,700 serviceable homes and businesses by 2017.[273]

Ting Internet Expects to Have Homes in the neighborhood of Holly Glen in Holly Springs Connected by the end of 2016

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that Ting Internet expects to have homes in the Holly Glen neighborhood in the city of Holly Springs connected by the end of 2016. "Holly Glen earned that position by having the most pre-orders and we will continue to use pre-orders to demonstrate demand."[274] Note: Holly Glen is the first neighborhood in the city of Holly Springs where Ting will begin installing fiber.

In answer to a question from Patrick Retzer, Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that Ting Internet will be through the first two or three neighborhood rolls outs this year. "We’re going to be through the first two or three depending on how to build rolls out neighborhood this year. And I’m quite happy with that given that it’s all underground and given that, this is kind of the first planned community we’re just breaking ground there and certainly in our planning and our internal models where we're everywhere or where most neighborhood that we’re going to build out to by the end of next year."[275]

Ting Internet Expects to Be Taking the Next Steps in Sandpoint Soon

In answer to a question from Patrick Retzer, Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that Ting Internet is getting pretty close to taking the next steps in Sandpoint. "They had a process, it’s probably four or five years in the making at this point. So these things really- really do ripe in both unevenly and over long period of time. And all that being said, Pat, I feel good about I won’t be surprised if in '17 I’m starting to make some capital trade off. I can't tell you, if that's a summer or the end of ’17, but I feel like there is lots of going."[276]

Ting Continues to See Cost Per Wired Home at about $2,500 to $3,000

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that Ting Internet continues to see the cost per wired home at about $2,500 but this will vary from town-to-town and may be closer to $3,000 in some markets.

As we begin construction at Holly Springs, it is worth reiterating that the $2,500 per customer number that we have outlined will vary from town-to-town based on the nature of the build. In Holly Springs for example, we will be extending the fiber primarily underground rather than across poles and the lot sizes are bigger than in most markets. There are also very few MDUs at Holly Springs. MDUs of course tend to bring down the average cost per customer with their density. We decided to blend the $2,500 spend per customer at our desired adoption rates of 20% in the first year and 50% in five years. In Holly Springs, we’re projecting closer to $3,000, again with an average of $1,000 in margin on Ting Internet and very-very low churn, we are still perfectly happy with the cash-on-cash returns there.[277]

Ting Internet is Learning More About Capital Flows in Terms of Timing and Amount

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that Ting Internet islearning much more about how capital flows through this project in terms of timing and amount. "This gives us more visibility into our CapEx spend through the end of 2016 and help teach us how to best plan for 2017 and beyond. We now expect CapEx to come in between $10 million and $15 million in 2016. For the future, the most important tactical work we are doing is improving growth as at Ting Mobile. We’re starting to see some slivers of improvement, learning would have not working with others and most importantly started to get a better sense of where the push harder long-term in order to create greater awareness."[278]

Ting Internet is Learning How to Scale and Effectively Deliver Installs

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that Ting Internet is learning how to scale and effectively deliver installs. "At Ting Internet, we are learning everyday and applying that learning with each new neighborhood build and every new channel we engage with," said Noss. "We are learning how to market hyper locally. We showed strong growth in gross margin as mobile growth. We showed strong growth in operating margins due to the scalability of our model, and we’re doing the right work to position us well to deliver continued growth for both the short-and long-terms."[279]

Ting Was Prepared for the Nationwide Shortage of Fiber Optic Cable

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that there has been a shortage in the U.S. of supplier fiber optic cable. "I am pleased that we protected ourselves ahead of this shortage by securing and storing large amounts of fiber for our project by dealing with suppliers globally. "[280]

In answer to a question from Hubert Mak, Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that the time frame is absolutely still intact. "I mean the numbers we’re talking about at this stage of the ramp are small relative to the total picture. I think probably if anything just with what I am seeing, I think, I mean, it'd have to really sort of move some levers around in my head. But we’re quite comfortable where we were with those numbers because what we’re seeing is interest that’s in line or more with what we expected. And by that, I mean from towns and how quickly we’ll be able to build out, how quickly we’ll be able to get things online."[281]

Ting Internet's Pipeline of New Cities is Full and Ting Expects to Be Sharing New Locations by the End of the Year

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that Ting Internet's pipeline of new cities is full and Ting expects to be sharing additional locations before the end of the year. In answer to a question from Patrick Retzer, Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that Ting expects to be making announcements later this year that will represent a nice bucket of serviceable addresses.

I think that as I am going to and you know something I debated kind of putting into the script this quarter, the most important economic unit in the fiber business is serviceable addresses, not cities. And so the bigger the city, the more addresses there are. There is something that’s a couple of times the size of Charlottesville have 10 standpoints. And so I've thinking about and then you kind of go through the sales cycle at a city level. So I have been thinking about how to communicate that well. I think that between now and at the end of the year, we’re going to be making announcements that will represent a nice bucket of serviceable addresses. So let me just say that for now.[282]

Ting Internet Has Submitted a Proposal for Boulder, Colorado

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that there is a publicly available broadband feasibility study document for the City of Boulder, Colorado and Ting is on record as having submitted a proposal. "Examining Boulder gives a sense of just how long and complicated the road to fiber can be for these towns. Boulder has great fiber assets and has gotten great work from industry consultants, but still has many options to analyze and consider including choices along the spectrum from public to private. Towns that publicly fund their fiber network like Westminster are making an investment that the town will benefit from 10, 20 and even a 100 years from now. I have endorsed that approach many times in the past but it isn't more difficult road. Understandably, towns that choose to invite private companies like us to build an operator network will have fiber a lot sooner and as long they are chosen partner in the company like Ting, their customers will receive excellent treatment and fair pricing."[283]

In answer to a question from Patrick Retzer, Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that nothing is going to happen in Boulder in a hurry.

I would say that this is certainly like a duck paddling. There is a lot more going on under the surface than you see on the surface. I should note that Boulder which you’re seeing a lot publicly about or you and others can see a lot of sort of public facing information about is probably not super high on our list. We love that market but what came out of that city council meeting were the council half wanted to go private, half were really considering public private partnership, and I think they should make the right decision, not the fast decision. And so nothing is going to happen in Boulder in a hurry. So I think it’s a great example, you see a lot in Boulder but that’s not near the top of the list. And I think the other thing about that part is these processes, the thing that I most want people to take away from that Boulder thing is, imagine if there is -- if what happen in Boulder, happen the week after the call, not sort of a month or so before the call. And we might have been talking but you might have been rightly talking about, hey, publicly you’re one of the three finalists who are in RFI in 100,000 population town. Tell me about that and then a week later, it’s kind of well deferred. Some of these cities have had processes that I’ve been going on for years.[284]

Ting Internet Is Seeing Requests for Information Coming in Every Month

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that Ting Internet is seeing more requests for information and proposals coming in from towns every month. "One thing that is clear is the upgrading internet infrastructure and providing faster internet speed is getting increasing attention throughout the United States," said Noss. "Candidates for public office highlighted in their tech platforms as Hillary Clinton did recently naming Westminster Maryland as an example of the new model of the public private partnerships."[285]

Ting Internet is Starting to See Other Fiber Players Become More Active

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that Ting Internet is starting to see other fiber players become more active. "People asked me whether I am concerned about increasing competition. There were 20,000 cities and towns in the U.S., Ting Internet needs only a tiny fraction of them to have a booming business.[286]

August 8, 2016: Domain Services Had Another Quarter of Solid Performance

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that Tucows' Domain Services saw another quarter of solid performance which was punctuated by the acquisition of the international wholesale reseller channel of Melbourne IT on April 1st.[287]

Tucows' Wholesale Channel Has Almost 15 million Domains Under Management

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that the acquisition of the reseller base outside of MIT’s domestic market of Australia, New Zealand added hundreds of resellers and approximately 1.6 million domains under management bringingthe total number of domains under management in Tucows' wholesale channel to just shy of 15 million mark. "The migration of the acquired MIT resellers and domains is for the most part now complete and I’m pleased to report that the feedback from our new customers has generally been positive."[288]

Wholesaler Growth Increased 14% YOY

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that Tucows' expanded reseller channel contributed to a healthy 14% year-over-year growth in total wholesale registrations during the quarter with both new registration and renewal growth in line with that our overall number.[289]

The Number of Launches of new gTLDs Has Slowed to a Trickle

Elliot Noss told analysts during the 2016 second quarter earnings conference call on August 8, 2016 that in terms of new gTLDs, the number of launches has slowed to a trickle. "The story here is now more of the quality than quantity. In this regard, we're anticipating new gTLDs for us. '.blog', will go live during Q4. So the exciting new gTLDs that we think has tremendous potential. In addition, '.web' has now been resolved with Verisign, so we'll wait to hear what's the plans are for this gTLD. The number of resellers who have registered to this one new gTLD grew to more than 2,650, up about 5% from the end of Q1 this year, and 27% from the end of Q1 last year."[290]

August 5, 2016: Ting Drops Data Prices 33%

Andrew Moore-Crispin reported on the Ting Blog that Ting has dropped data prices from $15 to $10 per gigabyte beyond the 1 GB Medium level, a price reduction of about 33%. "We have wholesale relationships with our carrier partners and we’re always looking to get the best deal we can for our customers," writes Moore-Crispin. "We have been working with said carrier partners to negotiate better data rates for some time. We were successful and as was always the plan, we’re passing those savings on to our customers, new and old, immediately."[291][292]

"This remains a genuine price drop," said Bertel King, Jr. at Android Police. "There's no trickery going on to get consumers spending more. Ting customers who use the same amount of data this month as last month will see a smaller bill. Nice." King noted that Ting's last previous price reduction in data was in February, 2014.[293] Debarshi Nayak writes at Android Headlines that Ting's data price is now the same as what Google's Project Fi charges per GB of data. "But Project Fi, owned and operated by Google, has a significant disadvantage. It can only be used on Nexus devices, where Ting supports any unlocked phone," writes Nayak. "The other advantage Ting has over its competitors is the highly customizable family plans, which lets the user have granular control over sharing amount of data, messages and minutes among multiple connections. The lower prices position Ting as a formidable competitor to other competitors in the MVNO market."[294]

July 8, 2016: What Has Ting Learned from a Year of Internet Support?

Ross Rader, VP of Ting Customer Experience, has a video on the Ting Blog where he talks about the differences between providing support on Ting Mobile and Ting Internet and what Ting has learned supporting internet for the past year. According to Rader, one of the primary differences between the two support processes is that Ting Internet owns its network allowing Ting to have complete visibility with everything that is going on in the fiber network. "We don't have that visibility with Ting Mobile because at a certain point we have to ask our partners (Sprint and T-Mobile) what is going on with that tower, or is there construction going on in that area," says Rader. "With the internet we know what is going on with construction in that area and what is going on with the equipment in the house."

Rader says that there is also a lot more information available for support personnel on Ting Internet so Ting Support can build a support process that is a lot more comprehensive and a lot more thorough that allows Ting to hand off much later to a third party than with mobile. "The quality of support we can provide with internet exceeds the potential quality we can provide with mobile and that is really exciting. I don't think we are there yet. We have a lot of work to do and a lot ahead of us but it is an exciting path and one I am looking forward to.[295]

July 7, 2016: What has Customer Service Learned from a Year of Ting Internet Support?


Ross Rader, VP of Ting Customer Experience, explains the differences between supporting Ting mobile and our new Ting Internet service.

July 4, 2016: Why Tech Support Is Unbearable at Most Companies and Why Ting is the Exception

Getting caught in a tech support loop — waiting on hold, interacting with automated systems, talking to people reading from unhelpful scripts and then finding yourself on hold yet again — is a peculiar kind of aggravation that mental health experts say can provoke rage in even the most mild-mannered person. Kate Murphy wrote at the New York Times on July 4, 2016 in an article titled "Why Tech Support Is (Purposely) Unbearable' that just as you suspected, most companies are aware of the torture they are putting you through as 92 percent of customer service managers say their agents could be more effective and 74 percent say their company procedures prevented agents from providing satisfactory experiences. “Don’t think companies haven’t studied how far they can take things in providing the minimal level of service,” says Justin Robbins, who was once a tech support agent himself and now oversees research and editorial at ICMI. “Some organizations have even monetized it by intentionally engineering it so you have to wait an hour at least to speak to someone in support, and while you are on hold, you’re hearing messages like, ‘If you’d like premium support, call this number and for a fee, we will get to you immediately.’”

Hugh Pickens comments: In Consumer Reports annual cell-phone service comparison for the past two years running Ting has come out on top as the best mobile wireless provider with a company rating of 91 out of 100 because of their excellent service and customer support. So why is Ting the exception to the rule on customer support? "I think it is because at most companies, customer support is an afterthought - something the company has to say that they provide in order to sell their cable modems or battery chargers," says Hugh Pickens, a long term investor who closely follows Ting and Tucows. "I think most companies know that their sales are 'one of' and poor customer support is not going to have much of an effect on repeat sales and their bottom line." Ting, on the other hand, sells a monthly service and if customer support is unsatisfactory, it is very easy for consumers to change to a different MVNO says Pickens. "Ting realized early on that customer support was the key differentiator between them and other MVNOs. Ting's business model will only work if they make excellent customer support into a core competency."[296]

June 28, 2016: Clinton Campaign Praises Ting's Westminster Broadband Project

The Carroll County Times reported on June 28, 2016 that as a part of Hillary Clinton's tech policy, she points to Huntsville, Ala., and Westminster, Md., as positive examples of communities implementing broadband and attracting businesses. That's an endorsement that Jason Stambaugh, a marketing consultant for the City of Westminster, said everyone can take some bipartisan pride in. "Providing ultra-fast broadband and high-speed internet to folks is a huge economic development driver in this country. I don't care who the presidential candidate is, it's something they are all going to care about," Stambaugh said. "We're happy to be out in front of the pack on that and very delighted that presidential candidate Clinton gave us some props in the media."

Stambaugh was in attendance recently at an open house at Ting, the internet service provider company that has partnered with the city to operate the fiber network as it grows — with a small pilot phase now complete, about 2,700 homes and businesses along the western side of the city and along Md. 31 will be connected with fiber over the course of the next 12 months. "The city decided that we are not in the business of being an internet service provider, that's not what we do well; we do infrastructure really, really well," he said. "That's where the Ting partnership has been so crucial, they are the ones that are operating the network and ultimately selling services to our business owners and our residents."

The project of wiring up the whole city will take three to four years if all goes well, according to City Councilman Robert Wack, who spearheaded the infrastructure plan. As far as each resident or property owner is concerned, he said, the project comes in two parts — running the fiber to each address, for which the owner must grant access, and connecting the fiber into the house to begin service, which is done by Ting once a service is purchased. "An important thing to keep in mind for the city's residents is that the installation of the fiber is free — it's only if they choose to take the service from Ting that they would actually have to pay something," Wack said. "The more people we get to sign up for the fiber installation, the cheaper we can get it done because we can get some volume discounts from the construction company."[297][298]

June 26, 2016: Westminster Demonstrates Speed of Ting's Fiber Network

The Carroll County Times reported on June 26, 2016 that among telecommunications circles, "the Westminster model" is being used to describe the city's innovative public-private partnership for a citywide fiber network. Jeff Cornejo, product manager for Tucows Inc., which owns Ting, was at a demonstration on June 24, 2016 as officials and businesses gathered to see the network's speed demonstrated at a launch party at Intellitech Inc. Cornejo demonstrated common tasks using the gigabit service, including downloading a 5-gigabyte operating system update — which took less than 2 minutes — and a 2-gigabyte data backup — which took less than one minute. A high-definition movie is usually about 4 gigabytes and can take up to an hour to download using a standard download speed, according to Cornejo.

"This is an exciting day for the City of Westminster," said Mayor Kevin Utz adding that he hopes the eventual citywide network will entice businesses and residents alike to move to Westminster. "We would like some of those government jobs to come to Westminster."[299]

June 15, 2016: Why are You so Invested in Bringing Fiber into Westminster?


City Council President, Dr. Wack, has been instrumental in bringing Fiber Internet to Westminster. His hope, as he explains in this video, is that this new technology will bring new jobs and opportunities to the community.

June 14, 2016: Gigabit Fiber Has Helped Revive Chattanooga

The Tennessean reported on June 14, 2016 that Chattanooga Mayor Andy Berke points to the city’s fiber network as a significant source of its new vibrancy. “It changed our conceptions of who we are and what is possible,” Berke said. “Before we had never thought of ourselves as a technology city." In the past three years, the city’s unemployment rate has dropped to 4.1 percent from 7.8 percent and the wage rate has also been climbing. Volkswagen’s presence has boosted the manufacturing sector and 10-gigabit speed internet has fueled wage growth. “We know that the wage rise is linked to internet jobs and particularly the technology sector,” Berke said. A pioneer in municipal broadband, Chattanooga developed its fiber network in 2010 with $330 million, paid for with $105 million in federal funds and the rest from bonds. The high-speed access led to direct and indirect economic gains and has been profitable. “Our fiber goes to each and every home,” Berke said. “We can’t have digital gated communities. If we do that we and only allow fiber to go to some parts of the city, some parts of the state, we will see technology widen the gulf between people as opposed to bridging it."[300]

June 1, 2016: Fiber Network Construction in Holly Springs to Begin in August

Fiber Network Construction in Holly Springs to Begin in August. Ting will begin installing fiber in Holly Springs in August. The initial roll-out plans include Holly Glen, Holly Pointe, Autumn Park and Morgan Park. Phase 2 of the fiber network roll-out will begin in October in Windcrest and Oak Hall. Phase 3 will being in November with 12 Oaks, Arbor Commons, and Arbor Creek. (Click on graphic to expand.)

The Ting Blog reported on June 1, 2016 that Holly Glen will be the first Holly Springs neighborhood where Ting will begin installing fiber in August. The initial roll-out plans include Holly Glen, Holly Pointe, Autumn Park and Morgan Park. Phase 2 of the fiber network roll-out will begin in October in Windcrest and Oak Hall. Phase 3 will being in November with 12 Oaks, Arbor Commons, and Arbor Creek.[301]

“Internet speed and infrastructure is an issue that is on the national agenda,” says Elliot Noss. “While it’s obviously very important to get major metros connected with fast fiber Internet, Ting Internet is proving that the fastest Internet access available isn’t just for city centers. Smaller cities and towns need faster, more reliable Internet too. Maybe even more so.”

“We go where we’re needed and wanted most,” says Adam Eisner, VP of Networks, Ting Internet. “We use pre-orders to determine where the strongest desire lies. Holly Glen reached that tipping point quickly and we’re eager to get started. By the end of 2016, we plan to have the first homes in Holly Glen connected with Ting crazy fast fiber Internet.”

“Ting has demonstrated its commitment to Holly Springs, and that’s exactly what we look for when working with the private sector,” says Holly Springs Mayor Dick Sears. “The citizens of Holly Springs deserve the best Internet access to allow them to telecommute, to inspire kids with the possibilities technology brings and to keep Holly Springs growing at the impressive pace we’ve been driving for the past several decades.”

Ting Internet start up costs in Holly Springs vary by location but are not more than $200 for residential or $400 for an individual business. The Ting Internet Box, which doubles as a high-speed wireless router, is required equipment and costs $199 to purchase outright and can be rented for $9 per month. Symmetrical gigabit Internet costs $89 a month for a home, $139 for a business.[302]

May 27, 2016: First Ting Makerspace Goes Live in Westminster

The Ting Blog reported on May 27, 2016 that the first Ting makerspace is live in Westminster, MD. The makerspace includes tech tools like a 3D printer, CNC router, Arduino boards — "everything one might need to experiment with a computer or electronics project, including crazy fast fiber Internet." Ting plans to bring a makerspace to every Ting Internet town that doesn’t already have one.[303]

May 20, 2016: Maryland Senator Ben Cardin Visits Ting Internet in Westminster

Maryland Senator Ben Cardin Visits Ting Internet in Westminster.

Maryland Senator Ben Cardin visited Westminster, MD on May 20, 2016 and praised Ting Fiber in a tweet: "A great town deserves great internet. At @tingFTW in #Westminster learning the impact of being #gigabit city"[304]

May 25, 2016: Elliot Noss Talks About How a Town Can Make Itself More Attractive to Ting Fiber

Elliot Noss has a new video up the Ting Blog on May 25, 2016 that talks about how cities or towns can become attractive to Ting or Google Fiber or any other fiber partner. First go read the documentation that is out there says Noss. "Google provides great documentation on what it takes to become a Google town. We provide documentation. The things that cities or towns should do are not complicated. For starters, towns need to know their municipal assets and access policies. Towns should also be coming to the discussion with the sense that crazy fast fiber Internet is a thing they need in order to keep pace; Ting doesn’t want to spend a lot of time convincing people that symmetrical gigabit Internet is important infrastructure."

Noss says that the thing that isn't talked about is that cities and towns need to bring themselves to the exercise as ready for it. "We don't want to spend any time convincing a city or town that they need gigabit fiber. Really there are already so many hundreds and hundreds of towns that have recognized and decided that that was important infrastructure for them to remain competitive that we are sorting through those that have already gotten over the hurdle of why should I do this?"[305]

May 18, 2016: Elliot Noss Talks About Barriers to Competitors in Ting Towns

Elliot Noss has a new video up on the Ting Blog on May 18, 2016 where he talks about barriers to competition in Ting Fiber and why he's not worried about another company coming in and competing in a Ting Town. Noss says that in terms of competition in the fiber arena there are three things to consider.

  • The first person to build fiber is the last person to build fiber. It doesn't make much sense to overbuild fiber.
  • It is early days in the fiber market. "The only people who are doing what we are doing today is Google Fiber and we continually are asking each other: Where is everybody else? We think that there will be tens and hopefully hundreds of companies in the future bringing fiber across America."
  • There are 20,000 cities and towns across the United States so there is plenty of meat on the bone for everybody. This is not a land rush where we need to be grabbing at all. The building of end-to-end fiber is going to take place over 15 to 20 years and has lot of room for hundreds of different competitors.[306]

May 17, 2016: Ting Internet Rolls Out Plans for Winchester Fiber

Rollout of Winchester, MD Fiber Network.

The Ting Blog reported on May 17, 2016 that the physical construction of the fiber network in Westminster is already underway and Ting Internet is providing a road map for the roll-out of fiber throughout the city. Phase 1, to be completed in 2016 will include Bolton Hill, Cliveden Reach, Village of Meadow Creek, and Whispering Meadows. The City of Westminster has been accepting bids for construction of Phase 1 and the most recent information is that they plan to break ground for the network backbone around the middle of June. Fiber drops (for which you need to sign an “access agreement…” that’s important) will follow shortly thereafter. All signs currently point to installing fiber in the first the homes in Phase 1 in Q4 of this year. "If you think you may want fiber Internet. Even if you’re on the fence. It behooves you to sign the City of Westminster’s fiber access agreement. Not to put too fine a point on it but if the team installing fiber drops passes you by and you decide later that you might want fiber, you’re going be waiting for quite some time. A signed access agreement lets the City install a fiber drop on your property. It costs nothing and it in no way obligates you to get service from Ting."

Phase 2 of the network build will begin as Phase 1 nears completion but timeframes are much harder to pin down. Phase 2 will include the following areas: The Greens, Stoneridge Overlook, Eagle View Estates, Furnace Hills, Fernby Farm, Avondale Run, and Wakefield Valley.[307]

May 13, 2016: Ting Wants to Help Cities and Their Citizens Plug Directly into the Internet Backbone

Gizmodo reported on May 13, 2016 that some cities and private companies are working together to offer customers a choice for better, cheaper internet service that doesn’t come from a company called Comcast. Ting installs fiber and the equipment needed to handle gigabit connections directly in people’s homes. In essence, Ting wants to help cities and their citizens plug right into the internet backbone, skipping over the slow coaxial cable that still powers the last mile in many of the big telecom networks. For now, Ting’s footprint is pretty small. The startup ISP is starting in Charlottesville, Virginia and Westminster, Maryland, about an hour north of Baltimore. Ting is partnering with cities as well as larger networks in order to bring fiber speeds directly to homes and businesses. The key for success here is the ability to streamline the challenge of building out the fiber optic network in a given city.

“You tend to be able to build much easier much faster if the city is positive about what you’re doing and helpful,” said Elliot Noss, the chief executive of Tucows. “Once the network is built inside of the city and once it’s connected to the back bone the rest is about hooking up homes and lighting them up.” Ting did just that on June 26, when it turned on the fiber optic network in Westminster. The city will now enjoy gigabit speeds and more choice when it comes to picking a provider. Westminster Mayor Kevin Utz boasted about how the new fiber network would attract new businesses and residents. “For too long, people and businesses have had no choice, or at best the illusion of choice, as to who provides them with access,” said Noss.[308]

May 9, 2016: Tucows Reports Strong Quarter for Q1 2016, Beats Earnings Estimate

Chart 1: Stock Price Chart for TCX from January 1, 2012 through May 9, 2016. In February, 2012, Tucows launched Ting, a mobile virtual network operator (MVNO). Ting's launch coincided with a rise in Tucows (TCX) stock price. Tucows' stock price has risen 684% since January 1, 2012. The S&P 500 has risen 63% over the same period. (Click on chart to expand.)
This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.
Incremental Contribution from Domain Services (Before Taxes and Other Expenses) (Click on chart to expand.)
Incremental Contribution from Ting (Before Taxes and Other Expenses) (Click on chart to expand.)
Tucows EBITDA Per Quarter (Click on chart to expand.)
Tucows Net Income Per Quarter (Click on chart to expand.)

