Fast-Growing Startup Looks to Speed Up

A Costa Mesa-based startup is rolling out two brands to complement its booming international calling card business.

Ultra Mobile plans to launch a nationwide plan next month that’s geared more for domestic coverage, a largely untapped segment for the telecom, which is among the fastest growing companies in the U.S.

“Ultra is focused on international, and this will be more mainstream,” co-founder David Glickman explained after a tour of the company’s new 30,000-square-foot headquarters near South Coast Plaza. “We will probably allow international calling, but we won’t promote that we have it.”

International callers, data and text users account for about 85% of Ultra Mobile’s SIM—or subscriber identification module—card customers. The segment—comprised largely of immigrant populations who live in urban centers in the U.S. and want to keep in touch with family and others in their countries of origin—has fueled explosive growth since the company started in October 2012.

Ultra Mobile was cash-flow positive in its first year.

Revenue topped $100 million in its second year.

Last year it zoomed to the top of the list of the 5,000 fastest growing private companies in the U.S., according to Inc. Magazine. It finished 2015 with more than $150 million in revenue and will probably be close to $200 million this year, according to Glickman.

“We are all about growth and all about volume,” he said.

Univision Mobile

The plan to make a push in the mainstream market doesn’t mean Ultra Mobile is backing away from its bread-and-butter business. Its recent buy of New York-based Univision Mobile—which had been a unit of Spanish-language TV network operator Univision Communications Inc.—adds a growing customer base in the U.S.

“There are 40-plus million people that are living in America who aren’t born in America,” Glickman said. “We’d be happy getting a very large percentage of that.”

Ultra Mobile annually sells more than 1 million SIM cards, which are needed to activate service and can be transferred between mobile devices.

“We’re hoping to double that with the acquisition of Univision,” said Glickman.

The cards are available in more than 7,000 independent wireless stores and more than 25,000 retail stores, including Target, 7-Eleven and CVS. Customers can recharge plans at more than 60,000 outlets. No-contract, prepaid plans start at $19.

Ultra Mobile just renewed a multiyear agreement with T-Mobile USA Inc. to lease its network. The mobile virtual network operator chose the Bellevue, Wash.-based wireless carrier because it was a GSM (Global System for Mobiles) provider with a strong 4G data network in metropolitan areas. GSM providers, such as T-Mobile and AT&T, allow users to easily swap phones with a removable SIM card.

Primo

Ultra Mobile this year plans to launch a Web-based peer-to-peer brand called Primo that will allow users to call some 4 billion numbers at no cost.

“It’s like Skype, only it’s free,” Glickman said.

Primo is in beta testing, and plans call for it to be offered to both international and domestic customers. The service, which is available for iOS and Android users, is powered by the Internet through a Wi-Fi or broadband connection. A SIM card is not needed, as the company will supply dedicated phone numbers to customers in an effort to build its network of users and push the idea of eventually replacing the phone number with more of a name directory as the primary link to communication, a la Facebook, Instagram and other social networks favored by millennials and increasingly by older customers.

“I actually think that phone numbers will disappear entirely,” Glickman said. “You’re connecting with directories more than you’re connecting with phone numbers. I think that a kid born today won’t even know what his phone number is.”

Hip HQ

Ultra Mobile invested more than $1 million to renovate its new headquarters, which houses about 80 of its 130 companywide employees. The property, a former IBM server facility, underwent a yearlong renovation of new features, including LED lights, raising the ceiling, and adding multipurpose rooms outfitted with kegerators, video game consoles, treadmills and table tennis.

Employees can play remote control car soccer on a giant billiards table or use the same soccer balls in a game of pool.

“We have a pretty social office, but it’s more organic now,” said Kristin Williams, Ultra Mobile’s director of enterprise services group. “It’s really helped team building.”

The company’s modern kitchen provides two catered meals every week and offers employees a free salad bar, yogurt, cereal, hard-boiled eggs and other healthier items. Sugary snacks can be purchased for a quarter from the vending machine. A big dining room and activity space will be near four electric charging stations that are free for the 80 or so workers there.

It’s not uncommon for employees to show off their new digs to friends and family, particularly on Monday nights after a frenzied start to the work week.

“It just shows the effect we put into this place is working out,” said marketing vice president Ryan Gonzales. “It’s huge for recruiting.”

Indeed, Glickman is crafting a culture in the mold of Silicon Valley’s fertile startup scene. The marketing guru is on his fourth venture.

His first hit was Justice Technology, established in 1993 in Buenos Aires. Glickman at the time was working at the Argentine office of American Express as a management trainee hired to reduce overhead.  

“While I was there I discovered it was very expensive to call from Argentina to the U.S. but very cheap to call from the U.S. to Argentina,” he said. “I figured out a way to export a U.S. dial tone from the U.S. to Argentina and save everybody a ton of money.”

That became the basis for Justice Technology, which was No. 1 on Inc.’s list in 1998, and eventually grew to more than 100 offices.

Glickman also is the former chief executive of Los Angeles-based TelePacific Communications, which has raised $225 million from investors and grown annual sales past $500 million since its start in 1998.

In 2001 Glickman and his partners launched Freeconference.com, an online conferencing service that was eventually sold to Bethesda, Md.-based private equity firm American Capital Strategies.

The Los Angeles resident is happy to run the business in OC and has no plans to shorten his commute to work.

“We’ve grown three times in Orange County, and if we were to double or triple again, we would stay,” Glickman said. “We launched here and stayed here because of the infrastructure of innovative wireless companies and prepaid companies.”