Wireless market heats up with entry of Public Mobile, Mobilicity

Toronto’s mobile phone market has suddenly become a crowded place as two new entrants have flipped on their networks over the past two weeks.

Vaughan, Ont.-based Mobilicity launched its network May 14, and Public Mobile followed soon after, launching on May 26. Toronto-based Public Mobile had already opened its stores and was signing up customers six weeks before turning on network service.

The two firms are the latest new entrants following Canada’s wireless spectrum auction in 2008. Designed to provide more competition to the “big three” incumbent carriers Rogers Wireless, Bell Canada, and Telus Mobility, the auction has spawned three new carriers so far with more to come soon. Public and Mobilicity follow Wind Mobile, which launched its network at the end of 2009.

Related Story

Public Mobile vs. Wind Mobile – new carrier showdown

Firms looking to put new mobile services in Canadians’ hands stand a good chance to do so. Only about one-third of Canadians are using basic mobile communications technologies such as text messaging and instant messaging, according to a new survey released by Dublin, Calif.-based Sybase Inc.

Canada ranks second-last out of 16 countries when it comes to using such services.

But that doesn’t mean success is on the cards for every new wireless entrant.

“There’s certainly an uphill battle for each of these players,” says Jayanth Angl, senior research analyst with Info-Tech Research Group. “Each of the incumbents already offers value lines.”

Telus offers Koodo, Rogers offers Fido, and Bell offers Solo. The alternate brands share two things in common – they end in “o” and offer wireless services for comparably lower fees.

New entrants have all tried to set themselves apart from incumbents by offering transparent pricing, flat fees for unlimited services, and no binding contracts. Now they’ll have to set themselves apart from other new entrants as well.

Public Mobile

The latest entrant onto Canada’s wireless scene has 60 stores open in Toronto and Montreal. It will launch its Montreal network June 25.

The Toronto firm’s gambit to open stores early to sign-up customers has resulted in “thousands” of customers so far, according to an e-mail from CEO Alek Krstajic.

Public is looking to tap the market of people who don’t yet have a cell phone. Its store locations are scattered across urban locations and they offer low-cost, unlimited plans.

A $24 plan includes unlimited local calling, call waiting, call forwarding, and three-way calling. A $40 plan adds either unlimited texting or unlimited Canadian long distance.

Long distance add-ons include a $10 per month for unlimited long distance to U.S. and Canada. A plan coming in July will address overseas calling.

Public’s coverage area stretches from Highway 427 in Toronto’s west to Pickering’s border in the east and from Lake Ontario to Highway 407. Further expansion is planned for this year and next.

“Check back next month and we might be bigger than the other guys,” Krstajic says. “It’s a dynamic thing.”

Public doesn’t offer the ability to make calls beyond its borders. Their network uses CDMA technology and the company would need a deal with Bell and Telus to offer roaming. But it may not have too.

“With their focus on urban centres, it might not be as important as you think,” Angl says. “The cost to support roaming and the demand to support roaming from their users might not add up.”

Roaming will be offered eventually, Krstajic says. But it is not a priority.

“It is a business decision, not technical,” he says. “We want everything we sell currently to be offered on a flat-rate basis and roaming can’t be done that way.”

Mobilicity

Canada’s wireless market is ripe for the picking, says Dave Dobbin, president and CEO of Mobilicity. There’s low landline substitution with mobile phones, and there’s low mobile penetration overall.

“I think there’s room for all the players in the market to survive, if not thrive,” he says. “We don’t compete head to head with anyone in the market place. We all offer something different and have a different customer focus.”

So Mobilicity must be happy with the subscribers it has managed to snag since its Mid-May launch?

“I’m tickled pink,” Dobbin says, referencing the brand’s prominent colour.

The carrier’s plans include a unique text-messaging only plan for $15 a month, that also allows for unlimited calling to other Mobilicity users.

On the high end, there’s a $65 per month plan for unlimited talking, text, data, and North American long distance.

Long distance add-ons allow callers to talk on an unlimited basis with East Asia or South Asia regions for $20 a month.

Mobilicity has a clear focus and isn’t looking to displace a major carrier with its offerings, Angl says. The new entrant has been clear about its focus on major urban centres.

“They are being realistic about their opportunity here and offering something that’s different in comparison to the incumbents.”

The coverage area in Toronto reaches from the middle of Mississauga to west Pickering, and north to Richmond Hill. Customers will pay a flat rate of 20 cents per minute when they’re roaming outside of this zone in Canada, Dobbin says, and 50 cents per minute when roaming in the U.S.

“We have better rate plans with better value than anyone else,” he says.

Mobilicity is also slated for launch in Edmonton, Calgary, Ottawa and Vancouver.

Wind Mobile

Wind Mobile got a jump on the other new entrants by launching in December 2009. The carrier already has services running in Toronto, Ottawa, Calgary, Edmonton, and will be launching in Vancouver in the next few weeks.

“We always expected the new competitors to come,” says CEO Ken Campbell. “I think Canada needs more competition.”

Wind faced some challenges in the early days of its launch with network glitches. It has been offering a slew of promotions as competition heats up in the wireless market. Those include a $150 credit offer to those switching from other carriers, and a half-price deal for six months if new customers get on board before the end of May.

So has Wind Mobile met its goals in signing up new customers?

“I can say it’s going well,” Campbell says. “We’re pleased with the uptake and the enthusiasm for our offerings.”

Wind’s pricing system is based on home zones and away zones, and supplemented by an international roaming capability. In Toronto and surrounding area, the zone stretches from Oshawa in the east, around the Golden Horseshoe to Hamilton and Stoney Creek. At its northern tips, it reaches Brooklin, Richmond Hill and Brampton.

Follow Brian Jackson on Twitter and check out the IT Business Facebook Page.

Share on LinkedIn Share with Google+