See also:

Quarterly Revenue Increased 13% YOY

Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that revenue increased 13% from Q1 of last year to a record $45.6 million.[309]

Net Income for the Year Increased 57% YOY

Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that net income for the first quarter of 2016 increased 57% to a record $4.4 million or $0.42 per share from $2.8 million or $0.25 per share from Q1 of 2015. [310]

Adjusted EBITDA for the Year Increased 10% YOY

Tucows announced on February 9, 2016 that adjusted EBITDA for the year came in at $7.486 representing year-over-year growth of 10% YOY.[311]

Tucows Reiterates Guidance of $30 million Adjusted EBITDA for 2016

Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that with a solid start to 2016, we are comfortable reiterating our previous guidance for the year of $30 million in adjusted EBITDA. "Just again, I don't want to be back every quarter readjusting that number or working with precision. And I think, I'd probably think a little bit more about that, if we were trading at a higher multiple as well. So I am not feeling too bad about the $30 million number at this price."[312]

Tucows Had an Increase of $2.3 Million in Cash Flow from Operating Activities

Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that cash and cash equivalents at the end of the first quarter of 2016 was $10 million compared to $7.7 million at the end of 2015 and $13.7 million at the end of Q1 a year ago. "The increase relative to the end of 2015 is primarily the result of our generating $5.6 million in cash flow from operations, and the advancement of $6 million under our credit facility that was used to fund the acquisition of the international wholesale domain reseller channel of Melbourne IT that Elliot discussed earlier."[313]

Tucows Invested $0.9 million, Primarily in Ting Fiber

Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that Tucows invested $0.9 million in property and equipment, mainly in continuing to build out the footprint for Ting Internet.[314]

Tucows Repurchased 231,000 Shares in Q4 for $5.4 million

Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that Tucows used $2.2 million to repurchase just over 98,000 shares under our open market share buyback program. Noss added that "we bought back a little stock during the quarter. This is not reflective of any change in our philosophy around returning capital to shareholders. We've always said that repurchases would vary from quarter-to-quarter. The more the stock falls in a given quarter, the more we are likely to buy, and more the stock rises in a given quarter, the less we are likely to buy. This is simply a matter of moment and process. The Board setting a price subsequent to the meeting that takes place just before the calls. The stock right now is up over 25% from the time of the last earnings call. And all things being equal that is likely to be a quarter in which we buy less than another."

"It's always being opportunistic. And to put a final point on it, we'll decide what we're going to do for quarter typically in our Board meeting, which will take place typically the day of the call, the day before the call. If you go back to the last call, stock was in the 18's at that point, so we're going start price on that basis. I think you as a smart trader will appreciate as much as anyone. You don't want us kind of being super aggressive off that price. And the stock traded up pretty quickly, and so that's really going to be an impact there, but tactically we go through that exercise on a regular basis."[315]

Tucows Incurred a Small Gain on Canadian Currency Exchange

Michael Cooperman told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that during the first quarter of this year, Tucows incurred a gain on foreign exchange, primary related to revaluation of our foreign denominated assets and liabilities of $79,000 compared to a loss of $239,000 during Q1 of 2015.[316]

May 9, 2016: Ting Mobile Continues to Grow Adding 12,000 New Users in Q1

Number of Ting Mobile Customers Note: Ting started in February 2012. Prior to the earnings report for 2013:Q4 Tucows did not break out the number of customers or devices so the number of customers in Q1 through Q3 for 2013 is estimated. (Click on chart to expand.)
Gross Additional Customers Per Quarter (Click on chart to expand.)
Chart 6: Churned Customers Per Quarter (Click on chart to expand.)
Net Additional Customers Per Quarter (Click on chart to expand.)

Ting Mobile Added 12,000 Accounts and 18,000 Devices in Q1 2016

Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that "Ting Mobile had an outstanding quarter, adding over 12,000 accounts and 18,000 devices. That brings our total to over 140,000 accounts and 220,000 devices. This was a significant spike-in as relative to recent quarters. And I must note was driven by a one-time influx of customers, migrating from another MVNO that closed its doors."[317]

Ting added 7,000 New Customers in a One-Time Influx Migrating from Another MVNO

Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that much of the increase in customers was driven by a one-time influx of customers, migrating from another MVNO that closed its doors. "In late January, PlatinumTel Wireless, also known as PTel, alerted its customers that it will be shutting down the service and included Ting among a few recommended mobile providers. Ting welcomed roughly 7,000 of these customers and early behavior and usage indicate that they are satisfied and well-suited to be great additions to our base."[318]

Ting Mobile Offered a Service Credit to Ptel Customers to Come Over to Ting Mobile

In answer to a question from David Tomljenovic, Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that "with those 7,000 PTel customers, we offered a service credit to bring them over and turning out to be great piece of [ph] calc, but all of that gets taken in, in the quarter. So there's a fair bit there."[319]

It is Unlikely There Will be More Opportunities Like Ptel in the Next Year

In answer to a question from David Tomljenovic, Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that it is unlikely that there will be any other non-organic opportunities out there like Ptel that might come to closure in the next six to 12 months. "One of the biggest challenges, David, is price points. And so you have to be able to bring over another company's customer base at something similar around price points. So for instance, a deal or two that we look at, you might see, and only from a distance because by the way there's not a lot of action in the vertical in the space, you might see a chunk of unlimited customers with really, really high daily usage. You've almost got to assume them as a 100% churn when you're bringing over. And if you're vendor, you want to get paid for that, right. So you're going to want to find somebody who has got plans that you can map on to a little better. So it's tricky. I think its, what? It's good business, but it's hard to find."

Ting Mobile Expects About 5,000 Net Adds in Q2

In answer to a question from Hubert Mak, Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that Q2 looks kind of like Q1 with about 5,000 net adds exclusive of the one time addition of users from the MVNO that closed its doors. "I think you want to be modeling in that 5%, 6%, 7% and we'll take you up and keep you tracking as we're going along there."[320]

Ting Mobile's Churn Rate Fell to 2.39%

Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that Ting churn fell to 2.39% in Q1, down from 2.73% in Q4. "This appears to be the result of three factors. The first is seasonality. With a history of only four-plus years and hyper growth that has obscured other trends, we are just starting to get meaningful data on seasonable ups and downs. It appears the first half of the year tends to bring lower churn and the second half of the year higher churn, with Q4 typically being the worst."

"The second factor, surprisingly, is the growth of GSM customers as a portion of our base. In their first few months, GSM customers appeared to us to be more transient. In fact, as that base has matured, they are proving to be even slightly more loyal than our CDMA base and are having a positive impact on our retention, when looking at the cohort data."

"The third factor is our own retention work. As we mentioned on the last call, we've been identifying predictors of churn in our customer data and have launched same efforts against our at-risk customers. We have begun to see some early success there and will continue to get more aggressive on that front."[321]

There is a Lot of Effort Being Expended to Generate More Gross Add

In answer to a question from Hubert Mak, Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that there is a lot of work going on in Ting Mobile; almost all of it is with respect to generating more gross add. "Certainly, a fair amount of work going into continuing to drive that churn number down, but the real focus is on generating more gross adds; and I think that with all of the three headings or three buckets that I have talked about, they all take real work to put the pieces in place. So that work is certainly meaningful. That work is kind of the core focus of all of the people in that group.

And I think the simplest way to think about it, if you want to take a good positive look at that, I talked about the simple exercise of routing calls between support calls and presales calls, that's something that just about every company, every mobile phone company in the world does, and they tends to do it with an aggravating IVR system.

We're really looking at taking the 15% to 20% of our interactions today that are presales and trying to more efficiently route, maybe it does end up being IVR much simplified, but even getting that 15% to 20% of interactions in the hands of folks that are more trained up and skilled up to convert those leads into sales will have an impact, so it's really simple blocking and tackling like that."[322]

Ting Mobile's Data Prices Are Too High and Gross Margins Are At the Top of Their Range

In answer to a question from Hubert Mak, Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that "I think I had always said two things or have consistently said them for the last little while, one, that our data prices are too high, and as competition in the industry has stepped up that's really been exposed more and more, and then that that's because our costs are too high, and that our gross margins are towards the top end of our range. So there is nothing that I have to announce, so that's evident, but certainly those two things are both true." [323]

Ting Mobile is Continuing Efforts in Retail Distribution, Affiliate Programs, and Sale Capabilities

Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that despite the one-time migrations from PTel and the decline in churn in Q1, the underlying trend on Ting net add is not at all where we wanted to be and that Ting Mobile is continuing its efforts in three areas: retail distribution, affiliate programs and sales capabilities.

None of these will provide instant lifts, but each has the potential to provide long-term impact.

In retail distribution, we are learning from our existing relationships and pursuing more of them. We are particularly interested in working closely with retailers large and possibly very small that offer a high-touch experience. As Ting tends to win, the more shoppers are encouraged to contrast and compare.

On affiliate programs, we're exploring large channel partners and beginning the same sort of experimentation we do with any other marketing vehicles. This is essentially just direct response marketing with an inside track. So for example, a discrete offer to military personnel through a private website that validates their identity or an offer to large company employees that appear on the back of their biweekly paychecks. For each, we can test target, placement, offer and message to find winners and scale.

On direct sales, we are just beginning to build an internal team, establish our infrastructure and processes and identifying new marketing channels to drive calls. In fact, the greatest initial hit would very likely come from just redirecting prospects that already come to our site everyday. All visitors to the Ting site today get the same phone number, whether they are customers or prospects, and all reps are expected to juggle those very different types of calls. By pushing prospects towards a dedicated sales team, we are leveraging people who are handpicked and trained to convert those leads. Just as we have said about improving conversion on the website, a small improvement on thousands of prospect calls a month can make a big difference in our numbers. With the success of our customer referral program and some of our most effective podcasters and bloggers, it is clear that Ting is most appealing when is explained by someone familiar, passionate and knowledgeable.

At its simplest, the acquisition areas we are pursuing are intended to connect more prospects to retailers, organizations and sales people that will do just that. I note also, that the biggest thing we can do for mobile adds is to deal with our data cost and thereby deal with data pricing. This is something we continue to work on with both our carrier partners.[324]

Affinity Marketing of Ting Mobile Is a Step Function With Long Lead Time

In answer to a question from Jamie DeYoung, Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that Affinity marketing is quite kind of step function. "You're going after kind of a longer lead time big fish there. And I think when I say about affinity is we continue to have good discussions, there are a couple of interesting trials going on this quarter. Those tend to be -- they're not things that are visible. It would be great, if we have one or two of them to begin to talk about specifically next quarter. But I'd have to take a step back and think about short of something that's very visible, like consumer cellular with AARP. If we really want to be on the call talking about detail around some of that, I know, that I'd love if some of my competitors is were. So I'd want to give that some thought."[325]

Ting Mobile Is Going to be Looking at Some of the Best Practices of its MVNO Competitors

In answer to a question from Hubert Mak, Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that now we need to start learning from the things that everybody else is doing. "So I think the simplest way to think about it, the way that I've been expressing it is, we did a great job for four years doing things differently than everybody else has been doing. We've kind of taken that to where we've gotten and now we need to start learning from the things that everybody else is doing. The good news in that for me is we have loads of examples to learn from. It's a lot easier to try and layer in things that are working consistently for most are all of your competitors around you than it is to try and come up with new and normal strategies. So I think if we can just do an okay to pretty good job of doing what everybody else is doing that in the coming quarters that starts to have a real impact."[326]

May 9, 2016: Ting Internet Took Some Big Steps This Quarter

Ting Internet Has Launched a Campaign to Measure Demand in Charlottesville and Holly Springs

Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that Ting Internet took some big steps forward in Q1. "With our system in place to take $9 pre-orders, we began mapping demand at the neighborhood and street levels in our existing Ting towns to help plan our network builds. We can also now measure demand in a perspective town like Holly Springs to determine whether the potential justifies the investment. This transition from a world where only serviceable addresses could order to one where everyone in these towns could now pre-order, justified casting a much wider net with our marketing. Working with an outside creative team and local production crews, talent and musicians, we developed a campaign for each town around the idea, a great town deserves great internet, with movie theater spots, radio, billboards, print, direct mail and in Charlottesville, where there are local network television affiliates television ads. And I note, those ads are available on YouTube, if you're interested in looking for them. Since launching the campaign in late March, we have seen a sustained lift of 150% in website traffic from these towns. We are also pleased with the levels of pre-order, particularly in the Holly Springs, where we are now completing the deal and planning the build."[327]

Ting Internet Has Announced a Fourth Market for Consideration in Sandpoint

Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that in March, Ting Internet announced their fourth market for consideration, the Greater Sandpoint, Idaho area, where we would serve the town of Sandpoint and eventually the towns of Dover, Ponderay and Kootenai. "The area has a combined population of around 10,000 residents. Smaller than our first three markets. Indeed, Sandpoint is likely smaller than any town that any commercial provider in the new wave of gigabit internet providers has looked at in the U.S. A number of you have asked me, if it make sense to build a fiber network in a market this size. We look at each market individually and there were a few factors here. First, Sandpoint has reasonable density, over 1,000 people per square mile. Second, Sandpoint has solid connectivity to the greater internet. But Sandpoint has one market condition that none of our other markets have. The best internet connection you can reliably buy in Sandpoint is 12-megabits per second. That is extremely slow. We are told that it is often also unreliable and expensive. Market like Sandpoint is an important experiment, to see whether the increased take-up rate we expect from less competition makes up for some slight operating inefficiencies."[328]

Ting Internet Is Seeing Cost Come in Within its Parameters

Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that Ting Internet continues to see build cost coming in within its parameters. "Thus we continue to be happy with $2,500 per connected home and a $1,000 dollars in annual gross margin as well as take-up rates of 20% in the first year and 50% over five years."[329]

Ting Internet Will Probably Be Entering Two or Three Additional Markets In 2016

In answer to a question from Patrick Retzer, Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that Ting Internet will probably be entering two or three additional markets this year. "Four is not impossible; one is not impossible; but best guess two or three."

Noss added that Ting Internet is actively working on 12 to 15 additional markets that are in the pipeline. "It's really a function of how you define active. I'd bet you if I just look at what's in the pipeline, well, like 12, 15 anyway. But there's plenty. And those are ones that we've decided to actually enter into the internal tracking system. There's probably another a dozen, 20 on top of that, where there has been a contact, the discussion, an engagement of sort of. It's very much sellers market in that regard."[330]


Comment on January 7, 2017: Tucows announced on September 21, 2016 that Ting will be bringing fiber to Centennial, CO, population 107,201 (2014 Census), the largest Ting town by population to date.[331]

The Backbone of the Buildout in Charlottesville Will Be Completed by the End of 2016

In answer to a question from Patrick Retzer, Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that by the end of this year, the overwhelmingly most addresses in Charlottesville will be able to order. "There will be the odd little pocket where that's not the case, and of course, with MDUs that's a building-by-building another thing. And Charlottesville does have a fair number of MDUs over a third of the residences. But we're actually just starting in this last quarter, we've really just started to get to the final stages and start to light up our very first MDUs."[332]

May 9, 2016: Domains Had a Steady Quarter

Tucows Continues to See Steady Performance in the Domains Business

Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that Tucows continues to see steady performance in our domains business. "Our retail channel Hover turned in another strong quarter, with revenue up 19% year-over-year and net cash contribution up 32%. The Hover customer base grew another 15% from the end of Q1 last year. The renewal rate at 82% is very strong relative to the industry and remarkable for a pure-play domain service. In our wholesale channel, average margin remains strong in Q1, up 6% from Q1 of last year, as we continue to benefit from our shift in sales mix to higher margin registrations. We are also quite pleased with how our reseller base has evolved and our volumes have endured, despite what could have been unfavorable trends in the web hosting industry."[333]

There Are Two Unfavorable Trends in the Web Hosting Industry

Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that there are two unfavorable trends in the web hosting industry. "First, traditional web hosts, which have been the core of our reseller base, since the launch of OpenSRS have lost market share to new website building services. Second, many of those traditional web hosts among our resellers have been acquired by large registrars. At the same time, however, we have refreshed our reseller base and replace that volume by landing some of the most successful brands in that class of site building services, including company's like Squarespace and Shopify. These services and others like them have made it dead simple to build a website and conduct online. They continue to gain share and to welcome new users into the category, and we're thrilled to be along for the ride. Our renewal rate was a bit lower again this quarter, as few large resellers that had left us continue to transfer domains away upon renewal. This is not representative of our larger base and our overall renewal rate remains strong relative to the industry. We added 16 new gTLDs in Q1. This is fewer than we had added in recent quarters, and we do expect the quantity of new gTLD launches to slow as the program matures. That said, we expect the quality of the new adds to pick up, as some of the most anticipated TLDs under contention are resolved. The number of resellers who have registered at least one new gTLD expanded to more than 2,500. That's up about 7% from the end of Q4 and 30% from Q1 last year."[334]

The Acquisition of Melbourne IT Was an Excellent Opportunity

Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that the acquisition of Melbourne IT was an excellent opportunity to acquire a loyal profitable base of resellers that share the same core needs as our existing wholesale customers. "The quarter saw us take advantage of our leadership in our wholesale domains business through acquisition of the international reseller channel of Melbourne IT. To be clear, by international I mean everything outside of their domestic markets of Australia and New Zealand," said Noss. "This was an excellent opportunity to acquire a loyal profitable base of resellers that share the same core needs as our existing wholesale customers. In total, the deal added 1.6 million domain names under management that generate $13 million in annual revenue and $2 million in gross margin, for which we paid $6 million. We expect to generate a little bit of operating synergy from the acquisition. But given that we didn't acquire any operations, there isn't much more on the expense side than a few hundred thousand dollars. There are some additional service opportunities that we will explore in that we offer a much broader range of ccTLDs and new gTLDs."[335]

May 3, 2016: Tucows Bans Ads, Phony Download Buttons from Software Download Site

Tucows reported on May 3, 2016 that they have banned deceptive ads, hidden download buttons, pop-ups, flypaper, toolbars and other such Internet nastiness from the the nearly 40,000 software titles it hosts for users on it's download sites. “On the Tucows downloads site today, you’ll find no flashing ads. No toolbars. No pop-ups,” said Elliot Noss, CEO of Tucows. “You might see a few plugs for other Tucows services, but nothing too egregious… and certainly not anything that’s pretending to be a download button.” With Tucows’ success in wholesale and retail domain names and more recently with mobile phone service (Ting) and fiber Internet (Ting Internet), tucows.com/downloads has become less relevant when looking at the balance sheet. “We don’t lightly walk away from opportunities or revenue,” said Noss. “In the end, though, we’d rather have the Tucows name associated with good; with a belief in the power of the Internet to affect positive change. An ad-heavy site that packages browser toolbars along with every download isn’t something we want people to think of when they hear ‘Tucows,’."[336]

April 14, 2016: Google Working on Technology to Beam Wireless High Speed Internet Directly to the Home

Re/Code reported on Apri 14, 2016 that Google is working on a plan to beam wireless broadband directly into homes. If Google can figure out how to make the technology work, it would solve the expensive “last mile” problem that broadband companies usually tackle by stringing a web of wires directly into homes and giving Google’s parent, Alphabet, which runs Fiber, a plausible path to build out a nationwide network that could go head to head with broadband incumbents like AT&T, Verizon, Charter and Comcast. Access CEO Craig Barratt, who oversees Fiber, said the company is working on connecting wireless towers to existing fiber lines, and that it is “experimenting with a number of different wireless technologies” to make that happen.

Barratt said that wireless high speed internet would not displace fiber but would complement fiber in low density environments where it is too expensive to run fiber. "One of the things that is intriguing about wireless is that it allows you reach houses and users that are in lower density settings — where fiber becomes too expensive. So providing fixed wireless services using some of the technologies we think are ways of accelerating our deployments. We think, over time, there will be a sort of heterogeneous mix of technologies that we can use, depending upon the type of problem we’re trying to solve."

Barratt added that Google is serious about fiber as a business. "Overall, it’s a space that’s really ripe for innovation, both in terms of the core technology and also different approaches to the business model. And I think that will have long-term impact on the fundamentals of the business and help us shape how we invest going forward," says Barrat. "There’s huge interest among the cities because they see such a profound benefit of having cutting-edge Internet in their city. The cities are very important partners to us — they can help private sector investment create benefit for the city and the residents.[337]

April 9, 2016: Google Fiber Drops Free Basic Service in Kansas City

Consumers in Kansas City can get $70 gigabit internet access from Google, but there has usually been a far more frugal option: you could get free 5Mbps service if you were willing to pay a construction fee. John Fingus wrote in Engadget on April 9, 2016 that Google has quietly dropped that free tier in Kansas City, its first Fiber area, and has replaced it with a 100Mbps option that costs $50 per month. Anyone using the free tier has until May 19th to say they want to keep it. According to Endgadget, this could reflect a broader change in Google's fiber strategy. "Simply put, Google has fiercer competition from incumbent carriers -- it may have to offer a fast-but-affordable selection to get those customers for whom the gigabit option is either too costly or sheer overkill," says Fingus. "Whatever the motivations, Google is clearly beyond the days when Fiber was merely an experiment in very high-speed internet access -- it has to be a money-maker."[338]

April 5, 2016: Elliot Noss: Ting Fiber is Looking for a Few Good Mayors

Peter Nowak published an interview with Tucows CEO Elliot Noss at Alphabeatic on April 5, 2016 where Noss talks about bringing super-fast fiber broadband to underserved U.S. cities focusing on smaller towns like Charlottesville, Virginia (population: 44,000), Westminster, Maryland (population: 18,000), Holly Springs, North Carolina (population: 29,000), and Sandpoint, Idaho (population: less than 10,000). Noss says Ting decided to get involved in a hundred-billion-dollar market because "everybody hates the competitors." "The internet is today being serviced by old retrofitted telephone or television infrastructure and nobody will build proper infrastructure."

Noss says that as far as finding markets to go into, it’s a seller’s market for Ting Fiber because there are not a lot of companies for cities and towns to partner with. "We’re partnering only with cities and towns that have already decided they want a gig [network], their business model and are kind of at the point of ready-to-go," says Noss. "We’re only dealing with cities and towns that have made the decision – the enlightened decision – that they want gigabit and they understand what business model they’re going to go with."

Noss says that Ting isn't getting involved in providing fiber in Canada because "there aren’t the people screaming who had to engage in self help from the bottom up like there are in the U.S. In the U.S. you have much more noise and political action on a municipal level on this issue. We have loads of mayors talk about their citizenry complaining about their internet access all the time." According to Noss the U.S. has had a burgeoning municipal fibre movement for six to eight years but in Canada, there is nothing and that no mayor in Canada has ever contacted Tucows about fiber broadband. "I try to say whenever I can that no mayor [in Canada] has contacted me and I hope that gets in print enough that a mayor contacts me."[339]

March 29, 2016: Elliot Noss: Does Building Fiber Internet in a Small Town Make Economic Sense?

Tucows CEO Eliot Noss has a new "Ask an Exec" video on the Tucows Web site where he discusses whether building fiber internet in a small town like Sandpoint makes economic sense. Sandpoint is a smaller market that anything Tucows has looked at before and anything that any commercial provider has looked at. But according to Noss, Sandpoint has some reasonable density with over 1,000 per square mile density. "The experiment is a simple one," says Noss. "Sandpoint has one other characteristic that no other market that Google Fiber or any of the other fiber providers have ever gone into. The best internet connection you can buy in Sandpoint today is about 11 MB/sec. That is extremely slow. We have been told by people in Sandpoint that their internet connectivity is slow, unreliable and expensive. The task is a simple one. You are going into a market where obviously the overhead will be a little higher than in another market but building costs should be similar at the per home level. Does that extra take-up rate that you get by having that dearth of competition make up for that bit more overhead in operating?"

Noss says that there are efficiencies in operating in the four current Ting Internet towns and that the number one efficiency is that Ting Fiber is learning more lessons. "We need to be a learning machine. We are getting better at how to do a roll out, how to do a build. Holly Springs is the first Ting town where we are going at it in the way we will for the next four or five years. We are doing a bunch of marketing before we are live in the market. We are doing pre-orders. This is the right way to roll out in a town. The efficiencies are just around the general learning operationally."

Noss says that Ting Fiber will continue to do customer service out of Ting's two customer service centers. All of the back office operation is all very centralized. In a local operation Ting will have a town manager, Ting will have a local retail presence and Ting will have some local presence around installation and maintenance. After that what we do will be idosyncratic to every town.

Noss says that it is a trueism that the first person to build fiber in a community is probably the last person to build fiber and that we are really in the early days of bringing fiber to North America. There is basically "Google Fiber and Ting Fiber - where is everybody else? We think there will be tens and maybe hundreds of companies like us bringing fiber across North America. There are 20,000 towns. This is not a land rush. It is going to take place over 15 or 20 years and there is lots of room for hundreds of competitors."[340]

March 29, 2016: Elliot Noss: Ting Fiber Expects to Have a TV Product by the End of 2016

Tucows CEO Eliot Noss has a new "Ask an Exec" video on the Tucows Web site in which he says that Ting Fiber expects to have a tv product on the market by the end of the year. "The reason we want that is to increase the take rate of the internet product. We don't view it as product in and of itself. Customers say I am not happy with my current provider. I don't really want to deal with them at all."[341]

March 28, 2016: Does Building Fiber Internet in a Small Town Like Sandpoint Make Sense?


By population, Sandpoint, ID and the Greater Sandpoint Area makes for the smallest potential Ting town that we've considered.

March 28, 2016: What's to Stop Another Provider Trying to Take Over a Ting Town?


Incumbents are taking notice in some Ting towns. What's to stop them trying to lay fiber and compete on a more even playing field?

March 28, 2016: Does Ting prefer to own the network? Or light the network?


Should a city or town own the fiber networks? Or should they look to the private sector to bring better Internet to its people.

March 28, 2016: Where Does Ting Internet Find Efficiencies Between Towns?


When you're laying and lighting geographically separated fiber networks, you learn a thing or two along the way.

March 28, 2016: Should an Internet Provider Have a TV Product? What's Up with Ting TV?


People are used to getting TV service from the same people that provide them Internet.

March 28, 2016: How Can a Town Make Itself More Attractive to a Fiber ISP?


Fiber infrastructure is the new major highway project, connecting smaller cities and towns to the world and levelling the playing field. Stands to reason, cities and towns across the US want it.

March 15, 2016: Tucows to Acquire Melbourne IT’s International Wholesale Domain Reseller Channel

Globalnewswire reported that Tucows announced on March 15, 2016 that it has entered into a definitive agreement to acquire the international wholesale domain reseller channel of Melbourne IT Limited (ASX:MLB). The acquisition will add hundreds of resellers and approximately 1.6 million domains under management to Tucows’ OpenSRS wholesale domain business. Tucows will not acquire any of Melbourne IT’s operations and the transaction will be immediately accretive to earnings. “This acquisition represents an excellent opportunity to acquire a loyal, profitable base of resellers that have the same core needs as our existing wholesale customers. Importantly, the scalability of our OpenSRS platform allows us to meaningfully expand our base of domains under management while adding minimally to our operating costs,” said David Woroch, Tucows’ EVP Domains. “Wholesale domain services for web hosting companies and ISPs has been a core component of the Tucows business for more than 16 years. Today, we are one of the largest wholesale domain name registrars in the world and the step function growth from this transaction will allow us to even better leverage our platform as we continue to invest in the business.”[342]

March 11, 2016: Elliot Noss Says the Long March to Fiber Will Take Many Roads

Tucows CEO Elliot Noss wrote on the Ting Blog on March 11, 2016 that the United States is a long way from a truly competitive market for broadband but how cities get "fibered up" depends a lot on local variables. "I speak with mayors and city leaders all over the country. Most prefer a private partner to provide the capital and engage in the construction project required to build a fiber network. It is simply easier politically, economically and bureaucratically" says Noss. "I tell every mayor I speak with that if I were them, I would build it myself and have the city own this most important piece of infrastructure. This would allow them to ensure that their citizens receive high levels of Internet service, both speed and reliability, and customer service." But building a municipal fiber network sufficient to provide Fiber-to-the-home (“FTTH”) is rare, expensive and takes a long time to build. "It is also worth it and should be done everywhere! But it won’t be and I think it is important that we respect and understand the different choices that will be made. For most cities today, having a private partner will be their only choice and getting that symmetrical gigabit fiber network is more important than how they get it."

