Clarification on RingPlus: Likely a pyramid scheme. Enjoy it while it lasts

May 1, 2016

by — Posted in Great Deals

So while the new RingPlus plans offering ridiculously good free monthly allowances of up to 4000 minutes, 4000 texts, and 4000 MB of 4G LTE data each month have been wonderful on paper, they also, I believe, paradoxically indicate serious problems with RingPlus’ business model.

Just last year, the largest plans RingPlus did were on the scale of 1-1.5 GB of data. And those were huge deals. And in just a few months, they’ve skyrocketed to 4 GB of 4G LTE data free every month.

That’s a meteoric rise in data allowance, and something that can’t possibly be sustainable. T-Mobile, for instance, offers unlimited text and data (4000 minutes and 4000 texts is effectively unlimited for 95%+ of people…who talks 2+ hours every day?) and 2GB of data for a whopping total of $50…every month:

RingPlus, by contrast, offers twice the amount of data for a one time fee of $29. And that fee isn’t even a payment for anything – it’s literally a deposit of credit into your account, which you can then use to buy even more data or minutes or anything else you might need. (e.g. if you’re a texting demon, you can buy an extra 6000 texts for $5/mo…and you can do that for free for 5 months, making this an effective 4000 minute/10000 text/4000 MB data plan for 5 months for $29, since you have to pay absolutely nothing extra for that extra 6000 texts every month while you still have credit on your account.

Hell, RingPlus even offers a paid 4GB plan for $40/mo regularly on top of this special ‘promo’ pricing. That’s the regular price they could sustainably sell service for if they weren’t being batshit crazy.

So yeah. I see no way that this is in any world a feasible business model.

And so that being the case, the very fact that they have to offer such incredible mind-bogglingly good deals is indicative of the dire straits they’re in. Their customer growth is drying up, and the only way they can afford to keep paying the bills for all of their existing free users is to acquire new customers. And since they can’t do that offering the same thing as before, they have to continuously keep one-upping the ante.

Right now, the ante is pretty insanely one-upped. If they keep going forward, eventually they’re going to collapse under the weight of not being able to fulfill all their prior obligations. The second they can’t sign up enough new customers, they’ll crater and shit will hit the fan.

And so, for us, the RingPlus customers, we have a delicate balancing act to play. Sign up too early, and be stuck with a less than sufficient amount of data and allowance – I signed up for my first few plans when it was ~1500/1500/1500, and that wasn’t quite enough data make the service my primary plan. But sign up too late, and while you’ll get an amazing plan with amazing allowances, RingPlus will also probably go out of business shortly thereafter.

So sign up somewhere right in the middle, which I think right now might be, and get amazing RingPlus service for a very healthy amount of time, for very little money, and more than enough data and minutes/texts to make the phone your primary plan. Just make sure you keep a backup option for when RingPlus does inevitably go out of business!

I don’t expect RingPlus to go immediately out of business, and likely not before I recoup some serious value from them on these phone plans they’ve given me, but I would also be surprised if they last the year. So keep that in mind before you go all-in with them.

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