Breaking News: Public Mobile starts service next week

Canada will have eight wireless carriers next week when Public Mobile turns on its new network.

Staffers at the startup’s stores have been telling customers that service will begin May 26 in Toronto and Montreal, with the network eventually extending along the highway corridor from Windsor, Ont. to Quebec City and up to Ottawa.

The launch had been expected to be earlier in the month but Mobilicity beat it to market by opening its doors May 15.

With its Public Mobile’s debut the country will be getting its third new cellphone company in five months. The first was December’s controversial launch of Globalive Wireless Management Corp.’s Wind Mobile, which needed a federal cabinet order to get off the ground.

But Public Mobile has had the advantage of a head start of sorts: Since mid-March it has been selling handsets and signing up customers before the network is turned by promising free Canadian long-distance calling to early subscribers. After launch that will be a $5 a month extra.

That may be needed for those who want to make calls outside of the local area. At the moment the company doesn’t have a roaming agreement.

So far the startup has announced only one no-contract plan, a $40 package that includes 3-way calling involving any carrier.

Public Mobile was asked for comment, but a spokesman said CEO Alek Krstajic won’t do interviews until next week’s the launch.

The company is one of a group of new entrants that bought licences in the 2008 AWS/PCS auction after Ottawa set aside spectrum for newcomers to boost wireless competition.

Three incumbents – BCE Inc.’s Bell Canada, Rogers Communications Inc. and Telus Corp. – had 95 per cent of the wireless market at the end of 2009 and the federal government is determined that should shrink.

An estimated 70 per cent of the eligible market has subscribed to wireless, leaving 30 per cent – perhaps 7 million people – to be signed up.

The newcomers will initially target those people.

Public Mobile spent only $52 million on spectrum to cover two of the country’s biggest cities, leading some industry analysts to say it got the deal of the century when other new entrants spent hundreds of millions more. Globalive spent $442 million, Mobilicity’s parent spent $243 million, Quebecor Inc., parent of cableco Videotron Ltee spent $555 million, Calgary-based cableco Shaw Communications Inc. spent $189.5 million and Halifax-based Bragg Group, parent of the Eastlink cable company, spent $40 million.

By spending far less than others to cover southern Ontario and southern Quebec, industry analysts said Public Mobile got the deal of the century.

It did it by gambling on standard PCS spectrum in frequencies that few thought handsets were available for. Most of the other new entrants went for pricier AWS spectrum, which is better at handling bandwidth-intensive tasks like downloading music and videos.

But people with those needs aren’t Public Mobile’s market. It is going after so-called “working-class” Canadians who want basic voice and text service.

Convergence Consulting of Toronto has estimated that the new entrants will capture 22 per cent of the wireless market by 2015.


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