According to Noss all the talk of competition and open access is nice, but is unlikely to happen in the US for a long (long) time. "There are currently tens of markets with true symmetrical gigabit fiber connections broadly available. There are nearly twenty thousand who will have them available over the next twenty years. Ting Internet, and others who will follow us, will rightly look at unserved markets before going into a market like Huntsville and competing. What IS truly important is the spectre of competition, which a network owned by the city provides. This will serve to keep suppliers on their toes and, in and of itself, should be enough to create much higher service levels than the abyssmally low ones we find today. When we at Ting Internet are entering a new market, of course we look at the existing cableco and telco situation in a city or town, but we do not consider it truly competitive any more than a horse drawn carriage is competitive with a car."

Noss concludes that solutions to creating fiber infrastructure are as unique as the cities and towns they will inhabit. And most importantly, there is unlikely to really be any competition inside of markets until much later in this long march to fiber. "For now, let’s those of us who view the fiberization of North America as a mission [...] focus on what we can do to get as many cities and towns fibered up as we can. Then let’s turn our mind towards competition."[343]

March 9, 2016: Tucows Files 10-k for FY2015

Analysis to come

March 7, 2016: Joichi Ito Resigns from Tucows Board of Directors

Tucows filed a Form 8-K with the SEC on March 7, 2016 for a Change in Directors or Principal Officers stating that on March 1, 2016, Tucows Inc. (the "Company") received a written letter of resignation from Joichi Ito stating that Mr. Ito resigned, effective immediately, from his position on the Board of Directors (the "Board") of the Company. Mr. Ito's resignation from the Board is not a result of any dispute or disagreement with the Company.[344]

Ito is a Japanese-American activist, entrepreneur, venture capitalist and Director of the MIT Media Lab who has received recognition for his role as an entrepreneur focused on Internet and technology companies and has founded, among other companies, PSINet Japan, Digital Garage and Infoseek Japan. He maintains a blog, a wiki and an IRC channel. Ito is the chairman of the board of PureTech Health. Ito is a board member of Sony Corporation, The New York Times Company, the John S. and James L. Knight Foundation, the John D. and Catherine T. MacArthur Foundation, and General Partner of Neoteny Labs.[345]

Ito joined Tucows' Board of Directors on December 15, 2008.[346]

March 2, 2016: Ting to Bring Fiber to Greater Sandpoint, Idaho

Sandpoint, Idaho. Ting Fiber has announced plans to bring crazy fast fiber Internet to the Greater Sandpoint, ID area including the towns of Sandpoint, Dover, Ponderay and Kootenai. Comsumers in those towns can pre-order Ting Internet at ting.com/sandpoint as part of the initial “demand assessment” phase. Assuming there is sufficient demand for fiber, network construction would begin later in 2016. Photo: Wikipedia

Nasdaq reported on March 2, 2016 that Ting Fiber has announced plans to bring crazy fast fiber Internet to the Greater Sandpoint, ID area including the towns of Sandpoint, Dover, Ponderay and Kootenai. Comsumers in those towns can pre-order Ting Internet at ting.com/sandpoint as part of the initial “demand assessment” phase. Assuming there is sufficient demand for fiber, network construction would begin later in 2016.

“Internet speed and infrastructure is an issue that is on the national agenda,” said Elliot Noss, CEO of Ting and its parent company Tucows. “While it’s obviously very important to get major metros connected with fast fiber Internet, Ting Internet is proving that the fastest Internet access available isn’t just for city centers. Smaller cities and towns need faster, more reliable Internet too. Maybe even more so.” “We’re always happy to team up with towns and cities that get it,” said Adam Eisner, Director of Networks for Ting. “Gigabit fiber is the next generation of Internet access and it will power the next generation of ideas.”

“If there’s one industry that needs Ting perhaps even more than mobile, it’s cable and Internet access,” said Noss. “For too long, people and businesses have had no choice, or at best the illusion of choice, as to who provides them with access. They have been held hostage by contracts and forced under bandwidth caps. We’re changing that.”[347]

Elliot Noss reported in the fourth quarter earnings report conference call on February 9, 2016 that entering three to five new markets in 2016 is still possible but there are two caveats. "One, sometimes municipal processes move a little slower than one would like and I think that as we get further incidence we see more of that, but two, and probably more importantly, it’s going to be about the number of homes we pass as much as it's going to be about the number of markets. So we’ve got a couple slightly larger markets that were looking at and we might do little bit less in terms of number of markets but the same amount of kind of fiber in the ground. So I do want to put that caveat out there as well."[348]

Sandpoint (Ktunaxa: kamanqukuǂ[4]) is the largest city in, and the county seat of, Bonner County, Idaho.[5] Its population was 7,365 at the 2010 census. Sandpoint lies on the shores of Idaho's largest lake, 43-mile-long Lake Pend Oreille, and is surrounded by three major mountain ranges, the Selkirk, Cabinet and Bitterroot ranges. It is home to Schweitzer Mountain Resort, Idaho's largest ski resort, and is on the International Selkirk Loop and two National Scenic Byways (Wild Horse Trail and Pend Oreille Scenic Byway). Among other distinctions awarded by national media in the past decade, in 2011 Sandpoint was named the nation's "Most Beautiful Small Town" by Rand McNally and USA Today. Interesting enough, Sandpoint is the birthplace of Sara Palin, the controversial Republican vice-presidential nominee in 2008. Sandpoint is also the birthplace of Ben Stein, lawyer, writer, political commentator and actor, who had a major supporting in the 1986 classic John Hughes comedy, Ferris Bueller's Day Off.[349]

March 1, 2016: Ting Mobile Slashes International Call Prices

Telecompaper reported on March 1, 2016 that Ting Mbile has announced improved international calling rates for all of its customers, offering much lower rates to call over 150 countries. Pricing is identical on both the GSM and CDMA services and international calling is now enabled by default on all Ting accounts. The prices start at USD 0.01 a minute to Canada and Mexico, down from USD 0.15 and USD 0.20 respectively. Examples of other popular destinations include China, the Philippines and the UK, which now all cost USD 0.02 a minute, compared to USD 0.10, USD 0.52 and USD 0.52 respectively.[350][351]

March 1, 2016: Centennial City Council Approves Fiber Master Plan

The City of Centennial, Colorado reported that in March, 2016, the Centennial City Council approved a Fiber Master Plan and allocated $5.7 million for its implementation. Today, that plan is taking shape and includes the build-out of approximately 50 miles of new backbone fiber. Construction is expected to start before the end of 2016; with an estimated 18 to 24 months until the City’s entire fiber backbone build is complete. The City is continuing discussions with our community anchor institutions, such as fire districts, the Sheriff’s Office, the school districts, and Stormwater Authority, among others, who will have the option to use the City’s backbone fiber as the project moves forward.

Access to high capacity, affordable Internet is considered a key economic driver in today’s economy, and a necessity for business productivity, attraction and retention. It can also result in better public services such as traffic management, enhanced public safety, and telehealth opportunities. Creating this fiber backbone will enhance the connectivity of our community; meaning that any interested party can connect to our fiber backbone via a non-exclusive lease arrangement in order to provide high-speed Internet and telecom services to its customers.[352]

February 28, 2016: Ting Fiber Expects to Finish Wiring Charlottesville Within the Year

Charlottesville Tomorrow reported on February 28, 2016 that Ting Fiber expects to have the infrastructure in place to serve the entire city of Charlottesville within the year. “We are moving into Fifeville, [Jefferson Park Avenue] and the Fry’s Spring neighborhoods,” said Baylor Fooks, co-founder of Blue Ridge InternetWorks which was acquired by Ting Fiber in 2014. “We have coverage in those neighborhoods; we are just waiting for the rest of the poles to be permitted.” To serve a new neighborhood, Ting must string fiber-optic cables to existing utility poles, a process that requires permitting. “We spent a great deal of our first 12 months getting permits and essentially upgrading utility poles so they are ready for us to attach to,” Fooks said. “That process took a little longer than we had hoped.” Getting the fiber-optic cables required for Ting’s service installed across town has been challenging, thanks to deteriorating utility poles and other utilities getting priority, Fooks said.

Once a neighborhood has the requisite infrastructure, Ting still must run fiber-optic cables to individual houses before service can start. That process is not cheap: the services come with a $399 setup fee. For North Downtown customer Ricardo Padron, the initial expense has been worth it. “The install was $400, and we got it for $200 through a special offer,” he said. “I think it should pay for itself inside a year, but that was my one issue, the expense.” Once the house has been wired, customers pay $89 a month for the gigabit service, according to Ting’s website. With Ting installed, Padron and his family canceled their Comcast cable service and have not looked back. In the absence of cable TV, the Padrons rely on streaming services such as Netflix. “We realized that we didn’t watch a lot of cable, we were mostly streaming, and we weren’t satisfied with Comcast Internet,” he said. “The streaming is beautiful. We have noticed that the picture quality is markedly better.”

With citywide availability about a year away, Ting has its sights set on eventual expansion into Albemarle County. Making the leap from urban to rural service provider promises bigger challenges, Fooks said. “It definitely becomes a more difficult problem the less dense the community is,” he said. Without help from the Albemarle government, expansion much past the urban ring will be tough. “The rural communities that have been successful in attracting fiber companies like Ting have made all these resources available to the private sector,” Fooks said. Albemarle has issued a request for proposals for a plan to extend high-speed Internet to the more remote parts of the county, and fiber-optic will be a crucial part of the infrastructure.[353]

February 16, 2016: Ting Fiber is Finalizing its Plan for Holly Springs

The Triangle Business Journal reported on February 16, 2016 that Elliot Noss says Ting Fiber is in the middle of a “demand generation exercise” to figure out if there’s sufficient interest in Holly Springs. "For the next few weeks, not only is the company gauging Holly Springs’ interest, but it’s also evaluating which neighborhoods are most interested in fiber," writes Lauren K. Ohnesorge. "Should there be a roll out as planned, it’s likely those neighborhoods would be targeted first." Noss says the Ting Fiber plans to invest between $3 million and $6 million in Holly Springs in 2016. “That will allow a significant portion of the city to have access to fiber,” says Noss. “Most of that will go toward network engineering and construction, which we’re hoping to start shortly.” Ting Fiber plans to invest in local staff, facilities and network equipment in Holly Springs. The number of staff hired will depend on what the final plan is, he says – “and what skills and people we can find locally.”[354]

February 9, 2016: Tucows Announces Strong Growth in Fourth Quarter

Chart 1: Stock Price Chart for TCX from January 1, 2012 through February 9, 2016. In February, 2012, Tucows launched Ting, a mobile virtual network operator (MVNO). Ting's launch coincided with a rise in Tucows (TCX) stock price. Tucows' stock price has risen 498% since January 1, 2012. The S&P 500 has risen 44% over the same period. (Click on chart to expand.)
This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.
Incremental Contribution from Ting (Before Taxes and Other Expenses) (Click on chart to expand.)
Tucows EBITDA Per Quarter (Click on chart to expand.)

See also:

Quarterly Revenue Increased 16% YOY

Tucows announced on February 9, 2016 that revenue for Q4 surpassed the $45 million mark for the first time bringing the total for the year to almost $173 million, representing year-over-year growth of 16% and 17% respectively. "Over the course of the year, we saw steady growth in the gross margin contribution of Ting Mobile as the customer base expanded," said Tucows CEO Elliot Noss. "In fact, the fourth quarter marked the milestone of sorts as, for the first time, the gross margin contribution of our network access business exceeded that of our domain services business."[355]

Net Income for the Year Increased 82% YOY

Tucows announced on February 9, 2016 that net income for the full year came to $11.4 million or $1.04 per share, an 82% increase from $0.57 per share in Q4 of 2014. Net income for the fourth quarter of 2015 increased to $3.1 million or $0.29 per share from $1.9 million or $0.16 per share in Q4 of 2014.[356]

Adjusted EBITDA for the Year Increased 70% YOY

Tucows announced on February 9, 2016 that adjusted EBITDA for the year came in at $25.6 comfortably above Tucows' increased guidance of $25 million and representing year-over-year growth of 79% for the quarter and 70% for the year.[357]

Tucows Provides Guidance of $30 million Adjusted EBITDA for 2016

Tucows announced on February 9, 2016 that the company is providing adjusted EBITDA guidance of $30 million, up from the $25 million achieved in 2015. "We note that this includes a roughly $2.5 million benefit from the continued decline of the Canadian dollar as well a roughly $2.5 million operating investment in the Ting Internet business as it gets off the ground.," said Noss. "We feel good about this number as striking nice balance between growth and investing in the future."[358]

Tucows Had a Decrease of $4.1 Million in Cash Flow from Operating Activities

Michael Cooperman reported in the fourth quarter earnings report conference call on February 9, 2016 that Tucows had a decrease in cash and cash equivalents of $4,175,107 from the end of the previous quarter. "Turning to the balance sheet, cash and cash equivalents at the end of Q4 2015 was $7.7 million compared with $11.9 million at the end of Q3 2015 and $8.3 million at the end of Q4 2014. The decrease relative to the end of Q3 is primarily the result of our using $5.4 million during the most recent quarter to repurchase just over 231,000 shares under our open market share buyback program," said Cooperman. "We also used $1.3 million for payment of withholding taxes on the net exercise of stock options by employees and directors. In addition, we invested just over $900,000 to acquire additional property and equipment, the majority of which was invested in expanding Ting's Internet fiber footprint. These uses of cash were partially offset by positive cash flow from operating activities of approximately $1.5 million."[359]

Tucows Invested $0.9 million, Primarily in Ting Fiber

Michael Cooperman reported in the fourth quarter earnings report conference call on February 9, 2016 that Tucows invested just over $900,000 to acquire additional property and equipment, the majority of which was invested in expanding Ting's Internet fiber footprint.[360]

Tucows Repurchased 231,000 Shares in Q4 for $5.4 million

Michael Cooperman reported in the fourth quarter earnings report conference call on February 9, 2016 that Tucows spent $5.4 million during the most recent quarter to repurchase just over 231,000 shares under our open market share buyback program.

Elliot Noss added that "that brought the total number of shares repurchased under the open market program to just shy of 850,000. With another 194,000 purchased under the Dutch Tender earlier in the year. In total, in 2015, we repurchased a little over 1 million shares or a little more than 9% of shares outstanding at the end of 2014 for a total investment of $23.6 million."[361]

Tucows Board Approves Up to $40 million for Stock Buybacks in 2016

Tucows announced on February 9, 2016 that its Board of Directors approved a stock buyback program to repurchase from time to time up to $40 million of its common stock in the open market. The new $40 million buyback program will commence February 10, 2016 and will terminate on or before February 9, 2017. The Company’s previous buyback program, which commenced February 16, 2015 and was scheduled to end on or before February 15, 2016, has been terminated as the Company has repurchased approximately $20 million of its common stock, the maximum dollar amount permitted under that program. Purchases for the new $40 million buyback program will be made exclusively through the facilities of the NASDAQ Capital Market. All shares purchased by Tucows under the stock buyback program will be retired and returned to treasury.[362]

In answer to a question from Patrick Retzer, Elliot Noss reported in the fourth quarter earnings report conference call on February 9, 2016 that Tucows has raised their stock buybacks to $40 million because this year Tucows topped out of our number. "You can see just by doing the math on what we’ve announced that we missed out on some real value in the last couple of weeks or the open window of this year. I think the best answer I could give you, Pat, is EBITDA went up 60% this year and the stock is up less than 2%. I think if I’m not mistaken it closed today at less than we were tendering for in January of 2015 and we got less than 20% of that tender. So we kind of felt that markets are somewhat irrational, and if they choose to be we want to be ready. One of the things that I said in the last couple of calls and certainly talked about with the number of investors, it’s a balance and the choice between how much money we put in the ground in fiber, how much money we spend on the stock, how much money we look at other opportunities with is really about the specific opportunity that we’re looking at, at that specific time. So I just -- I can tell you about it if the stocks stayed around these prices all of next year and that could be because of the exogenous global factors, we could spend that much money."[363]

February 9, 2016: Ting Mobile Continues to Grow

Number of Ting Mobile Customers Note: Ting started in February 2012. Prior to the earnings report for 2013:Q4 Tucows did not break out the number of customers or devices so the number of customers in Q1 through Q3 for 2013 is estimated. (Click on chart to expand.)
Gross Additional Customers Per Quarter (Click on chart to expand.)
Chart 6: Churned Customers Per Quarter (Click on chart to expand.)
Net Additional Customers Per Quarter (Click on chart to expand.)

Ting Mobile Added 6,000 Accounts and 10,000 Devices in Q4 2015

Elliot Noss reported in the fourth quarter earnings report conference call on February 9, 2016 that Ting Mobile added 6,000 accounts and 10,000 devices in Q4. "That brings our total to 128,000 and 202,000 devices, again, impressive numbers from zero just four years ago and 5% sequential growth in the base in a quarter is good in any business but still a disappointing finish to the year considering our stronger rate of growth up to this point."[364]

Ting Mobile's Churn Rate Rises to 2.73%

Elliot Noss reported in the fourth quarter earnings report conference call on February 9, 2016 that Ting Mobile had an uptick in churn to 2.73% for the quarter. Previous quarters had reported churn of 2.5%. "As we’ve discussed before this is partly the product of our growing and slightly more transient customer base in the GSM service. It might also reflect some ongoing follow-up from our travails with customer support following the spread changes in Q1 and likely also reflects a more difficult competitive environment as has been noted by the incumbents over the last couple of quarters in their conference calls. Importantly, we are now large enough to see meaningful gains in any small improvements to our retention."

"So we are diving deep into every bit of data at our disposal both structured and unstructured to find the drivers and predictors of churn and to launch tactics against them. We have plenty of arrows in our quiver. We have a support team now that is not only staffed to answer every call quickly and handle every issue capably but one that has started taking on proactive outbound initiatives to welcome, nurture and save. We can extend ourselves further to help customers switch devices or networks to improve their experience. We can do more to help our customers manage their usage and realize the kind of savings we know they would not be able to get with any other provider."[365]

Tings Average Monthly Customer Spend is $37, Gross Margins Are a Little Above 50%, and Acquisition Costs are Under $100 Per Customer

Elliot Noss reported in the fourth quarter earnings report conference call on February 9, 2016 that key customer metrics on the business remain the same, average customer revenues about $37 a month, a phone bill of $23 to $24 per device, gross margins are just north of 50% and average cost for acquisition is still comfortably under $100.[366]

Net Adds for Q1 Will Increase to 11,000 With One-Time Influx of Customers from T-Mobile MVNO PTel

Elliot Noss reported in the fourth quarter earnings report conference call on February 9, 2016 that net adds for Q1 2016 will be comfortably over 11,000 due to a one-time influx of customers from another key T-Mobile MVNO PTel that closed its doors after 15 years in the business. "Those customers will help give us the best quarter of gross adds we have ever had and likely put our net adds comfortably over 11,000. So good news for sure and it is just great to have that recurring margins starting right at the beginning of the year but we do not wanted to distract from a base line net adds trend but that we are determined to improve. As always, we will keep you apprised as we engage in the work."

In response to a question from Huberk Mak, Noss added that aside from the one time influx of customer from PTel, future net adds will be closer to Q4 than it was for the fourth quarter previous of 9,000. "But again, as is always our practice, we are going to look to know next quarter what worked and what didn't. I don’t mind unpacking because we didn’t do it in the remarks and there is a lot of stuff there that with retail we’ve seen a little bit of kind of a little ray of positivity there. We found a little bit in pile of things we’re trying that looks like it is a keeper. Now we got to keep out it, I don’t want to be too specific about it but so we’re it obviously did blow the doors off the numbers but we do see some stuff that looks it is worth keeping in the mix."

In answer to a question from David Tomljenovic, Noss added that "the PTel thing was fairly one off. We’ve always looked for customer basis on the mobile side, any banker who asks me what they can find for me in terms of assets, so if there is any banker listing out there, I always talk about mobile customer basis but it’s not only that there is a mobile customer basis that only that they want to set but it’s also that they have a pricing paradigm that allows us to migrate pretty quickly. We‘re not really super eager to run a bunch of multiple brands or leave at different price point. That kind of complexity as we got the -- is what has gotten in the incumbents in such trouble with their billing and back office and their whole customer service, and we will avoid that. So I think PTel is a little bit one off."[367]

Ting Mobile Will Be Shifting Its Marketing Approach to Gathering Leads and Nurturing Those Leads to Conversion

Elliot Noss reported in the fourth quarter earnings report conference call on February 9, 2016 that Ting Mobile will be shifting from a pure marketing approach to acquisition with a focus on driving awareness and traffic to the site, to a sales approach that includes greater effort to gather leads and nurture those leads to conversion. "So much of what we’ve done over the past four years has been intended to break the mold of how carriers typically operate including how they acquire customers because we believe there is a lot there but it’s inefficient and ineffective. We’ve been incredibly successful in this regard. Now we’re just taking a peek back at both and identifying some tactics that particularly when done in our voice and with our customer driven approach could make growing this business a bit easier."

Noss added in answer to a question from David Tomljenovic that the marketing strategy should not impact the customer acquisition cost. "We think that -- so everything we are looking at tends to come in at the margin at similar levels to what we are paying now. So when I say paying now, remember I always gear as anybody does a blended number. So what we are paying for that marginal customers certainly more expensive than that. And what we’re seeing in the things that we’re trying doesn’t really blow that number up much. Probably most importantly, David, there is such a gap in the economics of customers for us, there's such a gap between the long-term value of the customer and the customer acquisition cost that, frankly, if I could ramp it up significantly I would happily double my CAC."

In answer to a question from Hubert Mak, Noss added that "we want to kind of take some more traditional approaches but do them in our way, in a slightly different way. I don’t want to hear market better have a more clever television commercial or they’re doing the NFL Halftime Show and we'll at the NBA Halftime Show. It’s not at all like that. I think you’ve heard about some specific approaches and we think inside of those specific approaches we can do that in our voice and in our way, and really hopefully get some traction out of that."[368]

Ting Mobile's Gross Margins Are About Right

In answer to a question from David Tomljenovic, Elliot Noss reported in the fourth quarter earnings report conference call on February 9, 2016 that gross margins in the long-term range of 45% to 50% which we think strikes a nice balance. "We are a little bit at the top end of that range. I think if we were convinced today that materially dropping price would something that would really change move the needle, we might look at it. I would note that sadly for us the place where we would most want to address price is in data pricing, and that’s the place where we have the lowest margins. So we really have the least flexibility there unless we want to start to play the breakage gate and that gets a little bit more dangerous or little bit more risky. So we think today that there is so much value still in the packages that we’re offering that we’re really looking at other things to try and sort of move the needle."

In answer to a question from Hubert Mak, Noss added that Ting Mobile does not have the absolute lowest price although for a significant portion of users we do. "I think that there is enough savings and you could still just look at the fact that the vast majority of the market I want to say high 80% of the U.S. market is with the big four carriers and we are absolutely less expensive than they are for the vast majority of users. So there is enough value in the pricing."[369]

Ting Mobile is Extending Their Distribution Through Krogers, Staples, and Amazon.com

Elliot Noss reported in the fourth quarter earnings report conference call on February 9, 2016 that Ting Mobile is extending their product distribution beyond their website for the first time with Ting SIM cards on the shelves of Kroger and Staples locations nationwide and an Amazon.com. "Now, we will seek to expand and promote these partnerships more aggressively. The early returns show that there is some potential and we have to see what this can become with some nurturing. We are also pursuing channel partnerships that we know are a big part of the acquisition mix for the major carriers. These include affinity and advocacy groups, trade associations and large employers that routinely secure special offers for their members."

In answer to a question from Pete Lanctot, Noss added that "we were lucky to get in stores just on the sell in time for the holiday season but we weren't able to do any in-store promotion or end-caps and we were able to do some of that in January. If you had been in the right Kroger you might have seen on the floor in front of the Tucows -- sorry, from the Ting SIM cards in front of all the SIM cards on that floor a big kind of team sticker I guess I'd call it on the floor. And it's things like that that we think can start to help and contribute or at least determine what the potential of these really sort of push on the potential these opportunities. And I think the other element of that is longer term, Pete, and that one of the things that we hear from our customers all the time is this version of, "I love you guys, I tell my friends about you, they have never heard of you and don’t have a clue who you are," and that hurts. And they’re telling us this because it is hurting their ability to kind of hurt their friends. So we think that things like these in-store retail displays will help that, if there is just a credibility in that, all I saw that on the aisle, on the floor that must be real. And so that’s something that really takes a fair bit of time in the oven to contribute."[370]

Ting Mobile Is Fully Staffed At Their Call Center

Elliot Noss reported in the fourth quarter earnings report conference call on February 9, 2016 that their support team is now not only staffed to answer every call quickly and handle every issue capably but has started taking on proactive outbound initiatives to welcome, nurture and save customers. "We can extend ourselves further to help customers switch devices or networks to improve their experience. We can do more to help our customers manage their usage and realize the kind of savings we know they would not be able to get with any other provider."[371]

Ting Mobile Is Finding that GSM Customers Are More Transient

Elliot Noss reported in the fourth quarter earnings report conference call on February 9, 2016 that GSM customers are more transient causing greater churn. "ecause GSM is a global standard, you can find phones more easily than you can with CDMA or phones with the Sprint Network, and so people tend to come and go little easier. One of the things that I talked about on earlier calls is that there is a certain percentage of the user base, for instance, Snowbirds from Canada or people who are coming over from Europe to work for a year, those people who used to potentially use CDMA now would be much more like when you use GSM phones. So we just see this higher churn level on the GSM side, we’re trying to put as fine a point on it as we can, but that’s the best way of understand it."

