This month marks the first anniversary for two of the newest wireless carriers in the country, Mobilicity and Public Mobile.
Mobilicity, backed by Toronto entrepreneur John Bitove, goes into its second year of operation with $215 million in new financing from private investors and having just started service in its fifth city, Calgary.
Public Mobile, controlled by private investors, operates in Toronto and Montreal and recently expanded its offerings to include wireless data after concentrating on voice service.
Neither will say how many subscribers they have after 12 months of operations. But both maintain they are strong and will continue expanding their networks.
Their launches were memorable for different reasons. “We had done some pre-selling, so we had a substantial base of customers before we formally launched the network,” recalls Bruce Kirby, vice-president of Public Mobile, which celebrates its anniversary on Thursday. “It was a bit of a rush to get their all their phones properly activated.”
Mobilicity CEO Dave Dobbin remembers a mini financial crisis. “So many customers came in [to the carrier’s first store] we overloaded the limit on the credit card machine. We actually had to [temporarily] stop selling part way through the day because we had to call Visa to up the limit on the machine.”
Amit Kaminer, an analyst with the SeaBoard Group telecommunications consultancy, says the pair -- as well as fellow newcomers Wind Mobile and the wireless service of Quebec cableco Videotron Ltee – have given subscribers wider options than they had a year ago.
“We had high prices for voice and data,” he said. Since the launch of Wind Mobile in December, 2009, followed by Mobilicity and Public Mobile, not only have prices dropped and unlimited voice plans appeared but system access fees have disappeared.
BCE Inc.’s Bell Mobility, Rogers Communications Inc. and Telus Corp. still hold the lion’s share of wireless subscribers. According to the Canadian Wireless Telecommunications Association (CWTA), at the end of 2010 together they held more than 23 million wireless subscribers across the country. That’s over 90 per cent of the market.
But Kaminer notes that 80 per cent of their customers are locked into contracts. Part of the strategy of the new entrants is to pry them away when the contracts expire.
The new entrants are also after those who have never paid for a cellphone, the so-called entry level buyer.
Bell, Rogers and Telus have replied with their Solo, Chatr and Koodo brands respectively.
For Kirby, a sign of how much the new entrants are getting under the incumbents’ skin was Rogers’ marketing response. “The fact that Rogers came out with the Chatr brand and ran what were effectively negative ads for four months until the Competition Bureau shut them down was a little surprising,” he said.