Mobilicity became the country’s newest wireless provider on the weekend when it began offering service in the Toronto area. However the debut wasn't completely smooth.
The startup opened 35 company stores Saturday and is adding several hundred other resellers in other outlets this week. However, not all were immediately ready for business. A staffer at a mid-town computer store with a Mobilicity sign in the window said he couldn't accept activations because he didn't have any cellphones yet.
Mobilicity, the brand name of parent Data & Audio-visual Entertainment (DAVE) Wireless Inc., is the second of the eight startups that won licences in the 2008 AWS/PCS spectrum auction to launch. Wind Mobile got off the ground in December in Toronto and has extended to Edmonton, Calgary and Ottawa. Public Mobile is expected to open its doors shortly, as will the new network of Quebec cable company Videotron Ltee. Videotron has been reselling wireless service from Rogers Communications Inc. under its own brand, but having purchased spectrum Videotron can now control its wireless future.
“It’s exciting to be bringing a new service to Canada that’s all about value and simplicity,” DAVE Wireless John Bitove told reporters Friday in announcing the launch would be the next day. Service will be extended later this year to Vancouver, Calgary, Edmonton and Ottawa.
Dave Dobbin, president and CEO, noted the company’s no contract plans start at $15 a month for unlimited local calling from one Mobilicity subscriber to another and including unlimited local texting to $65 a month, which includes unlimited data, unlimited world wide texting, unlimited North American long-distance and voicemail.
There's also a $40 a month unlimited data plan within Mobilicity coverage areas for USB data stick buyers
Subscribers can access the Internet from their handsets, but to do so there’s an extra cost - $5 per megabyte. To help keep track of data charges, roaming and long distance, money has to be deposited in advance in a personal account called “My Wallet.” Mobilicity system will warn users about service costs and the state of their wallets to avoid billing surprises.
However, coverage is limited to the cities Mobilicity has service in. Step outside the cities and roaming and long distance charges will apply unless a subscriber has the $45 a month plan, which includes unlimited long distance within the country, a $55 a month plan, which includes unlimited North Amercian long distance, or the $65 plan.
Like most of the wireless startups Mobilicity will initially target the roughly 30 per cent of Canadians to resist signing up for a cellphone. However, Mobilicity is going further to target the country’s Asian communities.
For $20 a month on top of any of its plans subscribers can take one of two unlimited voice calling packages: One to China, Hong Kong, South Korea, Japan, Singapore and Vietnam, and the other to India, Pakistan and Bangladesh.
“The two larges ethnic groups in the Greater Toronto area are Asian and South Asians,” Dobbin explained. “Eighteen per cent of the GTA are East Asia and 16 per cent from South Asia. They’re huge communities and they’re completely underserved.”
Bitove added that the Asian packages could also encourage people from those communities to drop their landline phones. “The only reason most people keep a landline is for long distance,” he said.
In launching Saturday, Mobilicity will beat to market Public Mobile, which aimed to be open in mid-May in Toronto and Montreal. Like Mobilicity, Public Mobile was told by the federal telecom regulator, the Canadian Radio-television and Telecommunications Commission, to make changes to its shareholder agreement to ensure Canadians are in control of the company before it can earn its carrier licence.
Although Public Mobile hasn’t said what progress it’s making the changes, but apparently DAVE Wireless, which has only two shareholders – Bitove and New York City’s Quadrangle Capital Partners – quickly got approval from its principals. Approval from Public Mobile's has six investors might be taking longer, or the startup may be in the final stages of tuning its network and business processes.
Like Wind Mobile, Mobilicity will sell its handsets at full price with no contracts.
Although Mobilicity is mainly aiming at consumers, it will have an offer to small business owners who want to take its $499.99 BlackBerry 9700. For $20 extra on any plans owners of that unit can get a business plan for using its Internet features between Mobilicity subscribers.
Other handsets at launch include the $169.99 Nokia 5230, which has a 3.2-inch touch screen; the $99.99 Totem, made for Mobilicity by a Chinese manufacturer which includes a touch screen; the $99.99 Sony Ericsson TM506 flip phone; the $199.99 HTC Snap, which runs the Windows Mobile 6.5 operating system; and the $109.99 Huawei U7515.
Mark Goldberg, a Thornhill, Ont., telecommunications consultant, likes Mobilicity’s range of plans. “It’s a different offer from the incumbents (BCE Inc.’s Bell Canada, Rogers Communications Inc. and Telus Corp.) and Wind,” he said in an interview.
While the plans are attractive, he acknowledged they won’t appeal to a business traveller who crosses the country a lot. On the other hand, Mobilicity acknowledges that’s not a target market, nor are people who are heavy data users.
“I think they’ve got a bit of a winner” with the plans and the wallet concept, said Brian Platts of Nottingham Communications, a telecom marketing consultant. However, he said that when a Mobilicity subscriber leaves the local coverage area the plans don’t look as good.
That’s by design. DAVE Wireless paid $243 million for spectrum in a number of provinces, including southern Ontario. But for the time being there are no plans to extend its network north of the Toronto suburbs of Marhkham and Vaughan, west into Oakville east into Oshawa. Broadening coverage even into cottage country will depend on customer demand, the company said.
“This business plan is built on people who live work and play in the GTA (Greater Toronto area), said Bitove.
The entrepreneur also controls the XM Canada satellite radio franchise as well as a number of fast foot and restaurant chains and said he will leverage these companies “as much as I can” to promote Mobilicity -- including making Mobilicity coupons available at Kentucky Fried Chicken outlets.
Soon after Mobilicity’s press conference Wind Mobile responded with a press release touting that its Toronto area coverage is four times bigger than the newcomer’s, and that its network is already up in Vancouver, Calgary, Edmonton and Ottawa.