However Noss added that the long term value of CDMA and GSM customers is pretty similar. "When you start to sort of throw all the costs into the file, the long-term value of customers looks pretty similar and we still think the more important sort of product variable is to not confuse people by making them do things like too arbitrarily have to choose a network, people don’t understand things like that. So really what we’ve done historically we've been seeing product experience through the purchase is have the device drive it. Now we have identified a couple of places where we might be confusing people a little more than we hope and we’re in the process of cleaning those up."[372]

February 9, 2016: Ting Fiber is Moving Ahead

Ting Fiber is Active in Westminster MD, Charlottesville VA, and Holly Springs NC

Elliot Noss reported in the fourth quarter earnings report conference call on February 9, 2016 that Ting Internet continues to build both networks and brand awareness in our current towns and talk to perspective new towns. "We're now servicing business in residential gigabit Internet customers in a couple of neighborhoods in Westminster, Maryland, and are leading the next phase of the municipal fiber build there. We’re also serving customers in most parts of Charlottesville, Virginia where we are building the fiber network ourselves. We announced in Q4 and discussed here on the Q3 call that we would begin demand assessment in Holly Springs, North Carolina, a potential third Ting town. This process of demand assessment represents a simple but profound change in the way we are now managing our Ting Internet business."

"So just to run through some basic parameters in the Ting Internet business we’re now in three towns including Holly Springs with the total of roughly 35,000 potential serviceable addresses. That is addresses that we could eventually build to and service in these towns. We expect to add at least that many potential serviceable addresses again this year with new towns. We continue to benchmark the cost of building and connecting a home at roughly $2,500 and the gross margin from connecting a whole and roughly $1,000 per year." [373]

Tucows has Invested $900,000 in Ting Fiber this Quarter and Expects Capex Investment in Ting Fiber to be Around $15 to $20 million in 2016

Elliot Noss reported in the fourth quarter earnings report conference call on February 9, 2016 that Tucows has invested just over $900,000 to acquire additional property and equipment, the majority of which was invested in expanding Ting's Internet fiber footprint.

Noss said that he expects CapEx investment in fiber to be in the range of $15 million to $20 million. "There is some variability in this number and it really is just a best guess at this point. It should not be looked out with the same precision at EBITDA guidance. It is unlikely to be much more than that and it could possibly be less. I also note that CapEx investment in fiber is beneficial from a tax perspective."[374]

In answer to a question from Hubert Mak, Elliot Noss reported in the fourth quarter earnings report conference call on February 9, 2016 that "the one caveat he wants to put on the $15 to $ 20 million investment is that "I did say that’s something that’s really going to evolve it’s going to depend on the speed of the builds, it’s going to depend also on the type of builds. So there is some markets that we look at as you saw in Charlottesville where we bought some fiber going in. So you could see some of that money actually spent potentially on small acquisition of a fiber network just as easily as laying fiber in the ground."[375]

Ting Fiber Will Refine the Pipeline in 2016, Break Even in 2017/2018, and Contribute in a Real Way in 2019

In answer to a question from John Lewis, Elliot Noss reported in the fourth quarter earnings report conference call on February 9, 2016 that "in 2016, we are really sort of refining the pipeline elements. I don’t think we’re really good at it yet, but that’s what you got to do in business and get out there and iterate and learn. I think that we see all the time we watch Google fiber very closely, we see them learning lessons with every market they go into, and they're a great learning machine, so we watch them pretty closely. And there is really nobody else engaged in a similar exercise that kind of working through a pipeline, willing to go coast to coast, and willing to do gigabit fiber like that. So we think as more people come in to the market that we more learning to have."

Elliot Noss reported in the fourth quarter earnings report conference call on February 9, 2016 that Tucows investors should think about investment in 2016 and most of 2017 and that Ting Fiber should start to swing to breakeven late in 2017 or early in 2018 and contribute in a real way in 2019. "We see the investment through that time period being a reasonable one, not one that will cause EBITDA to stop consistently growing. As is our practice we will continue to share visibility as we learn and experience more and as the first markets start to ripen."[376]

Tucows is Using a 15 year Amortization Period for Hardware in Ting Fiber

In asnwer to a question from David Tomljenovic, Elliot Noss said in the fourth quarter earnings report conference call on February 9, 2016 that Tucows is using an amortization period of "typically 15 years with some significant acceleration in the first year."[377]

It is Still Possible Ting Fiber May Enter 3 to 5 New Markets in 2016 - With Two Caveats

In answer to a question from Patrick Retzer, Elliot Noss reported in the fourth quarter earnings report conference call on February 9, 2016 that entering three to five new markets in 2016 is still possible but there are two caveats. "One, sometimes municipal processes move a little slower than one would like and I think that as we get further incidence we see more of that, but two, and probably more importantly, it’s going to be about the number of homes we pass as much as it's going to be about the number of markets. So we’ve got a couple slightly larger markets that were looking at and we might do little bit less in terms of number of markets but the same amount of kind of fiber in the ground. So I do want to put that caveat out there as well."[378]


Comment on January 7, 2017: Nasdaq reported on March 2, 2016 that Ting Fiber has announced plans to bring crazy fast fiber Internet to the Greater Sandpoint, ID area including the towns of Sandpoint, Dover, Ponderay and Kootenai. Comsumers in those towns can pre-order Ting Internet at ting.com/sandpoint as part of the initial “demand assessment” phase. Assuming there is sufficient demand for fiber, network construction would begin later in 2016.

Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that in March, Ting Internet announced their fourth market for consideration, the Greater Sandpoint, Idaho area, where we would serve the town of Sandpoint and eventually the towns of Dover, Ponderay and Kootenai. "The area has a combined population of around 10,000 residents. Smaller than our first three markets. Indeed, Sandpoint is likely smaller than any town that any commercial provider in the new wave of gigabit internet providers has looked at in the U.S. A number of you have asked me, if it make sense to build a fiber network in a market this size. We look at each market individually and there were a few factors here. First, Sandpoint has reasonable density, over 1,000 people per square mile. Second, Sandpoint has solid connectivity to the greater internet. But Sandpoint has one market condition that none of our other markets have. The best internet connection you can reliably buy in Sandpoint is 12-megabits per second. That is extremely slow. We are told that it is often also unreliable and expensive. Market like Sandpoint is an important experiment, to see whether the increased take-up rate we expect from less competition makes up for some slight operating inefficiencies."[379]

Tucows announced on September 21, 2016 that Ting will be bringing fiber to Centennial, CO, population 107,201 (2014 Census), the largest Ting town by population to date.[380]

Tucows Says There are Lots of Target Markets for Ting Fiber

In answer to a question from David Tomljenovic, Elliot Noss reported in the fourth quarter earnings report conference call on February 9, 2016 that there are lots of target markets for Ting Fiber and that that's only going to increase. "There's nearly 20,000 cities and towns in the U.S., some have political issues, many, many, many don’t. So when I talked earlier about municipal politics small p, getting in the way it’s really just about decision making processes and information flows and things like that. So we’re not in any way feeling opportunity constrain, we think there is loads of target out there and that that's only going to increase."[381]

It is Too Early To See if Ting Fiber Will Have a Cross Branding Effect on Ting Mobile

In answer to a question from Patrick Retzer on whether Ting Fiber has seen any cross selling benefit for the Ting mobile, Elliot Noss reported in the fourth quarter earnings report conference call on February 9, 2016 that Tucows has not even begin to actually market in that way and we won’t probably until Charlottesville will is the first market that’s going to ripen for us. "t will take another year or two before we are through just building out the town addressing all the MDUs of the great opportunities, we haven’t even -- there is so much turn our mind to there and what inevitably happen is you start to get some contiguous opportunities. And so, we've got a lot of need on the brand before were turning our mind to that I think. So it's naturally the case and we looked at some of the data, people are markedly with the brand, people have a good experience, they want to know about it."[382]

Investing in Infrastucture Like Fiber Is a Very Safe and Positive Return Play

In answer to a question from Mark Miller, Elliot Noss reported in the fourth quarter earnings report conference call on February 9, 2016 that when you’re talking to banks about infrastructure and construction it’s a lot more comfortable for them. "So what I can tell you, Mark, is that what I’ve seen out in the market and by this I mean some of the other fiber builds and fiber companies and their relationships with lenders, it’s quite encouraging. There is a lot of money looking, as you know, lot of money looking for good consistent return and boy investing in infrastructure like fiber is just – it’s a very safe and positive return play."[383]

The Current Demand for Ting Fiber in 2016 is About 7,000 Homes

In answer to a question from John Lewis, Elliot Noss reported in the fourth quarter earnings report conference call on February 9, 2016 that the current demand for 2016 for fiber is something like 7,000 homes.

John Lewis: I think the read is the current demand for 2016 for fiber is something like 7,000 homes; is that approximately right?

Elliot Noss: What did you do to get to that 7,000, was that a 20% of 35,000?

John Lewis: Yes, basically, and then I tied kind of your CapEx number.

Elliot Noss: So remember that you’re going to be based on two things there, one, that 35,000 is being finished in all three of these towns, right, and in one of these three towns it’s not our build, it’s city build. So exactly not all of these towns are going to be built; certainly Holly Springs will not be completed in 2016, we would love to get to a nice piece of it if everything checks out there. Charlottesville we will start to get pretty close but would probably spill into 2017 somewhat. And the second thing is is in the early stages of builds and Holly Springs are starting de novo. In the early stages of build, you’re also building a fair bit of mile, right, you’re not kind of -- it is tough to kind of take the CapEx spend and then just turn it into serviceable addresses. I think that as we kind of continue vary I wanted to sort of layout couple of important things here is what 2016 looks like, here's what the longer term look at the fiber business looks like, it is going to sometime in the next couple of quarters when I start to give some visibility some penetration in Charlottesville.[384]

The Most Important Factor for Ting Fiber to Enter a New Market is the Willingness of a City to Work Together

In answer to a question from John Lewis, Elliot Noss reported in the fourth quarter earnings report conference call on February 9, 2016 that "at the very top of the list is a city willingness to kind of work closely with us, their engagement and excitement around fiber itself and so is the right infrastructure mix whether that's access to poles or conduits, whether that's sort of a preexisting fiber builds there is things like that really can make the whole exercise much, much easier. And we’re getting better at that, I think I’ve said in the last call that in '15 we were kind of learning how do I deal with the blocking and tackling and actually lighting up a customer, getting the install process down, getting the core elements of customer service."[385]

February 9, 2016: Domain Services are Steady

Another Quarter of Solid Performance in Domain Services

Elliot Noss reported in the fourth quarter earnings report conference call on February 9, 2016 that there was 2015 was another year of solid performance from our domain services business and Q4 was no exception.

Retail was the primary growth driver there with revenue up 18% for both the quarter and the year. We continue to see contribution growth well in excess of 20% as a result of the operating leverage in the business. We expect continued solid numbers out of retail going forward based on our outstanding customer service and experience. This was once again underscored by year-over-year customer growth of more than 14% as well as the renewal rate that was well into the 80s.

In our wholesale channel increased margins per domain and reduced cost resulted in a strong year of business results. Driven by the shift in sales mix the higher margin registration, average margin for domain in Q4 was 13% year-over-year and bested the Q3 number which was the highest we’ve seen in years.

Our renewal rate on wholesale dipped just a bit in Q4 to 76%, still an outstanding rate relative to the industry. This was driven by a few large resellers that had already left our service transferring your domain names away upon renewal and is not representative of the larger base.

We added another nine new gTLDs in Q4 more importantly we now have nearly 2,400 resellers who have registered at least one new gTLD. Adoption of multiple TLDs by resellers tends to bring three distinct benefits to our business, incremental registration, increased margin per domain, and greater loyalty to our service. Contribution from our international resellers continues to grow with market outside of North America and Western Europe accounting for 28% of new registration in Q4.[386]

Tucows Released an Additional Batch of Domain Names

Elliot Noss reported in the fourth quarter earnings report conference call on February 9, 2016 that "an additional batch of domain names acquired with the June 2006 acquisition of Mailbank.com should not be renewed and were allowed to expire. Accordingly, these domain names with a book value of $137,000 have been written off and reported as an impairment of indefinite life intangible assets."[387]

Tucows is Not Actively Exploring the Sale of Its Domain Portfolio

In answer to a question from John Lewis on whether there is some number that Tucows would consider for the sale of its domain portfolio, Elliot Noss reported in the fourth quarter earnings report conference call on February 9, 2016 that "we don’t think it’s a likely for us."

John Lewis: GoDaddy is gotten more active in buying domain portfolios and I went to your site and saw if you add up your 70,000 dotcoms I think the asking price is about $90 million. I know obviously it's a illiquid asset and you only sell a tiny fraction of that every year, but I know you have a lot of attractive opportunities to invest capital including aggressive share repurchases. How do you think about what rate or what discount you would take for, I mean, obviously, it's all theoretical but is there some number here that you would consider exploring a sale of that domain portfolio?

Elliot Noss: Yes, so I think that, what would I say? Probably, two things. One, we always talk to everybody. I mean, you've known us long enough to know that we're a relationship organization and so we’re always talking to everybody. Other than GoDaddy there are a not a lot of buyers for the very high end of that market. I think the second thing I'd share, Is we look at that as of practical not a strategic asset. And so the number is probably somewhere between what you trade at and what we can get today.

John Lewis: Sorry, wait just to understand what you said there. Do you mean the carrying value and what you’re asking for it?

Elliot Noss: No, no, it’s not like we have an asking price for the portfolio, it's -- we probably wouldn’t need it to be accretive at an EBIDTA level in a sale, but it’s not we haven’t seen a price that we like at all. We don’t think it’s a likely for us.

John Lewis: Okay, just for simplicity is it, I mean would you have to take is it $0.40 on the dollar of the asking price, ballpark or can you any give any kind of range on what it’s could work is it fairly significant asset?

Elliot Noss: Yes, it’s a significant asset probably to give you a range I would be compromising my ability to do the best for you with.[388]

February 4, 2016: MVNOs: The Phone Companies People Actually Love

Bloomberg published a story on February 4, 2016 that says that MVNOs now account for 36 million (1 in 10) U.S. wireless subscriptions, roughly double their 2009 numbers while during the same time period, subscriptions at the Big Four rose 28 percent. According to Bloomberg in the old days, the US had 150 U.S. MVNOs but even with brands like Walt Disney and ESPN backing them, many failed in a matter of months, often squeezed by the cost of network capacity. Today the U.S. has about 300 MVNOs, 60 percent of them profitable, estimates Alex Besen, chief executive officer of consulting firm Besen Group. However the success of the new generation of MVNOs imposes a ceiling on how much each can grow. The Besen Group estimates that 50 to 60 MVNOs will be launched in 2016 making it tough to make new MVNOs stand out.

Driving their rise are two fundamental changes in the way the wireless industry operates. First T-Mobile led an industrywide push away from the two-year service contracts familiar to U.S. wireless customers, making it easier for people to comparison shop and change providers. Second phone companies stopped the practice of “locking” their phones, meaning that for the first time you could move your iPhone from Sprint’s network to AT&T’s without having to buy a new one. “The shift in how handsets are purchased has been hugely beneficial for MVNOs,” says Susan Welsh de Grimaldo, an analyst for Strategy Analytics.

Three MVNO brands sit at the top of Consumer Reports’ latest industry rankings for customer service satisfaction—Consumer Cellular, Ting, and Republic Wireless. "Good customer service and low prices have a pretty broad audience," says Michael Goldstein, a vice president at Ting, which claims about 200,000 subscribers. “Those of us who are hungry and are doing back flips are doing a better job pleasing people.”[389]

January 14, 2016: Ting Fiber Begins Pre-Orders for Holly Springs

The Ting Blog announced on January 14, 2016 that residents of Holly Springs can express interest in Ting Fiber by pre-ordering - "plunking down $9 to commit to installation of gigabit fiber Internet from Ting early in the process." The $9 pre-order commitment will help Tucows gauge where the most serious interest lies and Ting expects to have some firm network plans to share by the end of this calendar quarter "It’s a complex process and requires a lot of work before any fiber is laid. That said, it’s a process we have experience with and that we are comfortable navigating."[390]

Elliot Noss reported in the fourth quarter earnings report conference call on February 9, 2016 that Ting Fiber has added a $9 million preorder option to its website for prospects that are not yet serviceable in towns that we are doing this work. "This allows us to measure interest and secure adoption in towns and neighborhoods before ever investing to build there. It will be a crucial part of our process now as we compare respective towns and plan our builds in existing towns."[391]

December 21, 2015: Elliot Noss Discusses Ting Mobile and Fiber Strategy During Podcast with 'Domain Name Wire'

Tucows CEO Elliot Noss had a 34 minute podcast with Andrew Alleman of 'Domain Name Wire' on December 21, 2015 where he talked in detail about Ting's strategy in both mobile and fiber and why these businesses are particularly suited to Tucows.

Ting Business Processes Are a Natural Extension to Hover

Noss said that one of the things that he habitually overestimated in the domain name business was service providers' ability to upsell and cross sell and that Tucows had this experience with its reseller network and that was the idea they brought to Ting Mobile. "My original conception of it and the way I was able to sell my board and then Sprint was that we had this fantastic distribution network and that was how we were going to be different as an MVNO because I had to answer lots of 'MVNO has never worked before, why should this be different questions.' Luckily for us, the retail offering used a lot of the same approaches as Hover and it really did take off and it's really a very successful business."

Noss said that the original idea of Ting Mobile was "Let's design a mobile phone service that you would want to be a customer of." According to Noss there really wasn't any great prescience other than looking at what Tucows was doing at a business process level with Hover and identifying that Tucows could be in the MVNO space with essentially the same set of business processes. "When I took [the Ting Mobile idea] to the original engineer that I engaged with and asked 'Here is Sprint's API and is there any reason this can't just look like a registry under our (Hover) platform. And he said, No, that's not a problem.' Because if we would have had to do what others did which was outsource the billing system, outsource the customer interface we wouldn't have been able to innovate around pricing and service design in the same way."

"It is even less of a logical leap [to go into internet service]. Almost from the time we first launched Ting Mobile we were getting tweets and comments on Facebook. 'Now I love my phone company, can you please replace my cable company.' There was kind of a natural clamoring. Obviously the business systems are even less of a leap."

Tucows Likes to Compete Against Large Entrenched Monopolies and Oligopolies

Noss said that he thinks that his business career has been defined by being a tiny little guy taking on large incumbents and monopolies and he would much rather compete against a cable company than GoDaddy.

Ting Fiber Uses the Capex That Ting Mobile Throws Off

Noss said that Ting Mobile has fantastic unit economics but because of the way Ting Mobile engages in marketing there are scalability challenges. "We can't spend twice or three times, or ten times as much and keep our customer acquisition metrics the same. There are kind of natural limits."

But according to Noss Ting Mobile is spinning off loads of cash which Ting Fiber can use because it is a very capital intensive business. "You flip over to the fixed internet business. Very different. Tons of Capex. But that is good because we have capital to deploy as long as the returns are good."

Ting Fiber is More of a Local Business Which Aligns with Tucows' Strengths

Noss said that if you look Ting Mobile, it is a national business but Ting Fiber is deeply local. "It couldn't be more of a local business. It's about going to the local festivals, the local media, billboards. And that suits us. We find out that that is more aligned with the way we do business than this big national business."

Ting Fiber Has a Tremendous Long Term Opportunity

Noss said that Tucows deeply believes there is a tremendous opportunity with fiber because North America has slow expensive internet and the US especially just has swaths that are just way underserved. "The internet today essentially sits on retrofit infrastructure that was originally created for first telephone and then television. End to end fiber is the first purpose built infrastructure for the internet. We have no doubt that 15 years from now the vast majority of connections will be end to end fiber."[392]

December 3, 2015: Ting Gets Top Marks From Consumer Reports for Value and Customer Satisfaction for Second Consecutive Year

ABS News reported on December 3, 2015 that Consumer Reports asked 90,000 of its subscribers to rate their cell service and gave Consumer Cellular and Ting top marks for value and customer service. "We asked them about data, texting, voice and customer service. Then we asked them if they got good value for the money," said Karen Jaffe, Consumer Reports. "People who use Consumer Cellular and Ting gave top marks for value and customer service, but they were also quite pleased with the data and voice." Ting customers like Scott Yules are billed for the service they use rather than paying a flat rate. "What made me switch was the bill. My bill literally cut in half," Yules said. Ting uses both the Sprint and T-Mobile networks. It offers a variety of phones, including the Samsung Galaxy S6 and the Apple iPhone 6s. Ting also makes it easy to check and see whether you can use your old phone.[393]

Consumer Cellular came in first place out of 10 postpaid carriers with an overall score of 89 out of 100, followed by Ting, which scored 88. The next four carriers were GreatCall/Jitterbug, Credo Mobile, Virgin Mobile, and US Cellular, which all scored in the 70s. These smaller carriers beat the big ones with "lower costs and responsive, knowledgeable staff members" and innovative offerings. "Some of them compensate subscribers who use less service than they've planned for," Consumer Reports wrote. "For instance, Republic Wireless and Ting Wireless charge customers only for the minutes, texts, and data actually used—not what consumers signed up for."[394]

In November, 2014 Ting came out on top as the best mobile wireless provider in Consumer Reports' 2014 survey with a company rating of 91 out of 100 because of their excellent service and customer support. According to Glenn Derene, the Electronics Editor for Consumer Reports, “Smaller providers like Ting, Consumer Cellular, and Republic have excellent satisfaction ratings because they’re designing innovative strategies to keep plan costs down for their customers and simplify their service options.”[395]

November 23, 2015: Tucows Participates in Fourth Annual Carroll Biz Challenge

The Ting Blog reports that Michael Goldstein, VP of Sales and Marketing, represented Ting as one of the judges at the fourth annual Carroll Biz Challenge sponsored by by the Chamber of Commerce in Carroll County where Ting Internet is rolling out fiber in Westminster. The contest offers local entrepreneurs an opportunity to pitch new business ideas, make connections, and compete for valuable prizes – "think American Idol meets Shark Tank!"[396]

November 18, 2015: Fiber Construction in Holly Springs Could Begin In Early 2016 Depending on Demand

The News Observer reported on November 18, 2015 that Ting Internet is now assessing demand in Holly Springs in order to bring its gigabit download and upload speeds to the town and it is now it is up to residents to let Ting know about their interest to ensure these faster Internet speeds reach their homes and businesses. “Wherever the interest is shown on their maps is the area that they’ll target first,” said Jeff Wilson, town information technology director. “(So far) there’s been a lot of interest, and Ting has been very pleased with the demand generation.” Construction could begin as soon as early 2016, and Wilson said the company expects the “first customers to come online around early summer.”

Holly Springs built their own 13-mile fiber network in mid-2014 for $1.5 million to serve town facilities. It is now about 17 miles. Ting will be granted a license to access unused town-owned fiber and build the “last mile” to homes and businesses. “The businesses really crave it, the bandwidth that they will need for what they do,” Mayor Pro Tem Tim Sack said. “It will be a big business attractor.” But details of the fiber license agreement are still being worked out. “The town has got the fiber optic (network) in the ground that any company can come in and lease strands from us,” Sack said. A lease agreement between the Town of Holly Springs and Ting Internet would not prevent other Internet providers from leasing town fiber. “(Residents) need to be aware that they need to show interest,” Sack said. “It’s going to be up to that interest spurring Ting on to put it in the neighborhoods.”[397]

According to Triangle Business Journals, Ting joins Holly Springs’ current providers of broadband Internet service – CenturyLink, AT&T, Time Warner Cable and Clarity Communications. While some Holly Springs residents do have access to fiber through other services, town officials say it’s “only a small percentage.” “The town has received numerous requests from homeowner associations, residents and businesses asking what we have been doing to attract additional providers in Holly Springs,” Wilson says.[398]

November 14, 2015: Ting Plans to Expand in Charlottesville in 2016

Samantha Baars reported on November 14, 2015 at C-ville that just five months after Ting launched its high-speed Internet network in Charlottesville, the company has given almost half the city access to "crazy fast" fiber internet. “We’re very pleased with the subscribers that we’ve received so far based on our coverage,” says Baylor Fooks, a general manager at Ting and cofounder of Blue Ridge InternetWorks. Ting has targeted downtown and several neighborhoods including Belmont, Martha Jefferson, Jefferson Park Avenue and Rugby Road and plans to expand to more homes in the city by the beginning of 2016 and into Albemarle County shortly thereafter.

According to Fooks feedback has been overwhelmingly positive. Grit Cafe, a food and coffee shop with several locations including one on the Downtown Mall, has used Ting for about two months and advertises it on the sandwich board outside its door. “Internet access is obviously a huge part of our offering,” says owner Brad Uhl, adding that some customers use the cafe as a secondary office location. Grit employee Anthony Fitzgerald says that while he’s on the job, customers often praise the service and say it’s faster than theirs at home.[399]

November 5, 2015: Tucows Announces Strong Growth in Third Quarter

Tucows Adjusted EBITDASince Q1 2014. Tucows announced on November 5, 2015 that Adjusted EBITDA for the third quarter of 2015 increased 43% to $7.0 million from $4.9 million for the third quarter of 2014. "Adjusted-EBITDA grew 42% to a record $7 million," said Noss, "and brought our total for the first nine months of 2015 to just over 19 million, which is already well in excess of the 15 million we generated for all of 2014."[400]

See also:

Net Revenue Increased 15% YOY

Tucows announced on November 5, 2015 that net revenue for the third quarter of 2015 increased 15% to $44.6 million from $38.9 million for the third quarter of 2014.[401]

Net Income Increased 18% YOY

Tucows announced on November 5, 2015 that net income for the third quarter of 2015 increased to $3.2 million, or $0.29 per share, compared with $2.7 million, or $0.24 per share, for the third quarter of 2014.[402]

Adjusted EBITDA Increased 43% YOY

Tucows announced on November 5, 2015 that Adjusted EBITDA for the third quarter of 2015 increased 43% to $7.0 million from $4.9 million for the third quarter of 2014. "Adjusted-EBITDA grew 42% to a record $7 million," said Noss, "and brought our total for the first nine months of 2015 to just over 19 million, which is already well in excess of the 15 million we generated for all of 2014."[403]

Tucows Reiterates Guidance of $25 million Adjusted EBITDA for 2015

Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that "EBITDA for the first nine months of 2015 was just over 19 million, 19.3 million to be exact. As I’ve discussed in the past, our fourth quarter historically tends to be a little softer than the third, despite that we are comfortable reiterating the guidance we provided last quarter of $25 million for the year."[404]

Tucows Generated $6.8 million in Cash Flow from Operating Activities

Michael Cooperman reported in the third quarter earnings report conference callon November 5, 2015 that Tucows generated 6.8 million in cash flow from operating activities. "Cash and cash equivalents at the end of the third quarter of this year were 11.9 million compared to 15.3 million at the end of Q2 and 13.6 million at the end of Q3 of last year. The decrease relative to the end of Q2 of this year was primarily related to our using nearly $10 million during the quarter to repurchase 390,000 shares under our ongoing share buyback program. We also invested approximately 700,000 to acquire additional property and equipment almost all of which was increasing our fiber footprint. These uses of cash were partially offset by generating 6.8 million in cash flow from operating activities. Deferred revenue at the end of the third quarter was 74.4 million up 2% from 73 million at the end of the third quarter of last year and less than 1% from 74.3 million at the end of the second quarter of this year."[405]

Tucows Invested $0.7 million, Primarily in Ting Fiber

Michael Cooperman reported in the third quarter earnings report conference call on November 5, 2015 that Tucows "invested approximately 700,000 to acquire additional property and equipment almost all of which was increasing our fiber footprint."[406]

Tucows Repurchased 390,000 Shares in Q3 for $10.0 million

Michael Cooperman reported in the third quarter earnings report conference call on November 5, 2015 that Tucows spent "nearly $10 million during the quarter to repurchase 390,000 shares under our ongoing share buyback program."

