Wind aiming to poach Mobilicity, Public Mobile customers

Analysts say a new advertising campaign by Wind Mobile that aims to pick up customers from Mobilicity and Public Mobile may be successful as the new-entrant carrier tries to capitalize on the woes of its peers. In a posting on its website, Wind says customers who join from Public Mobile or Mobilicity, the other two new-entrant carriers that emerged from the 2008 AWS spectrum auction, before May 11 will receive one month of service free. Wind says these customers can either keep their phone and receive service credits for its value, or upgrade their phone and receive service credits when they trade in their old one. Telus Corp.,which bought Public Mobile in 2013 and announced that the new entrant carrier’s network would be shut down in the coming months, is making a third attempt to purchase Mobilicity, which is in bankruptcy protection, despite what’s been reported to be continued opposition from Industry Minister James Moore. The advertisement on the Wind website also highlights what it says is better network coverage than Mobilicity and Public Mobile in Ottawa, the Greater Toronto Area, Calgary, Edmonton and Vancouver. Neither Mobilicity nor Public Mobile put customers on fixed contracts, so early-cancellation fees are not an issue. Analyst Troy Crandall of 3Macs said in a phone interview Monday that Wind's ad campaign makes sense, because customers who signed up for the new-entrant carriers were making a choice to stay away from the incumbents. "There's that subset of customers who just don't want to go back to the big three," he said. The takeover of Public Mobile and the attempted takeover of Mobilicity are good news for Wind Mobile, Crandall said, because they could ease the competitive pressures for carriers fighting over the cheapest plans. "What has led to the downfall of these new entrants is that there was too much competition for that end of the market, really," he said. "It should give Wind more of a fighting chance. Reducing competition will help because there is that demographic who want to go with one of the new entrants. If there's only one, it makes their choice clear." Crandall said Wind's cheapest plans aren't rivaled by anything at the incumbents, even at their low-cost brands such as Koodo, owned by Telus, or Fido, owned by Rogers Communications Inc. "The big carriers haven't really catered to the lower end of the wireless market," he said. "If they had, these carriers probably wouldn't exist or wouldn't have started up in the first place." Crandall cautioned that Wind must be cautious about its promotions, even if the discounts prove effective in gaining new customers. "They're pretty aggressive," he said. "You have to invest to get a customer. The key is they don't have a huge amount of capital to spend, so they have to make sure they're doing it wisely in giving these promotions.” Crandall said that, if the Mobilicity takeover is approved, it would make sense for Telus to shut down the Mobilicity network and transition its customers to its own network. "It's expensive for Telus to keep different networks going," he said, adding that the company currently operates CDMA, HSPA+, LTE and iDen networks across Canada. Crandall noted that many of the more recent Mobilicity handsets would be compatible with the Wind Mobile network. Barclays analyst Phillip Huang said in a Sunday research note that the advertisement shows Wind is “poised to gain” from the “uncertainty” at the other new entrants. “With Mobilicity consumed by its proposed sale to Telus, and Telus deliberately letting Public Mobile's lower-value customers walk, Wind stands to gain some of their combined 390,000 subscribers,” he said. “Wind has become the only alternative to the Big 3 in three of the top four Canadian markets, and we believe it will see improved performance this year from less competition and a favourable pricing environment. Nonetheless, we still believe Wind's lack of funding limits its potential disruption to the industry.” Wind’s majority owner, Dutch-based VimpelCom Ltd., earlier this year wrote down its entire $768-million US investment in the Canadian carrier, and last year said it wanted a “clean exit” from Canada. — With reporting by Peter Henderson at phenderson@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

Wind aiming to poach Mobilicity, Public Mobile customers

News | May 5, 2014

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Wind aiming to poach Mobilicity, Public Mobile customers

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