Mobilicity preparing to invade West

Published: September 28th, 2010

Watching wireless startup Wind Mobile spread across Western Canada has made some wonder when Mobilicity will follow suit. Both companies are Toronto-based and both have AWS spectrum in major cities west of Ontario. However Wind seems to have first mover advantage, while Mobilicity appears to be ironing out the kinks in its home city after launching service four months ago.

However, today Mobilicity (formerly known as Data and Audio-Visual Enterprises Wireless) announced the appointment of former Telus Corp. sales official Matthew Gould as general manager for Western Canada and ex-Bell Canada manager Tim Velichka as market manager for Calgary. At the same time Mobilicity announced that Janet Holt has been appointed market manager for Ottawa.

While there was no statement of when service will start outside Toronto, there is no doubt it's coming.

It's too early to say whether slow and steady wins the race. Wind did have some teething problems, but with more than 100,000 subscribers so far they've obviously been overcome.

Forgive me for being repetitive, but asI've said before Wind does have a $442 million anchor around its neck, which is the price it spent buying spectrum in the 2008 auction. Mobilicity spent $200 million less and still wound up with spectrum covering all but one of the largest cities in the country. They do have different goals: Wind wants to be a national wireless carrier, Mobilicity wants to be a network of cities. However, first mover advantage has its advantages.

Last week Convergence Consulting Group Ltd. issued its third annual forecast of how the new entrants will impact the wireless industry, predicting the newcomers — including Public Mobile and cablecos Videotron Ltee, Shaw Communications Inc. and Eastlink — will have 6.05 million or 18.6 per cent of Canadian wireless subscribers by the end of 2014.

Things are heating up so much the firm has upped the rate at which Canadian will embrace wireless, predicting an average of 1.9 million new subscribers will sign up over the next four years compared to the average 1.5 million a year in the past five years.

Lower wireless prices will also spur more people to drop landlines for cellphones. By the end of 2014, 29 per cent of Canadians will be wireless-only, the report says, up from 9 per cent at the end of 2009.

The report does warn that a price war is coming, if not already here, and repeats the observation by others that not all can survive. “If the new entrant wireless independents [Wind, Mobilicity and Public Mobile] do not sustain lower prices they will not gain a significant number of subscribers,” it says in part. “This issue, combined with the high capital burn rate, makes being acquired highly relevant. Hence a strategy of doing as much market share damage as possible in contrast to the current ‘rationality’ of the Canadian wireless market place is one to keenly observe going forward.

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Jim Love, Chief Content Officer, IT World Canada

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