Elliot Noss added that "that brings our total repurchases for 2015 to just over 637,000 shares for a total spend of $14.5 million or $22.76 a share. It is worth nothing that as our share price and trading volume continues to increase, so is our ability to spend more capital through our open market buyback program. In general this probably means, slightly more open market and slightly less such options. We continue to analyze conditions each quarter and assess the variables that we’ve talked about so many times in making the determination as to what to do."[407]

November 5, 2015: Ting Mobile Continues to Grow

Gross Adds in Ting Mobile. Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that "net adds have essentially stayed the same over the past few quarters, but we’re comforted that gross adds continues to grow. Q3 was the biggest quarter for gross adds in the history of Ting."[408]
Churn in Ting Mobile. Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that "our growing cancels are still mostly just a product of a growing base. We did see a slight uptick in our churn rate in Q3 to just under 2.5%. This appears to be partly the result of a more transient customer base on the GSM service, which makes sense given the increased device portability on that side. These customers typically make less effort and investment to come to Ting, generally bringing their own phones and seem a bit more likely to leave as well."[409]
Net Adds in Ting Mobile. Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that this was "the biggest quarter for new visitors and total traffic to the Web site. This indicates that our brand awareness continues to grow and that we continue to convert well on that awareness. Brand awareness is by far the metric with the greatest upside in this business. Our acquisitions suggest that more people are hearing about us every day and that our message is as compelling and our offering is competitive as ever."[410]

Ting Mobile Added 9,000 Accounts and 14,000 Devices in Q3 2015

Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that "Ting Mobile grew its customer base by another 8% in Q3 adding 9,000 accounts and 14,000 devices. That brings our total at the end of the quarter to 122,000 accounts and 192,000 devices."[411]

Ting's Churn Rate is 2.5%, Average Monthly Customer Spend is $37, Gross Margins Are a Little Above 50%, and Acquisition Costs are Under $100 Per Customer

Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that "the other key metrics on the Ting Mobile business remained strong and our financial contribution continues to improve. Average customer revenue has ticked up a couple of dollars in recent months to about $37 a month, a phone bill of $23 to $24 per device. Gross margins right now are a little higher than the top-end of our range, thus north of 50%. Average cost per acquisition is still comfortably under $100. Even at a churn rate of 2.5%, we’re paying under $100 to acquire customers that are providing great cash-on-cash returns."[412]

Net Adds Have Essentially Stayed the Same Over the Past Few Quarters

Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that "net adds have essentially stayed the same over the past few quarters, but we’re comforted that gross adds continues to grow. Q3 was the biggest quarter for gross adds in the history of Ting. Was also the biggest quarter for new visitors and total traffic to the Web site. This indicates that our brand awareness continues to grow and that we continue to convert well on that awareness. Brand awareness is by far the metric with the greatest upside in this business. Our acquisitions suggest that more people are hearing about us every day and that our message is as compelling and our offering is competitive as ever."[413]

Ting Mobile Expects Net Adds in Future Quarters to Be Steady

In answer to a question from Hubert Mak of Cormark Security about how net adds are looking out over the next three years, Elliot Noss answered in the third quarter earnings report conference call to "ask me next year about two years, but for now we’re pretty comfortable with steady as she goes."[414]

Growing Cancels Are a Product of a Growing Base

Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that "our growing cancels are still mostly just a product of a growing base. We did see a slight uptick in our churn rate in Q3 to just under 2.5%. This appears to be partly the result of a more transient customer base on the GSM service, which makes sense given the increased device portability on that side. These customers typically make less effort and investment to come to Ting, generally bringing their own phones and seem a bit more likely to leave as well."[415]

Ting Mobile Is Still Seeing Some Lagging Issues From Prior Quarters

Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that "we’re perhaps also seeing some lagging followed from our customer service issues of the prior quarters. In fact this shows up on both the acquisition side and the retention side. Customer referrals which have always been the centerpiece of our acquisition efforts have been down since the Sprint change in Q1 and resulted in support shortfalls. I'm relieved to report that we’re once again staffed ahead of our most optimistic projected support volumes and I'm hopeful that this will restore customer referrals and suppress churn a bit in quarters to come.

"The Sprint changes in February took a bite out of our conversion and challenged our reputation. Our customer support team got hit hard, which necessitated months without marketing, comprised our services levels, depressed referrals and provoked churn. It also fundamentally changed some of our customer service ratios, leading to understaffing which exacerbated the problem. We realized that the recovery is not quite a switch from off to on, but a process that takes time and effort to regain the momentum. We are well into that now and I believe our greatest assets are intact. We have a pricing plan that can save the overwhelming majority of Americans hundreds of dollars a year on those telephone bills. We still offer the greatest customer experience and support in the industry as validated by our consistently strong net promoter scores. And in the midst of that adversity and that quite period, we actually added a second network that gives our customers even greater choice of devices and coverage. Plus, we are coming into this holiday season with an opportunity we’ve never had before. We have just entered into partnerships with Krogers, the supermarket giant and Staples the nationwide office supply and technology chain to distribute Ting sim-cards in nearly 2,000 stores across the country. We have no idea how this program will perform or what volume of new customers these deals would contribute to our business. But I am proud to be keeping that sort of company, I am thrilled about what that sort of presence does for our mainstream awareness and credibility and I am confident now that we will discover more opportunities like these in 2016. Interestingly on the Mobile business, neither the problems that I implemented nor the opportunities that I have deemed about which show up in our financial performance anytime soon; first of all, we never stopped growing it what we tend to measures ourselves on is growth in our growth; second, more importantly, we have a large enough base now contributing recurring revenue each month. But the difference between our best and worse projections in net customer adds made very little difference in our 2015 or in our 2016 projected financials. The game we are playing now on Mobile is for results in 2017 and 2018 and of course to generate the cash we need to better capitalize on the fiber opportunities."[416]

Gross Margins Are a Managed Variable

Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that Tucows looks at Gross Margins "as a managed variable. So, the trade off there is always going to be one between price and growth. So, going back to February of ’14 I want to say when our margins drifted up a little bit we dropped our price and when we drop price, we drop it typically just on our rate chart across our whole base. So, if margins were to continue to climb upwards we’ll always be considering whether we want to shave their price. We like that 45%-50% range as a good balance of profitability and growth."[417]

Price Competition Will Probably Not Be As Aggressive in 2016

Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that "based on what we’re seeing on the ground and what we’re kind of interpolating from various CFO comments we think that probably the price competition in 2016 will not be as aggressive as it has been perhaps in the last year or two in Mobile from the incumbents."

"I think it’s not going to be as aggressive downward as it’s been in the past. I think that the move downward is typically been led by Sprint and T-Mobile and each of them have good reasons, both balance sheet and income statements to perhaps to take a pause."[418]

Ting Mobile Has Just Entered Into Marketing Partnerships with Kroger and Staples

Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that "just entered into partnerships with Krogers, the supermarket giant and Staples the nationwide office supply and technology chain to distribute Ting sim-cards in nearly 2,000 stores across the country. We have no idea how this program will perform or what volume of new customers these deals would contribute to our business. But I am proud to be keeping that sort of company, I am thrilled about what that sort of presence does for our mainstream awareness and credibility and I am confident now that we will discover more opportunities like these in 2016."

"We don't know what to expect from this but we know that it's either not going to help much it's going to help a little or it's going to help a lot, but at a minimum it could have increased the brand presence and awareness and we think that that’s a positive. So I think you're going to see sort of things like that, so think of that as a whole different type of initiative and there might be sort of another one or two of those through the course of ’16. And things like that materially change the arch? So when it comes to looking two to three years out to us we’re not stopping trying to be creative or nor do we believe we’re out of opportunities to ramp growth."[419]

GSM Appears to be a More Transient Customer Base

Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that Ting Mobile saw "a slight uptick in our churn rate in Q3 to just under 2.5%. This appears to be partly the result of a more transient customer base on the GSM service, which makes sense given the increased device portability on that side. These customers typically make less effort and investment to come to Ting, generally bringing their own phones and seem a bit more likely to leave as well."[420]

November 5, 2015: Ting Internet is Moving Ahead

Tucows Is Finding that Fiber Is a Business That Plays to Tucows Strengths

In answer to a question from Patrick Russo from Venture Capital about whether in general Ting Internet has met Tucows' expectations, exceeded them or fallen short, Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that "we’re comfortable with demand. It is as complex as we thought it was and it's probably exceeded our expectations a little bit in how it plays to our strengths. We really think that it's a business that we’ll be very natural in being great at."[421]

Adoption in Westminster and Charlottseville Has Been Encouraging

Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that "in both Westminster Maryland and Charlottesville Virginia our first two markets, awareness and consideration of the service are growing every month and adoption so far have been encouraging. In both markets, the greatest limiting factor so far has really been the expansion of the network. In the Westminster, we’re waiting for the town to build out the second phase of the network in 2016 to reach beyond the current 500 or so serviceable addresses. In Charlottesville, where we’re building the network ourselves and currently pass about 4,000 addresses, we tend to wait for the required pool permits and partnerships in order to expand further and we’re only starting in earnest to deal with multiple dwelling units or MDUs in the last few weeks."

"In Westminster there is a really pretty small group of addresses there no more than 500 that we can service and the town is planning the next phase of the build where we really -- that will take it all a lot deeper."

"In Charlottesville things are going really well. We’re continuing to build we now are collecting demand aggregation data for Charlottesville which we hadn’t been doing up until a few weeks ago. We’ve also started to take all of the people that have expressed interest previously and to map those and with a little bit more granularity. Just the operating processes and systems on the ground continue to improve every week. The numbers continue to tick up. So I think it’s doing what we would want it to do."[422]

Ting Internet Hopes to Start Servicing Customers in Holly Springs, NC in Summer 2016

Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that Ting Fiber has "announced the Holly Springs, North Carolina would be our third Ting town. Holly Springs invested in the core fiber network in 2014 and had been seeking a provider to lease that fiber, expand that network and service the entire city. They were disappointed when Google Fiber announced that they were bringing gigabit Internet to Raleigh, Zuru and other nearby cities and we’re delighted that Ting was ready and willing to fill that gap. Surrounded by world-class universities, the thriving research triangle and again other higher profile fiber initiatives, Holly Springs’ businesses and residents are as gigabit ready as any community we've seen. We've begun demand assessment which has gone quite well so far and if all continues this well, we’ll start building out the network in early 2016. We hope to start servicing customers there by this summer."[423]

Ting Internet Is Still Looking at Additional Markets in 2016 in the Range of 25,000 to 100,000 Population Areas

In answer to a question from Patrick Russo from Venture Capital about new markets Ting Internet is getting into for fiber that Ting Internet hasn't announced, Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that "in terms of larger so sort of materially larger we’re viewing that as opportunistic there are opportunities we’re pursuing them. They may or may not come to fruition. So I think larger we’re opportunistic -- that what you’re seeing around these population sizes when I comfortably kind of make a range of 25,000 to 100,000 there it’s likely to be the sweet spot at least through ’16 as we learn. And then as I noted last quarter we are likely to try an experiment in 2016 in a smaller geography. We’d really love to see if we can make it work at an even smaller level because we believe that if we can there is a tonne of opportunity there. And it’s again something we think can play to our strength because we’re pretty nimble and probably more nimble than a lot of the people we might be competing with. So being able to do something like that we think could be very interesting. So we’re probably going to have one experiment and like all experiments it may or may not work."[424]


Comment on January 7, 2017: Nasdaq reported on March 2, 2016 that Ting Fiber has announced plans to bring crazy fast fiber Internet to the Greater Sandpoint, ID area including the towns of Sandpoint, Dover, Ponderay and Kootenai. Comsumers in those towns can pre-order Ting Internet at ting.com/sandpoint as part of the initial “demand assessment” phase. Assuming there is sufficient demand for fiber, network construction would begin later in 2016.

Elliot Noss told analysts during the 2016 first quarter earnings conference call on May 9, 2016 that in March, Ting Internet announced their fourth market for consideration, the Greater Sandpoint, Idaho area, where we would serve the town of Sandpoint and eventually the towns of Dover, Ponderay and Kootenai. "The area has a combined population of around 10,000 residents. Smaller than our first three markets. Indeed, Sandpoint is likely smaller than any town that any commercial provider in the new wave of gigabit internet providers has looked at in the U.S. A number of you have asked me, if it make sense to build a fiber network in a market this size. We look at each market individually and there were a few factors here. First, Sandpoint has reasonable density, over 1,000 people per square mile. Second, Sandpoint has solid connectivity to the greater internet. But Sandpoint has one market condition that none of our other markets have. The best internet connection you can reliably buy in Sandpoint is 12-megabits per second. That is extremely slow. We are told that it is often also unreliable and expensive. Market like Sandpoint is an important experiment, to see whether the increased take-up rate we expect from less competition makes up for some slight operating inefficiencies."[425]

Tucows announced on September 21, 2016 that Ting will be bringing fiber to Centennial, CO, population 107,201 (2014 Census), the largest Ting town by population to date.[426]

External Trends Are Moving in Ting Fiber's Favor

Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that "external trends [that] continue to move in our favor, first customers are increasingly cutting the cord moving away from large traditional television packages to get more of their video entertainment over the top, that is from the Internet."

"Research from MoffettNathanson estimates the pay TV providers lost 566,000 video subscribers in Q2 2015, compared to 321,000 in Q2 2014, and that the number pay TV households is now shrinking at an annual rate of 0.7% compared with 0.1% a year ago. The customers are no longer dependent on bundled TV and Internet packages, they’re free to choose the Internet service that offers the greatest access and customer experience, and that landscape obviously favors Ting. Second, the most popular content providers continue to move towards direct subscription models that make cable TV packages even less necessary. HBO and Showtime have now both taken that step, and ESPN continues to be rumored that it will there soon. Finally, thanks to Google Fiber’s campaign and perhaps broad dissatisfaction with the incumbents, more and more towns all over the country are prioritizing their own fiber initiatives and soliciting providers like us to come service their communities. Holly Springs is a great example of this. Just a year ago, we were aggressively hitting the phones trying to get our foot in the door of municipalities. This year almost all of our pipeline is inbound. As I have said before, I do not expect the returns on Ting Internet to be material in 2016 and I do not intend to provide specific results on subscribers or financials for a while. But I am quite confident that both our internal efforts and these external forces are putting us in a great position to have a strong, profitable, sustainable business for years to come."[427]

Ting Internet Has Invested $700,000 in Property and Equipment

Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that Ting Internet has "invested approximately 700,000 to acquire additional property and equipment almost all of which was increasing our fiber footprint."[428]

Ting Internet Looks at Google Fiber as a Positive, Creating a Halo Effect in Communities Around Google Fiber

Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that Ting Internet "looks at Google Fiber as a net positive. What you see with Holly Springs is as we described. They missed out on Google Fiber and they become hungrier and more eager, they are spurned and I don’t mean Holly Springs in particular but in general communities around Google Fiber cities. It creates a halo, so we would not be surprised if there were other Google Fiber halo towns that we add to the 2016 roster."[429]

Ting Internet Sees a $2,500 CapEx to Hook up a customer and a Yearly Gross Margin of $1,000

In answer to a question from Kaycee Ryan from Lyon Street Capital about how the Ting Internet model is shaping up, Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that "a $2,500 CapEx to hookup a customer of $1,000 in gross margin a year from a customer, and that’s continuing to play out like we see more reinforcements of that data. So that’s feeling pretty good at a high level and I should note that build costs really do vary market-to-market, in Charlottesville we are actually probably doing better than that, but Charlottesville has reasons why it's probably a little bit less expensive to build but then in other ways it is more complicated to build, it is all -- I will keep going back to the head originating but it's the highest level that’s sort of the core of the model."[430]

Ting Internet Is Finding that Gross Margins Are Extremely High and There is Much Greater Stickiness Than in Ting Mobile

Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that "gross margins are extremely high in this business. We do expect lifetime value to be a lot higher. Both because of the gross margin and because there is much greater stickiness it's really with fiber to a house in a market like this you're really going to have to sort of either move or die to be getting rid of the service and of course I'm exaggerating, but we think it's a lot stickier."[431]

Ting Internet Will Have to do Some Aggressive Local Marketing

Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that "in terms of the business model is that the tactic is a much different creature with mobile because we’ll be doing so you think about we’re going to be going into a town the people of Holly Springs have never really heard of us. There sure we have a few phone customers there, but generally our unaided awareness is relatively low and if you think about going in with a business like this you really want to get on the radar, so you have to do some aggressive local marketing that’s a lot more traditional."[432]

November 5, 2015: Domain Services Delivered Another Quarter of Solid Performance

Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that "our Domain Services business delivered another quarter of solid performance in Q3"[433]

Wholesale Registrations Are Up 2% YOY and Margins Are up 10% YOY

Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that in the "wholesale channel, total registrations were up 2% year-over-year. We were thrilled to see our renewal rate of 79% in Q2 hold through the third quarter, while the renewal rate on new gTLDs ticked up a couple of points to 72% from an already impressive level. During the quarter, we added another 46 new generic top level domains which took the total number of TLDs we support including country codes to just over 600. The number of resellers who have registered at least one new gTLD grew to 2,260 as of the end of September, up from 2,100 at the end of June and 1,900 at the end of March. It’s worth noting that the average margin per domain in our wholesale channel in Q3 was up 10% year-over-year, and 25% compared to Q3 two years ago. This is the product of a continuing shift in our sales mix to higher margin registrations. While margin per domain will vary from quarter-to-quarter, the longer term number is trending in the right direction. And in fact Q3 saw its highest level in several years."[434]

International Resellers Are An Important Driver in Wholesale Channel Growth

Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that "international resellers continue to be an important driver of our wholesale channel growth with markets outside of North America and Western Europe once again accounting for a quarter of new registrations. The retail component of our domains business Hover delivered another quarter of strong growth with revenue and gross margin up 17% and 16% year-over-year respectively. Hover’s customer base continued its strong growth as it expanded 13% from a year ago."[435]

Hover Delivered Strong Growth With Revenue and Gross Margin Up 16%

Elliot Noss reported in the third quarter earnings report conference call on November 5, 2015 that the "retail component of our domains business Hover delivered another quarter of strong growth with revenue and gross margin up 17% and 16% year-over-year respectively. Hover’s customer base continued its strong growth as it expanded 13% from a year ago. "[436]

October 22, 2015: CenturyLink Responds to Ting's Gigabit Launch in Holly Springs With Phantom Gigabit Service

Karl Bode reported in DSL Reports on October 22, 2015 that Ting's announcement of gigabit service in Holly Springs has already nudged CenturyLink to begin offering gigabit service of its own in the area. "Just a day after I let Karl know that Ting is launching FTTH service here in Holly Springs NC, I get an email from CenturyLink announcing 1Gpbs service as well," notes DSLReports.com reader Shaun (see his e-mail, left). "Before this, there was zero mention that they were going to upgrade to Gbps. I currently have CenturyLink 100/50 FTTH service." However upon further inquiry CenturyLink reps admitted that the service is a bit over-marketed, and his address can't actually get gigabit service after all. According to DSL Reports CenturyLink had to apologize to Seattle residents earlier this year after the company's marketing for gigabit service wasn't reflective of actual gigabit service availability.[437]

October 20, 2015: Holly Springs is Set to be the Next Ting Internet Town

Ting announced on October 21, 2015 that Holly Springs, NC will be the next town to get symmetrical gigabit (1,000 Mbps download and upload speed) “crazy fast fiber Internet.” Holly Springs will join Charlottesville, VA and Westminster, MD where Ting Internet is already available. Demand assessment will begin in Holly Springs in the last quarter of 2015. That demand will guide construction, which could then begin as soon as the first half of 2016.[438]

Michael Goldstein wrote on the Ting Blog on October 20, 2015 that Ting is grateful for the reception and the partnership they have established with the folks in city hall in Holly Springs, NC (population 24,661) and know that it will be a productive relationship and that citizens of Holly Springs will relish faster Internet and better service. "An important first step in the buildout and delivery of Ting Internet service will be gauging where there is greatest interest." writes Goldstein. "So please take a moment to leave us your contact information here (and even pre-order when that option is available) so that we can potentially count you as raring to go and keep you posted on our progress."[439]

“We’re very happy that Ting chose Holly Springs as the next place to bring crazy fast fiber Internet. In the past 25 years, Holly Springs has grown over 2,600%. Young families with school-aged children are driving that growth. World-class Internet access will help us continue our forward progress and inspire the next generation of great ideas,” said Mayor Dick Sears. “The need for faster, more reliable Internet access across the US has been recognized by the highest levels of government,” said Tucows CEO Elliot Noss. “The problem of slow, expensive and unreliable Internet access is national but agreements like the one reached with Holly Springs further demonstrate that the solution is local.” “While Google Fiber and other providers race to get started in big cities, we’re finding that there’s also a lot of interest from, and opportunity in, smaller cities and towns that might otherwise get passed over,” Noss said.[440]

October 20, 2015: Tucows Offers New Three Day Promotion to Bring ATT Customers to Ting

Marketwatch reported on October 20, 2015 that for three days running through October 22, AT&T customers are invited to check their active phones, one per customer, at ting.com/byod_coffee to see if they are Ting compatible and for each phone checked, whether they prove to be compatible or not, Ting will provide a unique promo code worth $5 at any Starbucks location. "If you can bring your phone to Ting, the calculation gets very simple. You are going to have a better customer experience and you are likely going to spend less," explained Michael Goldstein, Ting VP of Sales and Marketing. "But sometime people need a more immediate incentive to take that first step. Until a better incentive comes along, we're going to stick with coffee."[441]

October 18, 2015: Baltimore Sun Highlights Ting Fiber in Westchester

Scott Dance published a front page story in the Baltimore Sun on October 18, 2015 on fiber initiatives around the Baltimore area highlighting how Westminster is joining a growing number of communities investing in networks capable of carrying a gigabit of data each second, an accomplishment that Baltimore appears eager to follow. "It was clear nobody else was going to do it for us," said Dr. Robert Wack, City Council president for Westminster, which lit up a fiber-optic network it has begun building for its residents and businesses this summer. According to Dance, Westminster's decision to invest in a fiber network was not an easy sell. "It took us a while to get traction because, frankly, we couldn't get people to take it seriously," said Wack, the City Council president. But now, the most frequent question and concern about the gigabit service — which costs residents $89 a month plus a one-time $399 installation fee — is, "Can't you get to my house sooner?" said Valerie Bortz, Westminster manager for Ting, a Canadian company that is leasing the fiber from the city. The city has spent $1.6 million to build the first 7 percent of the network, connecting about 400 homes and businesses. Officials secured a $21 million bond to cover the rest, Wack said, with strong support from city leaders and residents. "At the end of the day, it's just like any other infrastructure project we undertake," Wack said. "I think that's how every municipality and local government should approach this. This is just another type of infrastructure in the 21st century."[442]

October 9, 2015: What are the key factors in choosing a Ting Internet town?


Director of Ting Networks Adam Eisner discusses a few different factors we consider while making plans to expand to new communities and cities.

October 8, 2015: Short Interest Increases in Tucows

Nasdaq's biweekly report on short interest shows that Tucows short interest increased to 718,536 shares on September 15, 2015 from 573,265 one month before, an increase of 25%.[443]

See also: *Nasdaq: Short Interest in Tucows

Settlement Date Short Interest Avg Daily Share Volume Days To Cover
09/15/15 718,536 80,635 8.910969
08/31/15 648,746 150,047 4.323619
08/14/15 573,265 215,356 2.661941
07/31/15 510,134 142,961 3.568344
07/15/15 459,756 132,057 3.481497
06/30/15 283,367 144,477 1.961329
06/15/15 218,845 157,296 1.391294

September 25, 2015: Two Tucows Insiders Sell Shares

Insider Trading Report reported on September 25, 2015 that David John Woroch , EVP Wholesale sold 2,000 shares on September 25, 2015 at $24.21 per share for a total value of $48,414.60.[444] Insider Trading Report reported on September 15, 2015 that Tucows CFO Michael Cooperman sold 30,279 shares on Sep 11, 2015 at $25.06 per share for a total value of $758,782.19.[445]

September 23, 2015: How is Ting balancing the Ting Internet expansion and the customer experience?


Adam Eisner, Director of Ting Networks, explains how Ting is managing staffing levels to ensure all of their customers, whether mobile or Internet, will get the same great Ting experience.

September 8, 2015: Tucows Holds Annual Shareholders Meeting

Tucows filed Form 8-K on September 9, 2015 confirming that they had held their annual shareholders meeting on September 8, 2015. Three matters were addressed at the annual meeting:

  • The Company's shareholders re-elected Allen Karp, Elliot Noss, Erez Gissin, Jeffery Schwartz, Joichi Ito, Rawleigh Ralls, and Robin Chase to serve on the Company's Board of Directors for a term of one year expiring at the 2016 Annual Meeting of Shareholders.
  • Shareholders gave their approval to amend and restate the 2006 Equity Compensation Plan
  • Shareholders voted upon and ratified the appointment of KPMG LLP as the independent auditors of the Company and its subsidiaries for the fiscal year ending December 31, 2015[446]

September 8, 2015: Ting Fiber Announces Roll-Out Plans for Charlottesville

Ting Fiber plans to cover as much ground as possible during 2015 in North Downtown, Belmont, Martha Jefferson and Locust Grove.

The Ting Blog reported on September 8, 2015 that from now until the end of 2015, Ting Fiber plans to cover as much ground as possible in North Downtown, Belmont, Martha Jefferson and Locust Grove. In the coming months, Ting Fiber will be unveiling a tool to help gauge interest in gigabit Internet in other neighborhoods.[447]

August 31, 2015: Michael Goldstein Writes About the Difference Between the Ting Mobile and the Ting Fiber Markets

Michael Goldstein, Executive Vice-President for Marketing at Tucows, wrote on the Ting Blog on August 31, 2015 that some folks have understandably questioned what seems to be a contradiction between Ting's mobile offering and Ting's Internet offering: On Ting Mobile, customers save hundreds of dollars a year because they pay just for what they use while with Ting Fiber customers pay a fixed price for unlimited high speed data.

