Startup Wind Mobile has 100,000 subscribers: Analyst

“It’s expected they crossed the 100,000 mark some point around the beginning of July, maybe the first week or two,” said Will Croft, an analyst with British-based Wireless Intelligence, which tracks wireless carriers around the world. It is also a unit of the GSM Association, an industry group for carriers using the GSM/HSPA wireless standard.

However, Croft and the Montreal-based SeaBoard Group have widely differing estimates of how two other new entrants are doing: Mobilicity, which launched in Toronto in mid-May, and Public Mobile, which launched in Toronto at the end of May and in Montreal in June.

Wireless Intelligence believes each had only 3,000 subscribers by the beginning of July. Those numbers were called “ludicrous” by SeaBoard Group managing director Iain Grant.

SeaBoard estimates that by Sept. 1, Mobilicity will have 36,000 subscribers and Public Mobile will have 24,000.

SeaBoard is close to Wireless Intelligence on Wind, estimating that by Sept. 1 the carrier, which operates in five cities, will have about 108,000 subscribers.

Later Croft amended his figures to make a fairer comparison of the progress of the duo with Wind’s seven months of operation. By the end of the year, he predicted, Mobilicity will have about 50,000 subscribers, while Public Mobile will have 5,600.

While Toronto-based Public Mobile operates in two of the country’s biggest cities, Croft said it will suffer some by having a network based on the less advanced CDMA technology. Competitors have much faster HSPA+ data networks, ideal for smart phones. Public Mobile has said CDMA gives it an advantage in pricing its plans, and its target buyers don’t want smart phones.

Public Mobile refused to comment on the Wireless Intelligence report. Neither Wind nor Mobilicity responded to a request for an interview by press time.

As privately-held companies, none of the trio has issued figures on how they’re doing.

However, Wind Mobile chair Anthony Lacavera has said it will make a statement Aug. 12, the same day that one of its biggest investors, Egyptian-based Orascom Telecom Holdings S.A.E. releases its second quarter financial statements.

While it is still less than a year since the three startup have been in business, their numbers pale beside those of the leading incumbent carriers. SeaBoard estimates that by the end of this month Rogers Communications Inc. will hold 37 per cent of the total wireless market with just over 9 million subscribers, BCE Inc.’s Bell Canada will hold 30 per cent of the market while Telus Corp. will hold 28 per cent.

There are about 24 million wireless subscribers in the country.

Initially, the startups are targeting the roughly 5 million Canadians who have resisted getting a wireless device or who are unhappy with the prices offered by incumbents. Their weapons are no-contract plans with a number of unlimited talk or text options.

But the incumbents are fighting back. As it announced its quarterly financial results today, Bell said it will soon re-name its Solo value brand as Solo Unlimited, a nod to the the startups. Rogers has started a new value brand called Chatr, and it’s expected Telus will have a response, possibly through its Koodo value line.

Meanwhile, Quebecor Inc.’s Videotron cable division will launch its new wireless service across Quebec shortly, which will largely challenge the incumbents but could also be a challenge for Public Mobile.

Croft said his Wind estimates are partly based on public statements that the newcomer pulled in 5,000 subscribers in the first two weeks of operation. By the end of the first quarter (March 30), his firm estimated Wind had about 30,000 subscribers.

Wind’s estimated 100,000 subscribers “is certainly very encouraging for a new operator,” Croft said. He believes Orascom has said publicly it expected to hit that number only at the end of this year. Wind’s goal is to have 1.5 million subscribers within three years, he added and eventually 3.5 million.

On the other hand, he noted Wind Mobile has a “bullish” marketing strategy, including promotions for luring customers from competing carriers and discounts. That can’t be done for long, he said.

“Whether or not they can they can provide decent competition is very much riding on whether they can sustain the kind of traction they’re encountering today but without the discounts they’re giving. I believe they’re far too heavy to be sustainable for the long term.”

One advantage Wind has over Mobilicity and Public Mobile is Orascom’s deep pockets, Croft said. Orascom, which has shares in a number of wireless carriers around the world, has about two-thirds of the equity of the Canadian company, although only one-third of the voting shares. Chairman Lacavera has most of the rest.

While Wind paid $442 million for wireless spectrum across much of the country and has spent tens of millions more on building networks in Toronto, Ottawa, Calgary, Edmonton and Vancouver, Orascom “sees it as a long-term play.”

“I don’t think they’re in trouble,” Croft said.