"We never thought of Ting as the “pay for what you use” company. We think of ourselves as providing services that make sense. We offer what we believe is sorely lacking in a market. We look for situations where people are in some way underserved by the incumbents. Maybe they are underserved because there is a lack of competition. Maybe it’s because there isn’t enough money to be made for larger companies. Maybe it’s because everybody has been solving a problem one way for so long that they had stopped considering others."

"In mobile, the problem we saw was that too many people were just paying too much for service. Carriers had fixed costs and wanted to pile as much revenue as they could on existing networks so they pushed everyone to unnecessarily large amounts of usage at unnecessary prices."

"On fixed Internet for homes and small businesses, the problem we see is that existing networks are inadequate for the amazing things people can do online now and the speed at which people want to do them. These existing networks were never meant to stream video, upload and download huge files to the cloud or host meetings. But the incumbents are generating so much revenue on those existing networks and face so little competition, there really is no incentive for them to invest in anything new."

Goldstein writes that his own life fits with exactly the sort of usage our two services provide. "I use my phone quite tactically, enjoying some streaming music here and there, navigating on Google maps when I need to and checking my email and our real-time website analytics way too often. But I am generally between Internet at home and Internet at the office. I am very willing to do smart little things to keep my cellphone usage down," says Goldstein. "At home, on the other hand, I want to swim in a sea of Sonos, Rdio, Netflix, Skype, iTunes, Dropbox, ESPN3 and other glorious services." Goldstein concludes that the one thing Ting Mobile and Ting Fiber have in common is that they are both solving a problem and are not aiming to please everyone. "Of course, I am also confident that any service we offer at any price brings with it our unique ethic and our unique commitment to fairness, honesty and customer satisfaction. We are desperate to make people happy, which will always be our greatest point of difference."[448]

August 25, 2015: Three Tucows Insiders Sell Shares

Marketbeat reported on August 25, 2015 that Tucows Director Erez Gissin sold 18,750 shares on August 25, 2015 Ar $22.29 for a total value of $417,937.[449] Insider Trading Report reported on August 21, 2015 that Elliot Noss, Chief Executive Officer of Tucows sold 50,000 shares on August 20, 2015 for a total value of $1,247,765.00.[450] Insider Trading Report reported on August 20, 2015 that Tucows Director Joichi Ito sold 6,250 shares on Aug 19, 2015 at $25.52 per share for a total value of $159,533.75.[451]

August 18, 2015: Sprint to Phase Out Two-Year Contracts

CNN reported on August 18, 2015 that Sprint has announced that it will phase out two-year contracts for its customers by the end of the year joining Verizon who abandoned its contract program this week, and T-Mobile who stopped more than two years ago. Sprint customers will either have to pay full price for their smartphones upfront, pay off the phone over the course of two years, or lease their phone from Sprint. The new no-contract plans lets customers comparison-shop more easily as they're no longer locked into a long-term deal.[452]

Abraham Seidmann says at Motley Fool that forcing people to pay for phones upfront could have unintended consequences for the carriers. "In the long run, we do wonder though, since users will have to pay for their phone outright, will providers (Sprint, AT&T, or Verizon) be forced to stop locking their phones so users can move them to other carriers," says Seidmann. "It will be the next logical step after providing for phone numbers portability about 15 years ago." According to Seidmann, no contracts and unlocked phones would be good for consumers, but it creates extreme volatility for the carriers because customers would be able to switch on a whim between providers that their phone is compatible with and there would be nothing stopping them from jumping from deal to deal. Seidmann says the rise of MVNOs is forcing lower monthly prices on an industry that has been able to avoid that for so long. As that is happening consumers are becoming used to the idea that those lower recurring fees come with a catch -- you must pay for your phone upfront.[453]

August 17, 2015: Ting Internet Is Now Available in Westminster, MD

Jesse Simms writes on the Ting Blog that Ting's gigabit fiber is now officially available in Westminster MD. According to Simms, Ting has been busy since the fiber lighting ceremony on June 26, 2015 installing all the necessary equipment to light up the whole network and bring fast fiber Internet all across town. "If you live in the City of Westminster and are looking to get connected, simply run your address at the top of the Ting Westminster page," writes Simms. "If we haven’t yet made it to your home or business, don’t worry, we’re coming. Just hit the “Sign up for updates” button and we’ll keep you in the loop."[454]

August 11, 2015: Short Interest in Tucows up 11% in Last Two Weeks

Nasdaq reported on August 11, 2015 that short interest in Tucows increased from 459,756 shares on July 15, 2015 to 510,134 shares on July 31, 2015, and increase of 11%.[455]

See also: *Nasdaq: Short Interest in Tucows

Settlement Date Short Interest Avg Daily Share Volume Days To Cover
7/31/2015 510,134 142,961 3.568344
7/15/2015 459,756 132,057 3.481497
6/30/2015 283,367 144,477 1.961329
6/15/2015 218,845 157,296 1.391294
5/29/2015 123,846 180,110 1.000000
5/15/2015 17,266 64,995 1.000000
4/30/2015 17,900 24,705 1.000000

August 10, 2015: Why does Ting Internet Installation Cost $400?


Adam Eisner, Director of Networks explains the reasoning behind the Ting Internet installation fee.

August 6, 2015: Tucows Announces Strong Growth in Second Quarter

Chart 1: Stock Price Chart for TCX from January 1, 2012 through August 6, 2015. In February, 2012, Tucows launched Ting, a mobile virtual network operator (MVNO). Ting's launch coincided with a rise in Tucows (TCX) stock price. Tucows' stock price has risen 676% since January 1, 2012. The S&P 500 has risen 62% over the same period. (Click on chart to expand.)
This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.

See also:

Net Revenue Increased 21% YOY

Tucows announced on August 6, 2015 that net revenue for the second quarter of 2015 increased 21% to $42.9 million from $35.6 million for the second quarter of 2014. Adjusted EBITDA for the second quarter of 2015 increased 64% to $5.4 million from $3.3 million for the second quarter of 2014.[456]

Net Profit Increased 77% YOY

Tucows announced on August 6, 2015 that net income for the second quarter of 2015 increased to $2.3 million, or $0.21 per share, compared with $1.3 million, or $0.12 per share, for the second quarter of 2014.[457]

Adjusted EBITDA Increased 64% YOY

Elliot Noss reported in the second quarter earnings report conference call that "adjusted EBITDA of Q2 increasing 64% year-over-year to 5.4 million bringing our total for the year-to-date to 12.3 million."[458]

Tucows Increases Guidance for Adjusted EBITDA from $20 million to $25 million

Elliot Noss reported in the second quarter earnings report conference call that Tucows "had a strong first half and now feel it appropriate to increase guidance for 2015 from $20 million of EBITDA to $25 million of EBITDA. This is a strong performance and one that bodes well for the future. In many ways their current performance reminds of 2012 - 2013 when we were investing in Ting Mobile. We were able to continue to grow the business well investing in and launching a completely new revenue stream in a way that made the investment seem invisible and painless to investors."[459]

Tucows Generated $2.2 million in Cash Flow

Tucows announced on August 6, 2015 that cash and cash equivalents at the end of the second quarter of 2015 were $15.3 million, up from $8.3 million at the end of the fourth quarter of 2014 and $14.2 million at the end of the second quarter of 2014. During the second quarter of 2015, Tucows generated cash flow from operating activities of $2.2 million.[460]

Tucows Invested $1.1 million, Primarily in Ting Fiber

Tucows announced on August 6, 2015 that the company invested $1.1 million to acquire additional property and equipment, primarily investing $0.8 million in expanding Ting Internet’s fiber footprint.[461]

Tucows Repurchased 25,000 Shares in Q2

Tucows announced on August 6, 2015 that the Company used $0.5 million in cash to repurchase 25,413 shares of its common stock under its ongoing share buyback program.[462]

August 6, 2015: Ting Mobile Continues to Grow

Ting Mobile Added 10,000 Accounts and 16,000 Devices in the 2nd Quarter

Elliot Noss reported in the second quarter earnings report conference call that "Ting Mobile saw continued growth in Q2 and a bit of rebound, averaging over 10,000 accounts and 15,000 devices bring our total at the end of the quarter to more than 113,000 accounts and a 178,000 devices" compared to 9,000 additional accounts in Q1.[463]

Ting's Churn Rate is 2.5%, Average Monthly Customer Spend is $35, Gross Margins Are at 50%, and Acquisition Costs are Under $100 Per Customer

Elliot Noss reported in the second quarter earnings report conference call that "the key metrics of the Ting Mobile business remained consistent." According to Noss, churn is about 2.5% of Ting's base each month, customers spend about $35 a month, gross margins are around 50% and cost per acquisition continue at under a $100.[464]

Ting Mobile is Still Recovering from the Sprint FED Issues

Elliot Noss reported in the second quarter earnings report conference call that "we’re still not at levels that we are satisfied with" after the issues with the Sprint FED in the first quarter. "Coming into the second half of this year, we have a great opportunity with Ting Mobile to get additional returns on incremental operational improvement. We have clear consistent requirements and processes now for Sprint devices to come to the service. It is more complicated than it was, [but] at least it is settled. We have a choice of two nationwide networks and we can now accept a far greater of a percentage of owned devices."

"We have a much better handle on the drivers of customer support interactions with the redesign of the business processes and we have a staffing plan to keep us out in front of it. Perhaps most importantly we now have a greater abundance of prospects to convert. In our first three years just about any improvement we made to our offering or our conversion produced relatively small returns while very few people knew who we were."

In answer to a question from Hubert Mak of Cormark Securities Noss added that "hold times are too long [so] the customer service experience is not what we want it to be and we think that impacts conversion and referrals. So we think that’s still a drag and that’s primarily because the changes that we have had to make to both the changes in the Sprint supply chain and new policies with the introduction of GSM have changed our customer service ratios. We had to internalize a lot more of the supply chain and it's just changed the customer service ratios and the amount of customer service we have to put into conversion."[465]

Ting Mobile Has Turned Marketing Back on

Elliot Noss reported in the second quarter earnings report conference call that in Q1 Ting Mobile's customer support team was struggling to keep up with call volume and shut down all marketing and promotional activities until Tucows could get back to the level of service that has defined and propelled the Ting brand. However Noss added that Ting Mobile has now caught up sufficiently to the increased demand brought up by changes in Sprint and that by the end of May "we started marketing the service again and by the beginning of June we’re at full throttle."

"With the Consumer Reports rating in December, the interest in our fiber initiative over the past couple of months, and a growing customer base spreading the word to their friends every day, we appear to have muscled our way into millions of daily discussions of cell phone providers. We see it in our website traffic and our support interactions both of which reached all-time highs in Q2. What that means to us is that we can get significant returns on improvements to our user experience, before, during and after activation. We have a long backlog of screws to be tightened on our website, in our programs that generate leads, and in our sales and support processes and we see those as ways to turn more of this demand into customers."[466]

Ting Mobile Expects to Add 10,000 New Customers in the 3rd Quarter and Quarters Ahead

Elliot Noss reported in the second quarter earnings report conference call that "June was our second largest month of gross adds ever following this past December, it brought us back over the 10,000 net add benchmark that we had slipped below briefly with the events of Q1 and hope to stay above in quarters' ahead."

In answer to a question from Hubert Mak of Cormark Securities Noss added that "right now Q3 probably looks similar to in the range of Q2. Q4 is always a funny one because it's got the Christmas season in it. We’re still dealing with changes in the way we have had to do business that have caused the customer service performance to not be what it was. So yes there was a chunk of Q2 where we weren't marketing and yes we have started to turn it back on but if you gave me a choice between no marketing and customer service where we want it to be or full marketing and customer service performing at a mediocre level I will take the former over the latter. Ting is very, very driven by the customer experience and so we’re pretty heads down around that and so until we see that come clean, we’re not trying to push too hard."[467]

GSM Is Now a Solid Part of Business But Ting Mobile Does Not Plan to Break Out Sprint versus GSM Service

Elliot Noss reported in the second quarter earnings report conference call that Tucows is signing up a lot of people on the GSM side, but "we’re making a conscious decision not to provide break outs between the two services but I'm comfortable saying that GSM is a lot of what people thinking about."

"GSM is now just a solid part of the business. If you go through our purchase path you will see that we really let the choice of the phone that you have in your hand drive which network you’re using for that phone. Over time we may start to see geography figure into some of that as our customers help get smarter in particular markets." Noss added that Tucows is not yet seeing a willingness from either of our partners to let Ting Mobile do some of the things that Google is doing but "we will keep pushing."[468]

August 6, 2015: Ting Fiber is Growing

Ting Fiber Launched in Charlottesville and Costs Are in Line With Assumptions

Elliot Noss reported in the second quarter earnings report conference call that Ting Fiber's costs so far seem to be in-line with assumptions and "we’re increasingly confident that we can scale this service."

"Ting Internet launched in Q2 in Charlottesville, Virginia. We lit up our first beta gigabit customers in May allowing customers to start signing themselves in early June and they are operating at or near capacity ever since. Meanwhile we’re rapidly building up fiber network to cover the entire city and have already reached over 3000 serviceable addresses. In our other launch market Westminster, Maryland where the city is building the network and playing the dual roles of network operator and service provider, we co-hosted a fiber lighting ceremony in late June and expect to start signing up customers in mid-August. We continue to receive praise for our unique public private partnerships there, the National Association of Telecommunications Officers and Advisors or NATOA recently recognized Westminster and Ting as innovative partnership of the year as part of their 2015 community broadband awards. At this stage our focus is on optimizing our processes from network build-out in Charlottesville to scheduling and reforming a high volume of customer installs to tracking and managing customers actual internet usage. We’re also identifying opportunities to improve the user experience and minimize support. All of that is going well."[469]

The Right Way to Look at Ting Fiber is That They Are Nice Small Profitable Businesses

Elliot Noss reported in the second quarter earnings report conference call that the right way to look at Ting Fiber in Charlotesville and Westminster is they are nice profitable small businesses, each in and of themselves. "So if we can pull 1 million, 2 million, 3 million, 4 million in EBITDA a year out of the market we think that’s fantastic and it's fantastic relative to the investments, relative to the effort." The financial models for these businesses look good. The small population markets in Charlottesville and Westminster are in the sweet spot of our population size and each of those markets will be profitable on their own.[470]

Tucows Is Experimenting with Ting Fiber and is Comfortable Looking at Smaller Markets

Elliot Noss reported in the second quarter earnings report conference call that Ting Fiber is "very comfortable looking at smaller markets than Google is." According to Noss, Tucows thinks there are potentially some very interesting opportunities in smaller towns and cities and is testing some core assumptions and experimenting. One of the things Ting Giber wants to do is experiment with how small we can feasibly operate. "If we can take on small bites of profitability that’s just a fantastic opportunity both from a competitive standpoint and from a sort of number of opportunity standpoint."

"One of the things that fundamentally separates us from Google is that we are willing to work with cities in a number of different ways, across a different models and cities like that. They like to be able to be able to consider a public private partnership but I can tell you that the cities that have gotten excited for Google and we have subsequently spoken to they have been well primed and the discussions tend to be a little bit smoother."[471]

Tucows Wants to Grow Ting Fiber in a Measured Way While Limiting Downside Risk

Elliot Noss reported in the second quarter earnings report conference call that by the end of 2016 Ting Fiber could be in up to 7 to 8 fiber markets. According to Noss, Ting Fiber's limiting factor is not finding cities that want to work with us and have us come and build fiber or build fiber themselves and partner with us but our limiting factor is that we want to continue to crawl, walk, and run as we learn how to run this business profitably. "This business is a complicated business so that feels like the right size of ramp and in addition the right amount of capital to deploy as we’re starting to put some bones on what 2016 might look like. We don’t want to go from a current level of capital deployment and just all of a sudden start spending like crazy. We want to do this in a measured way and one of the things we’re very attentive to is downside risk." According to Noss that's something that’s very important to Tucows "because as you know we pride ourselves around capital allocation and return on equity."[472]

August 6, 2015: Domain Business is Steady and In-Line With Expectations

Elliot Noss reported in the second quarter earnings report conference call that the domain services side of the business performance was in-line with expectations solidly in Q2 especially outside of the declining expiring stream business with particularly promising results in email[473]

Hover Shows Strong Growth

Elliot Noss reported in the second quarter earnings report conference call that Hover continues to show "strong growth with increases in both revenue and gross margin of over 18% year-over-year and growth from the customer base of 14%. We launched an exciting new initiative in Q2 called Hover Connect that will enhance the customer experience and has the potential to ultimately drive more customer acquisitions through partnerships. Hover Connect allows our users to easily connect their Hover domains to their favorite web services without DNS modifications, the users simply choose it's which site building service he is using or she is using from a menu of popular choices of Hover and Hover automatically points the domain to the appropriate website. It highlights one of Hover's greatest competitive advantages that we do not attempt to lock users into our own site building or hosting service. It also simplifies the trickiest aspect of the domain name experience, the link to the webhost. In addition to improving the Hover experience we’re hopeful this feature will be appealing to the site building services as they consistently identify connecting with domain registration as perhaps their greatest pain point."[474]

OpenSRS Shows Flat Growth

Elliot Noss reported in the second quarter earnings report conference call that "registration on OpenSRS were up 2% driven by an outstanding renewal rate of 79%, once again our highest renewal rate outdoor [ph]. Perhaps even more impressive that included a 70% of new gTLDs with a large percentage in their first year of renewal. We added 52 more gTLDs in Q2 and by the end of the quarter 2100 resellers had registered at least one new gTLD up from 1900 at the end of Q1 and in addition to the promise of incremental revenue from these resellers this adoption across more services ultimately fosters key relationships and secures the revenue on our core gTLDs. OpenSRS continue to find growth in all corners of the world in Q2, new registrations from outside North America and Western Europe were up 16% year-over-year and represented a new high of 25% of all new registrations in the quarter."[475]

Tucows Has an Opportunity for Growth in email Services

Elliot Noss reported in the second quarter earnings report conference call that there is "some growth coming back to our email business primarily the result of Google no longer supplying Gmail to ISPs. Long time investors will remember that years ago we lost big pieces of business to Google as they got into this market. They have now effectively exited."[476]

July 31, 2015: Ting Fiber Looking at Five or Six New Markets for 2016

Triangle Business Journals reported on July 31, 2015 that Ting Fiber plans to expand its high-speed fiber Internet as Elliot Noss hinted in an interview that North Carolina's Research Triangle could be under consideration for Ting expansion. “I think the safest thing to say is that we are interested, we are in the process of working through our 2016 pipeline,” says Noss. “We’re looking at where we’re going to bring fiber in 2016. We are probably looking at going forward with five or six markets, and North Carolina is one of the leaders in the country in fiber to the home. I think that’s been true since Wilson in the early days, and now Google coming to a couple of markets and AT&T is responding, so there’s certainly a lot happening." Ting is looking to move on its fiber expansion quickly, and a decision on the pipeline for 2016 should happen “in the next few months,” says Noss.

“The first thing we look for when we’re engaging with a city or town is an understanding that this is something they deeply want to do,” says Noss. “We don’t take meetings with cities who want to hear about why they should have fiber or gigabit connectivity.” “North Carolina might be the first state in the union that has moved from where cities and towns are looking at fiber as a way to differentiate and to lead,” adds Noss. “(North Carolina) is seeing it almost defensively: We need it for our survival because we’re surrounded by it.”[477]

July 15, 2015: Where next for Ting Internet?


Director of Ting Networks Adam Eisner responds to a question from Nicholas K, who wonders if Ting is planning on expanding Ting Internet outward from Charlottesville or looking into regions all across the US.

July 15, 2015: Short Interest in Tucows Doubles in Last Thirty Days

Nasdaq reported on July 15, 2015 that short interest in Tucows doubled from 218,845 shares on June 15, 2015 to 459,756 shares on July 15, 2015.[478]

See also: *Nasdaq: Short Interest in Tucows

Settlement Date Short Interest Average Daily Volume Days to Cover
07/15/15 459,756 132,057 3.48
06/30/15 283,367 144,477 1.96
06/15/15 218,845 157,296 1.39
05/29/15 123,846 180,110 1.00
05/15/15 17,266 64,995 1.00
04/30/15 17,900 24,705 1.00
04/15/15 22,660 23,076 1.00
03/31/15 22,813 28,070 1.00
03/13/15 21,644 31,106 1.00
02/27/15 5,555 24,936 1.00
02/13/15 8,584 41,265 1.00
01/30/15 8,777 34,167 1.00
01/15/15 14,421 34,980 1.00
12/31/14 8,903 47,205 1.00
12/15/14 7,602 23,796 1.00
11/28/14 5,877 45,592 1.00
11/14/14 9,055 24,857 1.00
10/31/14 17,927 20,120 1.00
10/15/14 32,537 28,828 1.13
09/30/14 41,433 29,234 1.42
09/15/14 31,630 20,791 1.52
08/29/14 35,647 16,929 2.11

July 23, 2015: Tucows is Hiring in Toronto

YongeStreet reported on July 23, 2015 that Tucows is adding developers to its team. "According to Tucows' job posting, the majority of the position involves the design and development of backend applications. Given that, knowledge of coding languages like PHP, Perl and Python is considered an asset. Check out the company's posting on the Ladies Learning Code job board for more information. The company is also hiring a senior user experience designer."[479]

June 27, 2015: Short Interest Increases on Tucows Stock

The Daily rover reported on June 27, 2015 that short interest in Tucows stock (TCX) on June 15, 2015 is at 218,845 shares, 2.4% of floated shares. This is an increase of 94,999 shares from the short interest on May 29, 2015. With a average daily trading of 157,296 shares, the days to cover are between 1 and 2.[480] According to Investopedia, short interest provides one measure of whether there is weaknesses in a stock price "that the market may not have discounted yet or a company that is simply overvalued."[481] "Short interest gives you a sense of how pessimistic, or "bearish," the market is toward a particular stock's price. Investors who think the price of a stock is going to fall can bet money on their belief, and short interest tells you the extent to which they have done so."[482]

See also: *Nasdaq: Short Interest in Tucows

June 15, 2015: Ting Fiber Network Now Available to Thousands of Charlottesville Homes

Tucows announced on June 15, 2015 that starting last week thousands of Charlottesville, Virginia residents signed up for Gigabit Internet service putting Charlottesville on par with other pioneering US cities with Gigabit Internet service like Chattanooga, Tennessee and Lafayette, Louisiana, along with world-leading cities like Seoul, Stockholm and Tokyo. According to Tucows gigabit service creates a huge competitive advantage for Charlottesville businesses allowing every member of a Charlottesville household to be streaming, gaming, video conferencing and browsing at the same timeand facilitating healthcare and fosters education. Ting's network now reaches about 3,000 homes and businesses, with a plan to cover the neighborhoods of North Downtown, Martha Jefferson, Locust Grove and Belmont in 2015 and the entire City in 2016. The service is available at ting.com/internet for $89/month. "I estimate that fewer than 50 of the nearly 20,000 towns and cities in the country currently have an affordable gig available to a reasonable amount of residents," says Christopher Mitchell, Community Broadband Networks Director, Institute for Local Self-Reliance.

“I am thrilled with how the network and the service are coming along and delighted for the people of Charlottesville, but I am not at all pleased with the timing of this press release,” grumbled Elliot Noss, CEO of Tucows and Ting. “AT&T and Comcast have managed to get press releases out years before their Gigabit services have come to market. Ours comes over a week after launch. We clearly need to pick it up a notch.”[483]

May 29, 2015: Tucows Breaks the MicroCap Barrier

According to Tucows 10-K as of March 6, 2015 the number of shares outstanding of Tucows common stock was 11,081,390. Using this number and the closing prices for TCX, Tucows Market Cap exceeded $300 Million for the first time on May 29, 2015.

Date Closing Price Shares Outstanding Market Cap
May 26, 2015 25.42 11,081,390 281,688,934
May 27, 2015 26.37 11,081,390 292,216,254
May 28, 2015 26.75 11,081,390 296,427,183
May 29, 2015 27.26 11,081,390 302,078,691
June 1, 2015 27.68 11,081,390 306,732,875

The term microcap stock (also micro-cap) refers to the stock of public companies in the United States which have a market capitalization of roughly $50 million to $300 million.[484]

May 7, 2015: Tucows Announces First Quarter Financial Results

On May 7, 2015 Tucows reported strong financial results for the first quarter of 2015. “Continuing our momentum of last year, the first quarter was an excellent start to 2015,” said Elliot Noss, President and Chief Executive Officer, Tucows Inc. “With each quarter, the growth in Ting Mobile is having a greater impact on our financial results as we benefit from the operating leverage in our business. That impact is evident in the continued expansion of our gross margin percentage, which grew to 28%² from 24%² for the same quarter last year, while Adjusted EBITDA more than doubled to $6.9 million positioning us to come in comfortably above our previous guidance of $20 million for the full year. We look forward to continued growth in Ting Mobile alongside solid performance from our domains business as we ramp towards the launch of Ting Internet, our fiber-to-the-home initiative, later this year.”[485]

May 7, 2015: Tucows Announces Growth in Ting Mobile

Ting Mobile is Becoming the Engine for Growth at Tucows

Elliot Noss reported in the first quarter earnings report conference call that it is clear that "Ting Mobile is providing the financial leverage we had hoped and expected. The additional cash generation combined with the consistent contribution of the Domains business, should make for continued strong results."

"With each quarter, the growth in the Ting Mobile business is having a greater impact on our financial results as we benefit from the operating leverage in the business as a whole."[486]

Ting's Average Monthly Customer Spend is $35, Gross Margins Are at 50%, and Acquisition Costs are Under $100 Per Customer

Elliot Noss reported in the first quarter earnings report conference call that "the financial results are as healthy as ever, with customers spending about $35 a month, gross margins at around 50% and cost per customer acquisition under $100."[487]

Ting's Churn Rate is Just Above 2%

Elliot Noss reported in the first quarter earnings report conference call that Ting's churn rate "has dropped to just above 2%, our lowest level since tracking and reporting that metric."

"Most importantly, our customers have stuck by us through a difficult time. Our forums and social media are filled with appreciation for our effort and honesty in addressing the issues, and our customer satisfaction surveys reinforce that approval."[488]

Note: This is a big improvement over previous quarters where the churn rate has been reported as 2.5%.

Ting Added 9,000 Customers and 16,000 Devices in the First Quarter

Elliot Noss reported in the first quarter earnings report conference call that "Ting Mobile added over 9,000 accounts and almost 16,000 devices in Q1, bringing us to 103,000 active accounts and 163,000 active devices."[489]

Growth in Number of Customers Was Disappointing As the Result of a One Time Event

Elliot Noss reported in the first quarter earnings report conference call that "while that represents an impressive 10% growth in our base, it is disappointing, compared to the 10,000 to 12,000 accounts and 16,000 to 18,000 devices, we've added over each of the last several quarters. The good news that it's the result of a single lamentable but addressable event. On February 15th, Sprint changed the criteria for devices that are eligible to activate with Ting Mobile and other Sprint MVNO's. The intent was to deny devices that are tied to an obligation to Sprint. While we were told that the change was coming, neither we nor our customers were given visibility to which devices or how many devices would be rejected until the moment the change went live. When it did, an alarming 70% of devices that people were trying to activate on Ting Mobile were rejected, including many devices that were perfectly eligible by all stated criteria. We worked hard with sprint over the next several weeks to identify errors in the process and correct them, leading to the number of rejections falling to 30%. There are still a couple of outstanding issues and we continue to work with sprint to address them."[490]

Ting Moved Quickly to Address the Problem

Elliot Noss reported in the first quarter earnings report conference call that Tucows "quickly moved to procure both temporary and permanent to address the volume. We quietly launched our GSM service on March 1st to give customers another option to activate devices. Meanwhile, we shut down all marketing and promotional activities until we could give every prospect and customer that reaches out to us the outstanding level of services that has defined the Ting brand as this continues to be how we expect to win long term, both in mobile and fixed internet."

"We had to bring people in to step up around a bit of a crisis and there is both with what we went through with some of the financial eligibility stuff and the launch of GSM, there's been a bit of a change in the sort of in the level of support that's needed and nothing there that long term fusses us, in terms of the cost model. In fact, I'd say, at a sort of all-in costs perspective, I was quite pleased at how we've been able to scale both from an operational perspective and from a cost perspective and that's not to say this wasn't a real bump. There's no question that it was. We've put our customer satisfaction it's the most important thing in the building. We were unhappy with what went on, but I really was quite pleased with the way we were able to come through."[491]

Ting is Getting Back to Acceptable Service Levels and Conversion Rates

Elliot Noss reported in the first quarter earnings report conference call that Tucows is "just getting back to those acceptable service levels and back to acceptable conversion rates on our activation process and we are cautiously just starting to trumpet the Ting Mobile service again, and there was plenty to trumpet about our service and our business. Our GSM offering has made it more appealing, affordable and convenient than ever to give Ting Mobile a try. Customers are popping Ting GSM SIM cards into unlocked iPhone 6s, new mid-range Android devices, like the OnePlus One and every imaginable used market device that they already had or bought in the secondary market. Our net device ads per account in Q1 were the highest we've ever had, as our efforts to core families and businesses appear to be bearing fruit, and our GSM offering makes it easier than ever to bring multiple devices or add more."[492]

Ting Has Not Yet Turned Marketing Back On and the Marketing Team is Chomping at the Bit

Elliot Noss reported in the first quarter earnings report conference call that Ting has not yet turned back on marketing. "We hope that as we turn marketing back on, we'll start to see some pick up there. We don't know what the lag is going to be like and that's one of the things that'll be interesting to learn through this process and we're also and have been working on improving the process around GSM. So, we certainly felt that when we launched it, it was a little sub-optimal. We've been refining it and we think we'll see some pickups going forward, but all of that, so sort of the impact of re-launching the marketing, the impact of reworking around GSM, it'll all be things I'll be able to talk about in a lot more detail next quarter."

"I've got a marketing team that's kind of chomping at the bit right now and, as you can imagine, they've had both refinements on it with the good thing marketing and new ideas to play around with. So, I mean, I'm always encouraging them to conduct intelligent experiments and I don't mind them having those experiments cost money."

"There's some portion of the marketing effort that I would describe as steady state. It's the podcast sponsorships, the YouTube sponsorships, the referral fees, the coupon codes. The stuff we generally do from Facebook, AdWords et cetera and then you're going to have other things we're trying. Now, you can have two very different types of efforts. We could be experimenting with television and then contrast that with experimenting with some channel efforts, one is very cash intensive, the other costs almost nothing. So, they'll have very different profiles. So, it's almost going to depend more on the nature of the experimentation in that quarter."[493]

Ting Is Not Seeing More Aggressive Pricing from Competitors

In answer to a question from Hubert Mak of Cormark Securities, Elliot Noss reported in the first quarter earnings report conference call that Ting is not seeing more agressive pricing from competitors and that the launch of Google's MVNO has actually brought awareness to Ting. "In the quarter, we haven't seen anything new. So, it's as it was. I mean, my reset on that, which I think, I'd spoken some length about last quarter is it's a lot more competitive now than it was a year or two years ago, but we saw nothing change in the quarter, and I'd include in that, is the launch of Google which actually brought some awareness to us and we think it's a very interesting for a couple of reasons primarily around what they've done with multi-home SIMs and global roaming, we think those are just sort of positive impacts on the industry as a whole and we think that, it's a creative offering, but not one that we're much worried about competitively."[494]

Ting Is Not Worried About Google

In answer to a question from Alex Rackwitz of Samphire about what percentage of Ting customers have Nexus 5 and Nexus 6 phones, Elliot Noss reported in the first quarter earnings report conference call that "at its peak, the Nexus 5, was kind of 15%, 17% of our adds. The Nexus 6 is a lot more expensive of a phone. So, we're seeing Nexus 6 way below that. And that was in a run rate basis."

"By the way, if you're looking at sort of -- if you're worried about Google -- Nexus 5 does not currently work with Google. So, I know there's some talk that they could turn it on for the 5, knowing what I think they want to accomplish strategically, I don't know that they'll do that, but in any event, combined, boy those will comfortably be sub-10%. Michael Goldstein who runs acquisition is sitting here. He was guessing 8, I would probably guess, but it's really that more 5%, 6% and that's 5 and 6 combined with the majority of that being 5."[495]

May 7, 2015: Ting Internet Is Just Getting Started

Elliot Noss reported in the first quarter earnings report conference call that "Ting Internet now enters the stage where there is a lot to do and not a lot to report. In Westminster, Maryland the town is building out the fiber network, starting with four core neighbourhoods. In Charlottesville, Virginia where we acquired local internet service provider, Blue Ridge InternetWorks, we have integrated those people into the broader company and are now working together to leverage, upgrade and expand the fiber network there."

"At the same time, we've been developing the Ting Internet service that will provide access to these networks, including an eligibility check to determine whether an address is serviceable and processes for sign-up, installation, activation and monthly billing. Both the product and customer support will be deeply integrated with our mobile service, leveraging the same interfaces, processes and people."

"You're not going to see the Ting Internet business get to even a portfolio level of revenue this year. We're going to keep you apprised because we think obviously long term strategically very important business. So, we want to be thoughtful about the operating metrics we put out and allow you to follow along and home as we always like to do, but in terms of meaningful for this year, I wouldn't think twice about it."[496]

May 7, 2015: Domain Services Continues to Perform Well

Elliot Noss reported in the first quarter earnings report conference call that domain services continues to perform well. "On OpenSRS, domain transactions were flat year-over-year, yet our Domain gross margin grew by over 6%. In fact, our gross margin for Domain here in Q1 was the highest it's been in seven years. The results of a continual shift in mix towards higher margin products including country code TLDs and new generic TLDs. The contribution of this business after expenses is up even more year-over-year, as we continue to be more efficient and effective. We also continue to be more focussed on servicing the unique need for webhosting companies and ISPs all over the world than any of our competition. We added another 32 new gTLDs to our offering in Q1. More than 1,900 resellers have registered at least one new gTLD by the end of the quarter, up from 1,700 at the end of 2014."

"OpenSRS also produced a remarkable renewal rate of 77% in Q1, our highest renewal rate ever. That is well above the 73.5% that Verisign has predicted for all of.Com/.Net in Q1. We hope to get a chance to compare to that of GoDaddy when they report their Q1 earnings next week. This speaks to the inherent quality of our resellers end users. The biggest retail services tend to have a larger segment of customers that never use the domains they register and thus let them go upon expiration. Our domains are more consistently attached to hosting and other Internet services. They're powering businesses and organizations that are built to last."[497]

May 7, 2015: Tucows Repurchased 408,000 shares in Q1

Elliot Noss reported in the first quarter earnings report conference call that Tucows repurchased a total of just over 408,000 shares for a total spend of $7.7 million. "At the time of our last call in mid-February we announced the renewal of our open market stock buyback programs, under which we have the ability to repurchase up to 20 million of our common shares until February 15th of next year. As Mike had noted, we were quite active with the program during the first quarter, repurchasing 214,089 shares for a total of $4.1 million. This is in addition to the approximately 194,000 shares we repurchased under the modified Dutch tender that closed in early January for just under $3.6 million."[498]

May 7, 2015: Tucows Maintains Guidance of $20 Million in Adjusted EBITDA for 2015

Elliot Noss reported in the first quarter earnings report conference call that "we said last quarter that we expected adjusted EBITDA for this year to be in the $20 million. With the first quarter now in the books, it does look like we will be comfortably above that number."

"I wanted to take a moment to provide some clarity around our adjusted EBITDA metric. We have long relationships with a majority of our shareholders and it's been some time since we've provided a definition of adjusted EBITDA. As some of those shareholders have to varying degrees taken some of the profits off the table, we've seen new shareholders come into the stock, who've asked about how this metric is calculated. We have thus included a reconciliation of adjusted EBITDA to net income in the financial statements attached to our news release this quarter. We use this metric because we believe, adjusting for certain non-cash and other items enhances understanding of the performance of the business. The primary measure that we use for planning and budgeting purposes, incentive compensation and to monitor and evaluate our financial and operating results. It's the metric we use when we think about ourselves as owners of the business."[499]

April 23, 2015: Google MVNO Announcement Coincides with Highest Traffic in Months to Ting Site

Michael Goldstein wrote on the Ting Blog on April 23, 2015 that Google's announcement of a new mobile service coincided with the most traffic Ting has had in months to their site. Every web site in the world covered the Google news but "Ting customers commented under half those stories that “Ting did (this or that) first” or “I’m only spending $23 a month” or “The best part about Ting is their customer service," writes Goldstein. "So the opportunity for us just mathematically dwarfs the threat."

Goldstein says that Google's entry into the MVNO space with Sprint and T-Mobile as partners will also benefit Ting because Google will push "our mutual carrier partners to develop all sorts of wholesale capabilities that we will now swoop in and leverage." "In many ways, Google (with their buying clout) offers a great hint of benefits that more providers and end users should soon enjoy. International roaming rates should keep getting lower for all of us. VoIP functions and features (originating with the carriers) should keep getting better."

According to Goldstein, Google has offered a great vision for network agnosticism but you have to buy a $649 phone to use the service while Ting might be the only provider that is absolutely indifferent between networks, operating systems, devices and activities that you perform on your device. "Ting offers complete unimpeded choice. For Ting customers, that often means activating a three-year old smartphone that they bought off their brother-in-law for a song. It also means that when we eventually launch an integrated VoIP solution (with what we need at the carrier level), it will be one that Ting customers can use on absolutely any phone they want. That’s simply our vision and we’re sticking to it."[500]

April 23, 2015: How is Ting Internet coming along?


Michael Goldstein, VP of Marketing at Ting, gives the latest news around our gigabit fiber Internet service.

April 8, 2015: Things Are Getting Back to Normal at Ting After Problems with Sprint's FED

Andrew Moore-Crispin wrote on the Ting Blog that after the problems with Sprint’s financial eligibility date (FED) check that was announced on February 15, 2015, the situation at Ting is coming under control and customer service at Ting is starting to get back to normal.
Sprint’s financial eligibility date (FED) check put a serious crimp in the bring your own device to Ting program and pushed a lot of people to call us to find out what was going on. We pushed the Ting on a GSM network beta release up a little in order to offer some different options. The end result was us breaking our promise of no hold customer service. Marketing went into stealth mode while we sorted things out. We stopped most of the things we do to try to get new customers and instead jumped into the ticket and email queue to lend a hand there. The ship has been righted and it’s just about anchors aweigh. In keeping with the nautical theme, it will soon be steady as she goes.[501]

Financial Eligibility Date Check

"When FED first hit, around 70% of devices that tried to come to Ting were being blocked by Sprint and only 30% made it past the gatekeeper. FED was casting too wide a net and catching devices it shouldn’t. Nexus and iPhone devices purchased directly from Google or Apple without any kind of carrier subsidy, for example," writes Moore-Crispin. "We’ve been working closely with Sprint to narrow FED’s focus and now, the numbers are reversed. 70% of devices that people attempt to activate on Ting pass FED check and 30% fail."[502]

Ting on a GSM Network

"Ting on a GSM network is ready for prime-time," writes Moore-Crispin. "The beta label will be pulled off Ting on a GSM network soon. Ting on a GSM network is now ready for primetime."[503]

Customer Service

"We broke our promise of no hold customer service. If you called us and didn’t get a real person on the line right away, we’re sorry. We take our customer service promises very seriously. We are on the road to recovery," writes Moore-Crispin. "Call volumes spiked to a level higher than we predicted in even our most dire of predictions as a result. Add to that the launch of Ting on a GSM network into open beta (in large part, an attempt to stop people getting rejected by FED from being left in the lurch) and the customer experience team was overrun."[504]

Ting Plans to Soon Begin to Actively Recruit New Users

"We slowed down to fix the issues that lead to this broken promise and to mitigate the risk of it happening again. We stopped any initiatives to get new people in the door until we’re sure we’re meeting this promise once more," writes Moore-Crispin. "Very soon, we’ll be in a position to start turning the tap back on full blast, inviting and welcoming new people to Ting. We’re looking forward to looking forward."[505]

March 20, 2015: How Tucows Went From Sharing Free Software in the 90s to Pioneering Municipal Broadband in the 21st Century

Jordan Pearson reported in Motherboard on March 20, 2015 that Tucows started out sharing free software in the 1993 on its founder's personal website. In 1995, it merged with a Toronto-based internet service provider. Since then, it's risen to prominence as one of the largest domain name registrars in the world, and in 2012 launched a scrappy startup mobile carrier in the US called Ting, which piggybacks on the Sprint network and is lauded by its customers for its transparent, pay-for-what-you-use pricing. Now, Tucows is going head to head with the biggest telecommunication companies in America by bringing Ting-branded gigabit fiber internet to the municipalities that want it. So far, that's amounted to two networks, one in Charlottesville, Virginia, and one Westminster, Maryland. "We were always very much in that service provider space," Tucows CEO Elliot Noss said of the company's long and winding history. "We took a lot of what we did in retail spaces, and we just applied it to mobile. For us, there's real commonality across all of those businesses. And underneath all of it is a deep love and respect for the internet."

Tucows is committed to a free and open internet. Tucows's website declares its support for pro-net neutrality organizations like Fight for the Future. The company has also spoken out against mass surveillance, raised money for digital rights group Electronic Frontier Foundation (EFF), and participated in the EFF's 2014 day of action against mass surveillance. Bunton was an original member of the Toronto-based digital rights think tank Citizen Lab. "Who are the world's most prolific hackers right now? They are a huge array of cybercriminals, and a huge array of state actors; it's like the political spectrum is a circle and it's bent upon itself," said Noss. "The internet is not broken. It is amazingly self-healing, and what it needs, and what we need, is more openness, more transparency, and more honesty, and not more secrecy and more control."

Tucows' focus on internet freedom has gotten it in trouble with US regulators. Tucows landed on the US Trade Representative's annual list of notorious markets due to the company's practice of not responding to takedown requests from companies alleging that Tucows registers domains for sites selling illegal goods. This is despite the fact that a domain name registrar has essentially no say in the content of the websites on its roster. "We get a ton of spurious complaints," said Graeme Bunton, the company's manager of public policy. "So, we take a very careful and considerate approach to every complaint we get, and that doesn't make everyone happy all the time."

Tucows was responsible for a legal first when Renner, a Brazilian retailer, filed an internal ICANN dispute against Tucows for buying the domain name renner.com, along with 30,000 others in a wholesale domain sale. Renner claimed that Tucows had purchased the domain name in bad faith—cybersquatting, basically. Tucows responded by taking the issue to open court in Ontario, a case which resulted in a legal first: the judge decided, for jurisdictional reasons, that domain names are personal property in the province and ruled in Tucows' favour. "When you file a [dispute], you're limited in the amount of evidence you can bring and there's no downside to taking that action," Noss explained. "If you wanted an extremely valuable domain name, and it's worth $200,000 to you, and it costs $5,000 to do a [dispute], then you might as well try your luck. We were trying to take away their lottery ticket to a cheap domain name."

According to Pearson, Tucows talks the talk, and up until now have walked it, too. But if the company becomes the major player it wants to be one day, it's going to be subject to the pressures faced by bigger companies when the feds come knocking for customer information. Will Tucows be able to hold the line? "There seems to be something in the DNA of the company that cares about a free and open internet—that's core to the company, and we will hold to that going forward," said Bunton after sighing and reminding me that it's been a long time since he was at Citizen Lab. "I can't imagine being in a world where we're rolling over." "The only thing I'd add to that is that we always do have to obey laws, and sometimes there are limits," said Noss. "Being creative in the way that you deal with those situations is important and often constrained."

Noss said that in five years, he expects Ting mobile and gigabit fiber internet to be the company's bread and butter, completing the transition from software distributor in the 90s to full-on internet service provider in the 21st century.[506]

March 11, 2015: Tucows Files 10-K for FY2014

See also: * Tucows 10-K Filing for FY2014 March 11, 2015

Tucows Paid $3.6 Million for Their 70% Interest in BRI

"On February 24, 2015, Ting Fiber, Inc., one of our wholly owned subsidiaries, acquired a controlling ownership interest in the newly formed Ting Virginia, LLC and its acquired subsidiaries, Blue Ridge Websoft, LLC (doing business as Blue Ridge InternetWorks), Fiber Roads, LLC and Navigator Network Services, LLC (the BRI Group) for a consideration of approximately $3.6 million. Ting Virginia, LLC is an independent Internet service provider in Charlottesville, Virginia, doing business primarily as Blue Ridge InternetWorks. The BRI Group provides high speed internet access, Internet hosting and network consulting services to over 3,000 customers in central Virginia. We will satisfy the purchase price through an advance under our 2012 DLR Loan facility."

"In January 2015, we borrowed $3.5 million under our Amended Credit Facility in order to fund the acquisition of a controlling ownership in Ting Virginia, LLC. This borrowing is subject to the terms and conditions described in note 8 to the Consolidated Financial Statements."[507]

Tucows Has Repurchased 108,605 Shares Since February 16, 2015 Buyback Program Was Announced

"On February 11, 2015, we announced that our Board of Directors had approved a stock buyback program to repurchase up to $20 million of our common stock in the open market and privately negotiated transactions. Purchases will be made exclusively through the facilities of the NASDAQ Capital Market. The stock buyback program commenced on February 16, 2015 and will terminate on or before February 15, 2016. As of March 6, 2015, we have spent a total of $2.0 million to repurchase 108,605 shares under this stock buyback program, and therefore, the remaining repurchase authorization is $18.0 million. All shares purchased by us under the stock buyback program will be retired and returned to treasury."[508]

Tucows Has $26.2 Million Of Outstanding Foreign Exchange Forward Contracts Which Will Convert To CDN $29.3 Million

"As of December 31, 2014 the Company has $26.2 million of outstanding foreign exchange forward contracts which will convert to CDN $29.3 million. Of these contracts, $22.3 million met the requirements for hedge accounting. As of December 31, 2013 the Company had $26.5 million of outstanding foreign exchange forward contracts which will convert to CDN $27.8 million. Of these contracts, $20.6 million met the requirements for hedge accounting."

"We have performed a sensitivity analysis model for foreign exchange exposure over the year ended December 31, 2014. The analysis used a modeling technique that compares the U.S. dollar equivalent of all expenses incurred in Canadian dollars, at the actual exchange rate, to a hypothetical 10% adverse movement in the foreign currency exchange rates against the U.S. dollar, with all other variables held constant. Foreign currency exchange rates used were based on the market rates in effect during the year ended December 31, 2014. The sensitivity analysis indicated that a hypothetical 10% adverse movement in foreign currency exchange rates would result in a decrease in net income for the year ended December 31, 2014 of approximately $2.4 million. There can be no assurances that the above projected exchange rate decrease will materialize. Fluctuations of exchange rates are beyond our control. We will continue to monitor and assess the risk associated with these exposures and may take additional actions in the future to hedge or mitigate these risks."[509]

Beneficial Ownership of Tucows Stock by Officers and Board Members at Tucows

Tucows Officers and Directors Transaction Type Last Price Elliot Noss (CEO) Michael Cooperman (CFO) David Woroch (EVP, Sales and Support) Allen Karp (Co-Chair Board of Directors) Rawleigh Ralls (Co-Chair Board of Directors) Robin Chase (Director) Erez Gissin (Director) Joichi Ito (Director) Jeffrey Schwartz (Director) Carla Ann Goetz (EVP Human Resources) Kenneth Derrick Schafer (EVP Retail) Michael Goldstein (VP Marketing)
Shares Beneficially Owned per 10-K Filing on March 5, 2015 NA NA 764,833 325,831 173,250 69,375 513,750 4,375 50,000 13,750 60,625 21,275 25 12,913

Salary, Bonus, Stock Owned, and Stock Options of Tucows' Major Officers

Major Officers Salary Bonus Total Shares of Common Stock Owned Exercisable Stock Options Unexercisable Stock Options
Elliot Noss – President and CEO 343,589 182,754 526,343 702,146 62,687 21,563
Michael Cooperman - Chief Financial Officer 269,206 128,121 397,327 260,082 65,749 13,751
David Woroch – Vice President, Sales 224,143 134,834 358,977 110,001 63,249 13,751

March 3, 2015: Sprint's New Financial Eligibility Date (FED) is Frustrating for New Ting Users

Andrew Moore-Crispin reported on the Ting Blog that the Ting support team is overrun due to circumstances outside of their control and there are several things happening all at once that are driving call volumes higher than anyone could have anticipated. Sprint’s new “financial eligibility date” (FED) check is driving the majority of the calls. "We still don’t have all the answers yet and so our project and development teams can’t design around it. As it stands, it’s a real pain point. We know all too well how frustrating it is and we sincerely apologize," writes Moore-Crispin. "The sheer volume of calls coming in is the root cause of us not picking up the phone as quickly as we want to. Our customer service team doesn’t follow a script and instead works on the mandate of helping people find actual solutions to problems. This as compared with the customer support norm of trying to get people off the phone as quickly as possible. That’s an exacerbating factor. To be clear, though, that mandate doesn’t change, even in times of stress like this."

"For the past couple of weeks it has been all hands to the pump. The various other Ting teams are helping the support team whenever we can. We’re jumping in to answer help requests as they come in. We’re not jumping in on the call queue and getting on the phones because we’d probably end up more a hinderance than a help," concludes Moore-Crispin. "This temporary spike in calls is just that, temporary. We just need to dig out from under the pile of calls and emails before we’re back to delivering on our promise of no hold customer service. In the interim, though, we’re very sorry if you get put on hold. This isn’t something we’re about to make a habit of."[510]

February 24, 2015: Ting's GSM Offering Now in Open Beta

The Ting Blog announced on February 24, 2015 that Ting on a GSM network is now in open beta so anyone with a Ting GSM SIM card can activate it, slip it into an unlocked phone and get started with Ting. The biggest things that are missing on GSM at this point are international roaming and international long distance.[511]

February 18, 2015: New Sprint Handset Policy Tangles Up 'Bring Your Own Device' Program

Phil Goldstein reported on Fierce Wireless that some customers are experiencing difficulties in bringing their phones over to Ting and other Sprint MVNOs because of Sprint's new policy that Sprint will block your device from being reactivated until they check if a customer still owes the carrier money.[512] "The bad news is that some devices that previously would have had no trouble coming to Ting are now being blocked from making the move, basically because the owner hasn’t paid his or her final bill… most likely because they haven’t actually received that final bill," writes Andrew Moore-Crispin at Tucows. "We strongly urge our customers not to interrupt their devices’ active state for the time being. There is a chance that only by deactivating your device would you / we learn that it is considered by Sprint to be “financially ineligible,” i.e. is connected in some way to an account that owes Sprint some money. If a device is considered “financially ineligible” by Sprint, they will block any attempt to reactivate it until any outstanding balance is cleared."[513]

February 11, 2015: Tucows Announces Fourth Quarter Financial Results

“The fourth quarter was a solid finish to a strong year for Tucows,” said Elliot Noss, President and Chief Executive Officer, Tucows Inc. “The continuing growth in contribution from Ting Mobile, combined with steady performance of our Domains business, enabled us to deliver net earnings per share of $0.16 for the fourth quarter, bringing EPS for the year to a record $0.57, an increase of 43% over 2013. Importantly, we continue to realize the benefit from the operating leverage in our business as consolidated gross margin for the quarter grew to 26% from 23%, excluding the Portfolio Group, for the same period last year.”[514]

Tucows Beat EBITDA for 2014 with $15 Million

"We finished the year above the top end of our guidance of 14.5 million to 15 million in adjusted EBITDA," said Elliot Noss during the 4th quarter conference call.[515]

Tucows Expects EBITDA to rise in the Range of $20 Million for 2015

"We expect EBITDA to be in the $20 million range which is a fine outcome balancing growth in the business in short-term with creating greater opportunities for growth in the long-term," said Elliot Noss during the 4th quarter conference call.[516]

Tucow Expects Ting to Be Tucows Largest Contributor in 2015

"As we look out to 2015 we expect to see continued strong performance from Ting Mobile which will become the largest contributor to and drive the bulk of growth in adjusted EBITDA," said Elliot Noss during the 4th quarter conference call.[517]

There is Increased Price Competion in the Mobile Sector

"There is this headwind of increased price competition and frankly there is just a headwind of consistent churn on a growing base and then we have the tailwinds around the great customer experience, the strong order and performance in referral program, the scrappy marketing we do, the new opportunities that we uncover every quarter," said Elliot Noss during the 4th quarter conference call.[518]

February 11, 2015: Tucows Announces Growth in Ting

Ting has 94,000 Customers at the End of Q4 Adding 11,000 Net Customers

"We added just over 11,000 accounts and 17,000 devices in Q4, 43% of those in December," said Tucows CEO Elliot Noss. "In 2014 we added 47,000 accounts and 73,000 devices, almost exactly doubling our totals to 94,000 active accounts and 147,000 active devices. Those net ads include churn that remains in the range 2% to 2.5% monthly."[519]

Customers Spend $35 a Month on Their Phone Bills, Gross Margins are 45 to 50%, Acquisition Costs Are Under $100 Per Customer, and Churn is Between 2 and 2.5%

Customers spend about $35 a month on their phone bills, gross margins are still in the range of 45% to 50%, we spend under $100 to acquire a customer, we’re now adding about 18,000 new customers on a gross basis each quarter and continue to churn between 2% and 2.5% of our base each month.[520]

With GSM over 80% of Phones Will be Able to Come to Ting Up From 10% Previously

Elliot Noss said during the fourth quarter confrence call on February 11, 2015 that offering service on a GSM network will have a significant impact on device portability and choice because up until now only about 10% of existing phones could come to Ting. "Until now, only about 10% of existing phones could come to Ting. When we launched the GSM service, over 80% of phones will be able to come to Ting for just $9 investment in Ting’s new SIM card. For those wanting to bring a device of their own this just makes the total savings calculation that much more favorable, for those who wanting to buy a new device it greatly expands the options."[521]

February 11, 2015: Tucows Announces $20 Million Stock Buyback Program

CNN Money reported on February 11, 2015 that Tucows announced that its Board of Directors has approved a stock buyback program to repurchase up to $20 million of its common stock in the open market. The stock buyback program will commence February 16, 2015 and will terminate on or before February 15, 2016. All shares purchased by Tucows under the stock buyback program will be retired and returned to treasury.[522]

February 11, 2015: Ting No Longer Has to Wait for iPhone 6/6 plus on Sprint Network

9to5mac reported on February 11, 2015 that sources say Sprint is dropping a requirement that made the mobile virtual network operators (MVNOs) using its network—such as Ting, FreedomPop, Straight Talk, Boost, and Virgin—wait a certain period of time, usually at least a year, before offering support for the latest devices. For Ting, the moves comes just as it’s about to land support for almost all devices anyway as it makes a deal with T-Mobile to offer support for GSM devices on its network. In the past, Ting required customers to bring a Sprint supported, CDMA device when signing up with its plans, but in the coming weeks the carrier will also support GSM devices through the new deal with T-Mobile.[523]

January 21, 2015: Google to Start an MVNO?

Paul Lily writes at Hot Hardware that according to subscription site The Information and the "three people with knowledge of the plans," Google will soon tap into networks belonging to Sprint and T-Mobile for its new service, buying wholesale access to mobile voice and data in order to make itself a virtual network operator. According to Lily, Google's interested in expanding its business outside of its core to "spur broader industry change." "Google's already doing this with its Google Fiber initiative, and since it's already a major player in mobile, offering cellular service isn't exactly a stretch," writes Lily adding that the project will be known as "Nova," and is reportedly being led by Google's Nick Fox, a longtime executive with the company.[524] According to Mikey Campbell Google first reached out to Sprint over a potential MVNO partnership 18 months ago and employees have already beta tested the service. Campbell adds that the carriers have reportedly taken a wary approach to the proposed deal. Sprint, for example, is said to be inserting contract terms that trigger new negotiations if Google's customer base hits a certain level.[525]

Ting Welcomes Google to the Fray

Andrew Moore-Crispin wrote on the Ting Blog of January 22, 2015 that Ting welcomes Google to the fray. "There are more than enough disenfranchised customers of the major carriers to go around. With three years in the game, we’re available to chat—to hangout, as it were—but it seems only fair that you buy whatever drinks will be had when we do." Moore-Crispin says that Google’s entry into the market will be the first a lot of people will hear about “MVNOs” as an alternative to the majors and just adds more legitimacy and helps to dispel the myth that MVNO customers get second-rate service. "We’ll put odds on our approach of putting customers in control of their devices and ultimately, their bills and of having real, human beings pick up the phone when it rings."[526]

January 21, 2015: Ting Announces Beginning of GSM Rollout

Tucows announced on January 21, 2015 that Ting is on track to launch Ting on a GSM network in late February and is slowly inviting people into the early beta phases. "Our first batch of X1 SIM cards has arrived in Starkville, Mississippi. We’ve been testing Ting service across a wide array of devices since early December."[527]

January 13, 2015: Ting to Be Network Operator of Internet Service to City-Owned Fiber Optic Network in Westminster, Maryland

The Whir reported that Tucows announced on January 13, 2015 that Ting has been selected to be the network operator of the city-owned fiber optic network in Westminster, Maryland that will initially reach around 9,000 homes and 500 businesses. “They believed that superfast Internet could bring and grow businesses, create jobs, increase property values and improve the quality of life for all residents,” said Ting VP of marketing Michael Goldstein. “They also realized that infrastructure that is crucial to the city, and likely will be for the next hundred years, should rightly be owned by the city.” “If a smaller, more customer-focused company player like Ting can pull off a win-win in a community like Charlottesville, it bodes really well for small towns and providers all over the country," said Ting senior content manager Andrew Moore-Crispin. "For the record, we’re confident we can pull off just that, otherwise we wouldn’t start down the path."[528]

January 8, 2015: Tucows Dutch Auction Ends with Purchase of 193,907 shares at $18.50

Tucows announced in a press release on January 8, 2015 that their modified “Dutch auction” tender offer had ended with the purchase 193,907 shares of its common stock at a purchase price of $18.50 per share, for a total cost of $3,587,280, excluding fees and expenses related to the tender offer. The 193,907 shares accepted for purchase in the tender offer represent approximately 1.7% of Tucows’ currently issued and outstanding common stock. Following the payment Tucows will have approximately 11,135,825 shares issued and outstanding.[529]

December 16, 2014: Ting Acquires Majority Stake In Blue Ridge InternetWorks, an Independent Internet Service Provider

Tucows Launches Ting Fiber. In December, 2014 Tucows launched Ting Fiber, a wholly owned subsidiary of Tucows, announcing that Tucows had entered into an agreement to acquire 70% ownership of an independent Internet service provider in Charlottesville, Virginia doing business primarily as Blue Ridge InternetWorks, a company that provides high speed Internet access, Internet hosting and network consulting services to over 3,000 customers in Central Virginia. “The expansion from mobile to fixed access is almost obvious for us,” said Tucows CEO Elliot Noss. “The only customers in the world more starved for great service and fair pricing than mobile phone customers are cable customers." This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.

Tucows issued a press release on December 15, 2014 reported that Ting Fiber, a wholly owned subsidiary of Tucows, has entered into a definitive agreement to acquire 70% ownership of an independent Internet service provider in Charlottesville, Virginia doing business primarily as Blue Ridge InternetWorks, a company that provides high speed Internet access, Internet hosting and network consulting services to over 3,000 customers in Central Virginia. “The expansion from mobile to fixed access is almost obvious for us,” says Tucows CEO Elliot Noss. “The only customers in the world more starved for great service and fair pricing than mobile phone customers are cable customers. They deserve that. But we have an opportunity with BRI in Charlottesville to offer even more than great service at a low price. The step up to gigabit, or ultra high-speed, access is profound.” The founders of the BRI Group will remain with the company. The price and terms of the acquisition were not announced. The acquisition is subject to regulatory approvals and other customary closing conditions and is expected to close during the first quarter of 2015. “For shareholders, this is a rare opportunity," concluded Noss. "In one deal, we get customers, revenue, prospects, infrastructure and a wealth of fiber expertise. We get an inside track on a game changing technology.”[530]

December 15, 2014: eWeek Says Sprint Won't Seek T-Mobile Merger Again

Todd R. Weiss reported on eWeek on December 15, 2014 that Sprint's parent company, Japan's Softbank, is no longer considering a rumored second attempt to acquire T-Mobile U.S., less than four months after the first merger attempt was dropped in August. According to Weiss, following the aborted merger attempt, Sprint shook up its executive ranks by replacing its CEO, Dan Hesse, with Marcelo Claure, the founder and CEO of Brightstar, a subsidiary of Softbank. Then in December, Sprint Chief Financial Officer Joe Euteneuer announced at an investor conference that things have been getting back on track at Sprint with huge progress made in getting the company's wireless network updated. Sprint had been experiencing network problems and customer losses due to service dissatisfaction in the recent past, but the company's network build-out is now "substantially complete" and will help drive a push for more subscribers, Euteneuer said. Sprint has also started some serious attempts to increase its customer base, thanks to a half-price wireless service offer it made recently to existing customers of competitors Verizon Wireless and AT&T if they move their service to Sprint.[531]

December 9, 2014: Fiercewireless Says Ting Will Be Adding T-Mobile Support in February 2015

Phil Goldstein reported at Fiercemobile that Ting Director Scott Allan told FierceWireless that he could not say which GSM carrier Ting is working with due to contractual obligation however, a coverage map Ting provided to FierceWireless mirrors the national coverage footprint of T-Mobile. Customers will be able to bring unlocked GSM phones to Ting and purchase a GSM SIM card to work with the phone. Ting's GSM SIM cards will cost $9 or less, according to Allan. Allan said Ting only began discussing adding a GSM partner within the last six months but that the move fits with what Ting offers to customers. "It aligns with our brand," he said. "We want consumers to have choices. And we want consumers to have freedom. And we want to provide innovative services. GSM really ticks all those boxes for us."[532]

December 9, 2014: Ting Will Support Latest Devices Including iPhone 6 in February 2015

The Ting Blog reported on December 9, 2014 that when Ting on GSM is live in February 2015, there will be no more waiting for the latest iPhone or Android device to be allowed on Ting. If it can be purchased unlocked, or if it can be carrier unlocked, it can come. What’s more, better than 80% of smartphones made in the last couple of years will be compatible with Ting. That will include the unlocked iPhone 6 or iPhone 6 Plus.[533]

December 9, 2014: Ting to Add Service on a GSM Network

Tucows announced on December 9, 2014 that Ting has an agreement with a major US network provider to offer service on a GSM network that is slated to go live in February 2015 and will operate in concert with the existing CDMA service. Once live, CDMA and GSM devices can coexist under a single Ting account, sharing a single pool of minutes, messages and megabytes of data. “This is an industry first,” said Elliot Noss, CEO of Tucows and Ting. “Our goal has always been a mobile market where customers and their devices can move between carriers as they see fit. We think the power balance in the mobile industry is all off. Customers, not service providers, should hold the cards.”[534]

December 8, 2014: Tucows Announces Dutch Auction Tender Offer

Tucows announced on December 8, 2014 that that it is commencing its "modified Dutch auction Tender Offer" (the "Tender Offer") to repurchase a number of its common stock not to exceed an aggregate purchase price of $8.0 million. Under the Tender Offer, shareholders will have the opportunity to tender some or all of their shares at a price within the range of $16.50 to $18.50 per share. Assuming that the offer is fully subscribed, if the Purchase Price is determined to be $16.50 per share, the minimum Purchase Price under the Tender Offer, the approximate number of shares that will be purchased under the offer is 484,848. Assuming that the Tender Offer is fully subscribed, if the Purchase Price is determined to be $18.50 per share, the maximum Purchase Price under the offer, the approximate number of shares that will be purchased under the offer is 432,432. Shareholders whose shares are purchased in the offer will be paid the determined purchase price per share net in cash, without interest, after the expiration of the offer period at 5:00 P.M., New York City Time, on Wednesday, January 7, 2015. [535]

December 7, 2014: Brian Nichols writes: Is 2015 Make or Break for Sprint?

Brian Nichols writes in an opinion piece in Seeking Alpha that Sprint has consistently lost customers for several years because of the poor quality the Sprint Network which recently was rated worst of the big four large telecoms by a survey in Consumer Reports. Sprint has recently announced an aggressive price cuttting plan, vowing to cut AT&T and Verizon customers' bills in half, in exchange for their business in the hope that aggressive pricing will lead to renewed interest in the carrier's services.

"The problem is that Sprint has lost 336,000 and 181,000 post-paid subscribers in its last two quarters, respectively," writes Nichols. "Not to mention, Sprint was recently voted the worst carrier in the U.S. by Consumer Reports. This means Sprint has to overcome quite a bit of negative consumer sentiment in its attempt to grow its subscriber base larger." According to Nichols if Sprint fails to attract new customers with its price cutting plan, it's tough to find a scenario where Sprint comes out on top. "As a result, I think a share price below $3 by the end of next year is very possible, and that a long-term price target of $0 is not out of the question. Needless to say, I would not invest in Sprint at any price, as I see no value based on the most likely of scenarios."[536]

November 20, 2014: Consumer Reports Rates Ting Highest Among Wireless Providers

Consumer Reports Rates Ting Highest Among Wireless Providers. In Consumer Reports' annual cell-phone service comparison in November 2014, Ting came out on top as the best mobile wireless provider with a company rating of 91 out of 100 because of their excellent service and customer support. According to Glenn Derene, the Electronics Editor for Consumer Reports, “Smaller providers like Ting, Consumer Cellular, and Republic have excellent satisfaction ratings because they’re designing innovative strategies to keep plan costs down for their customers and simplify their service options.”. This web site is not affiliated in any way with Tucows. This web site is operated by a private investor who who owns stock in Tucows and is interested in following the company. Nothing in this report is to be taken as a recommendation to buy or to sell stock in Tucows.

Justin Diaz reported at Android Headlines on November 20, 2014 that as part of Consumer Reports annual cell-phone service comparison Ting came out on top as the best mobile wireless provider with a company rating of 91 out of 100 because of their excellent service and customer support. According to Glenn Derene, the Electronics Editor for Consumer Reports, “Smaller providers like Ting, Consumer Cellular, and Republic have excellent satisfaction ratings because they’re designing innovative strategies to keep plan costs down for their customers and simplify their service options.”[537]

“If you haven’t heard of the company before, there’s a reason for that: The service’s parent company, Tucows, is a domain name registrar and has made a business decision to not spend a lot on Ting-related advertising, instead choosing to offer lower-priced services. Considering they received the top spot on value, it appears they are performing well here."[538]

November 20, 2014: Consumer Reports Rates Sprint as Worst Mobile Network

Brian Nichols reported at Motely Fool on December 1, 2014 that according to Consumer Reports. Sprint is the nation's worst cell phone service provider. Consumer Reports surveyed approximately 63,352 people across 26 major metropolitan areas. It found that Sprint received "dismal" marks in value, voice, text messaging, and 4G reliability. "That said, there are a few areas where Sprint's results may have been altered by consumer perception, rather than reality. For example, Sprint's wireless service plans are mostly all cheaper than the equivalent plans from AT&T and Verizon. So Sprint's "dismal" value ranking is a bit odd," writes Nichols. "Not to mention, Ting, a small carrier that ranked number one nationally in the survey actually uses Sprint's network. Ting is a mobile virtual network operator, further supporting the notion that consumer perception may be driving the results in this study."[539][540]

Consumer Reports reached out to several of the carriers in their survey for comment. Elliot Noss, CEO of Ting, was ecstatic. "What we do is actually sort of obvious," he said. "We offer fair, honest pricing that doesn't penalize customers for using too much or too little. Our customers seem to appreciate it and we certainly appreciate this recognition from them."[541]

According to Consumer Reports, Ting has perhaps the simplest plan of all—you pay a monthly fee for each device on the plan, then you are billed at the end of the month for the voice minutes and data that you use. The less you use, the less you pay. Both carriers scored high in our Ratings.[542]

November 12, 2014: Tucows Announces Third Quarter Results

"In the third quarter we again saw the growing contribution from Ting in our financial results as our Domain Services businesses continued to deliver consistent, reliable performance," said Elliot Noss, President and Chief Executive Officer, Tucows Inc. "We achieved net earnings of $0.24 per share, bringing net earnings for the year-to-date to $0.40 per share, surpassing our total for the entire 2013 year. Consolidated gross margin increased to 26% from 21% a year earlier, excluding the Portfolio group, which benefited from atypical contributions in both quarters."[543]

Ting has 82,000 Customers at the End of Q3 and Added 11,000 New Customers This Quarter

"I want to note, that while we added 11,000 accounts in Q3 we are now counting our total of active accounts at just over 82,000, which is only 9,000 more than the 73,000 we reported last quarter," said Tucows CEO Eliot Noss. "This is the result of a one-time change in how we measure active accounts."[544]

"Ting continued its strong customer growth in the third quarter. We had a roughly 11,000 accounts and 17,000 devices, that represents a 15% increase in our customer base in the quarter, healthy growth for just about any business. But for Ting, it is in fact a bit of a slowdown," said Tucows CEO Eliot Noss. "Absolute net adds were slightly below both Q2 of this year and Q3 of last year. This is partly above the success of the iPhone 6 and 6 Plus launches during the quarter, devices we do not yet support on Ting. It is also partly about the climbing perception of the Sprint network relative to other major networks. And it also appears to be about aggressive new price promotions for major carriers to retain and acquire customers. Looking ahead, we believe each of these areas, device, network and price bring more opportunities for Ting growth than threats."[545]

Ting Has 130,000 Devices at the End of Q3 and Added 17,000 New Devices This Quarter

"As I last quarter I will quickly summarize the Ting business for easy modeling. We finished the quarter at 82,000 customers with 130,000 devices," said Tucows CEO Eliot Noss. "Customers are spending about $35 a month on their phone bills. Growth margins are 45% to 50%. We spent under $100 to acquire a customer. We are adding about 16,000 new customers on growth basis each quarter and continue to churn about 2.5% of our base each month."[546]

"Ting continued its strong customer growth in the third quarter. We had a roughly 11,000 accounts and 17,000 devices, that represents a 15% increase in our customer base in the quarter, healthy growth for just about any business. But for Ting, it is in fact a bit of a slowdown," said Tucows CEO Eliot Noss. "Absolute net adds were slightly below both Q2 of this year and Q3 of last year. This is partly above the success of the iPhone 6 and 6 Plus launches during the quarter, devices we do not yet support on Ting. It is also partly about the climbing perception of the Sprint network relative to other major networks. And it also appears to be about aggressive new price promotions for major carriers to retain and acquire customers. Looking ahead, we believe each of these areas, device, network and price bring more opportunities for Ting growth than threats."[547]

Customers Are Spending About $35 a Month on Their Phone Bills

"Customers are spending about $35 a month on their phone bills," said Tucows CEO Eliot Noss.[548]

Gross Margins are 45% to 50%

Gross margins are 45% to 50%," said Tucows CEO Eliot Noss.[549]

Customer Acquisition Costs are under $100

We spent under $100 to acquire a customer.

Ting Expects to Add 16,000 New Customer Per Quarter

We are adding about 16,000 new customers on growth basis each quarter and continue to churn between 2.0 and 2.5% of our base each month.

Average Ting Customer Saves $60 per Month

"A recent audit of the Ting base revealed that our average customer has saved $37.57 per device a month since switching, that’s an average of nearly $60 per account," said Tucows CEO Eliot Noss. "Meanwhile McKinsey just completed an annual survey, revealing that for the second year in a row price is the number one consideration for customers changing mobile providers and the percentage for whom that is true has grown considerably."[550]

Ting is No Longer Appealing to Just Early Adapters

"For the past couple of years, we’ve been fighting for our share of a small population of early adopters that are just satisfied and venturous enough to look beyond the major carriers for savings," said Tucows CEO Eliot Noss. "We believe the most important trend over the next year, will be more and more people joining that population recognizing that they can be paying less, looking beyond the four major carriers and discovering services like ours."[551]

Survey Shows Price Is The Number One Consideration For Customers Changing Mobile Providers

Meanwhile McKinsey just completed an annual survey, revealing that for the second year in a row price is the number one consideration for customers changing mobile providers and the percentage for whom that is true has grown considerably," said Tucows CEO Eliot Noss. "That means price ranks above network coverage or device choice. And we know that last year was the first time that that was true in this McKinsey study.[552]

Ting Made a One Time Accounting Change in How Tucows Measures Active Accounts

"This is the result of a one-time change in how we measure active accounts," said Tucows CEO Eliot Noss. "Specifically we have now removed all accounts going back throughout our history that we proactively suspended for nonpayment.[553]

Tucows Will Go into 2015 Unhedged Against the US Dollar Which Could Add $1 to 1.5 Million Yearly EBITDA

"With the movement in the Canadian dollar over the past six or so months, I wanted to take this opportunity to provide an update on our hedging program. As a reminder, we generate revenue in U.S. dollars, but the majority of our operating expenses are in Canadian dollars and therefore, we engage in foreign exchange hedging to provide certainty around future costs. The appreciation of the Canadian dollar has been a bit of a headwind really over the last decade or so, as our expenses were that much higher relative to our revenues. You see that reflective in our 2014 numbers and our guidance. However, with the recent weakening of the Canadian dollar, we now have a bit of a tailwind. We have typically hedged out 18 months or so, but are now only hedged through the end of 2014. Thus, if the foreign exchange rate stays more or less in its current range, EBITDA could benefit by as much as $1 million to $1.5 million in 2015 relative to this year.[554]

November 12, 2014: Tucows Announces Intention to Commence Dutch Auction Tender Offer

Tucows announced on November 12, 2014 that it expects to commence within 30 days of this announcement a "modified Dutch auction" tender offer to repurchase a number of shares of its common stock not to exceed an aggregate purchase price of $8.0 million. Tucows will select the lowest single per-share purchase price that will allow it to buy up to $8.0 million of its outstanding common stock at completion of the Tender Offer. The specified range is yet to be determined but is expected to be in the range of $16.00 to $18.00 per share. [555]

August 12, 2014: Tucows Announces Second Quarter Results

Ting Added 12,000 Accounts and 18,000 Devices

"Q2 was another solid quarter of customer growth for Ting," said Tucows President Elliot Noss. "On our last call, we projected that Q2 net adds would land somewhere between those of Q3 and Q4 of last year, or between 11,000 and 12,000 accounts. We ended up matching Q4, adding just over 12,000 accounts and 18,000 devices. That represents a 20% growth in our customer base in total, bringing our totals to over 73,000 accounts and 112,000 devices."[556]

Ting Now Has 73,000 Accounts and 112,000 Devices

This has brought "our totals to over 73,000 accounts and 112,000 device" said Noss.[557]

Churn Rate Was Between 2 and 2.5 Percent

"Churn for Q2, and in fact pretty consistently for the past year, was in the 2% to 2.5% range per month," said Tucows President Elliot Noss. "We provide this number for two main reasons. First, this is the number one data request from investors as they build out their financial models. We always try and provide as much transparency as possible in order to allow investors to track the business."[558]

Customers are Spending $35 Per Month on Their Phone Bill

"Customers are spending about $35 a month on their phone bills," said Tucows President Elliot Noss. "Gross margins are 45% to 50%. We spend under $100 to acquire a customer. We’ve added 15,000, 16,000 new customers on a gross basis each of the last three quarters and have churned between 2% and 2.5% of our base."[559]

Cost to Acquire a Customer if $100

We spend under $100 to acquire a customer," said Tucows President Elliot Noss.[560]

Gross Margins Are 45 to 50 Per Cent

Gross margins are 45% to 50%," said Tucows President Elliot Noss.[561]

Ting is the Primary Driver on Gross Margins

"Yes, but I think that the primary driver on gross margins will continue to be Ting’s percentage of the business," said Tucows President Elliot Noss. "So Ting is growing so much faster than the domain side of the business and has appreciably better margins. So that will be the primary impact. You’ll see margin continue to pick up, but slowly and on a decreasing percentage of the total business."[562]

May 14, 2014: Tucows Announces First Quarter Results

Ting Had 61,000 Accounts and 94,000 Devices at the End of the Quarter

"Q1 was another record quarter for customer loyalty," said Tucows President Elliot Noss. "We added nearly 13,000 in accounts net and more than 20,000 devices, bringing our totals to more than 61,000 accounts and 94,000 devices at the end of March."[563]

Ting Added 13,000 Accounts and 20,000 Devices

"Q1 was another record quarter for customer loyalty," said Tucows President Elliot Noss. "We added nearly 13,000 in accounts net and more than 20,000 devices, bringing our totals to more than 61,000 accounts and 94,000 devices at the end of March."[564]

Ting's Gross Margin is Between 45 and 50%

Importantly, even after lowering our data pricing in February, our gross margin percentage remained in our targeted 45% to 50% range," said Tucows CEO Elliot Noss.[565]

Churn Rate Was Not Given

"One, I'll be a lot more comfortable putting out a churn number when the Sprint network hopefully settled down in terms of having an impact over the next couple of quarters. I listened to their calls with great interest and I am looking forward to the call where they say, our network's no longer having an impact on churn because when impacts them, it impacts us," said Tucows CEO Elliot Noss.[566]

May 6, 2014: What does Ting hope to accomplish in the next five years?


Director of Ting Networks Adam Eisner discusses what Ting would like to do in the next five years. "We changed things a lot for people using mobile carriers who aren't even with our service."

February 12, 2014: Tucows Announces Fourth Quarter Results

Ting Had 48,000 accounts and 74,000 devices at the End of the Quarter

Moving to Ting metrics, Q4 was another outstanding quarter. We added more than 12,000 accounts and more than 18,000 devices beating Q3’s record numbers and bringing our totals to 48,000 accounts and 74,000 devices at the end of December.[567]

Ting Added 12,000 accounts and 18,000 devices During the Quarter

Moving to Ting metrics, Q4 was another outstanding quarter. We added more than 12,000 accounts and more than 18,000 devices beating Q3’s record numbers and bringing our totals to 48,000 accounts and 74,000 devices at the end of December.[568]

Gross Margin and Churn Not Given for This Quarter

Importantly gross margin percentage, annual customer contribution and customer acquisition costs continue to be right where we would like them. Last quarter I talked about our rate of growth leveling off subsequent for the launch of iPhone 5C and 5S and iOS 7.[569]

Ting Towns Get Fiber

Ting Fiber Households by Community. This graph shows the number of households in each of the five 'Ting Towns' plotted against the earliest date that Tucows announced their contact with the community. Graph: Hugh Pickens

This section shows the chronology of Ting Fiber deployment in the cities Tucows has contracted with to provide FTTH services.

Other sections of this report on Tucows include:

December 2014: Chronology of Ting Fiber Rollout in Charlottesville (17,778 households)

Following is the chronology of Ting Fiber rollout in Charlottesville from the initial acquisition of Blue Ridge Interent in December 2014:

January 2015: Chronology of Ting Fiber Rollout in Westminster (7,161 households)

Following is the chronology of Ting Fiber rollout in Westminster from the initial acquisition of contract to be network operator in January 2015:

October 2015: Chronology of Ting Fiber Rollout in Holly Springs (8,147 households)

Following is the chronology of Ting Fiber rollout in Holly Springs from the initial announcement in October, 2015 to the first live customer in January 2017: