For consumers hoping for new choices in the world of mobile phones, the words of Public Mobile chief executive officer Alek Krstajic weren't exactly music to their ears.
“Take a good look at the three of us," he told an audience at the Canadian Telecom Summit in Toronto on Wednesday, pointing to himself and the heads of Globalive and DAVE Wireless, two of the expected new entrants in Canada's mobile telephone market.
"Two out of three of us will not be around at next year's telecom summit,” said Krstajic. "All three of us may be here, but two out of three will have different business cards."
The expected arrival of new entrants to Canada's wireless industry has brought with it hope for consumers looking for choices beyond the current offerings of Rogers, Bell and Telus, and the new entrants have done nothing to dissuade that. There have been promises of unlimited talk and text for a single fee, assurances of better customer service and simple billing and hints of lower data rates and unlocked phones.
But Krstajic's bold pronouncement spoke to the difficult task facing the new players as they take on Rogers, Bell and Telus, who have a combined 95 per cent of the market between their seven collective brands and have already begun making changes in anticipation of new competition.
Consumers have been awaiting the arrival of the new entrants since they won spectrum from last year's auction of wireless airwaves, which raised $4.2 billion for the federal government. The government reserved 40 per cent of the 105 megahertz of airwaves up for sale for new entrants to encourage competition in the wireless industry.
Services to launch in late 2009, early 2010
So far, the new entrants have offered only scraps of information, in part for competitive reasons and in part because they have been busy over the last year assembling their management teams, positioning their future brands and setting up their networks.
But some details have emerged.
Public Mobile, backed by several private equity firms, has said it plans to launch a $40 unlimited talk-and-text service in Ontario and Quebec late in the third quarter of 2009, building its network from Windsor to Quebec using a block of spectrum it acquired at the auction that other players, including the incumbents, chose to ignore.
Toronto-based Globalive Communications Inc. has said it plans to launch two brands, a discount phone under the Yak brand with a price target of $40 a month and a still to be named core brand, but has only said it plans to launch a countrywide network — with the exception of Quebec — by the end of 2009.
Globalive CEO Anthony Lacavera said his company plans to start its rollout in major cities including Toronto, Ottawa, Calgary, Edmonton and Vancouver and that it is setting up a GSM-based high-speed network.
Toronto-based Data & Audio Visual Enterprises Wireless Inc., or DAVE Wireless, the wireless company headed by entrepreneur John Bitove, has said it plans to roll out service in early 2010 to Toronto and expand to other cities shortly thereafter.
DAVE Wireless president Dave Dobbin said his company plans to roll out a network compatible with a newer version of High-Speed Packet Access technology (called HSPA+) expected to catch on with smartphone makers in 2010.
Marketing challenges
Montreal-based Quebecor Inc. is also expected to launch its own network in Quebec by the end of 2009, though in February president and CEO Pierre Karl Peladeau complained incumbent wireless companies were delaying the approval of agreements to share towers and roaming services.
In addition to battling incumbents and battling each other, each of the new players faces unique obstacles to gaining traction in Canada.
For Public Mobile, it has to convince Canadian consumers that the chunk of isolated spectrum it bought in the "G" block has a future.
Analysts are divided: a Dave Wireless commissioned report from analyst LeMay-Yates Associates said the spectrum was untested and unlikely to be a priority for handset makers, while a SeaBoard Group report from earlier this year suggested Public Mobile may have scored a coup in picking up spectrum for much less than the new incumbents.
DAVE Wireless also faces marketing challenges, and recently announced that the company will have a new name when it launches.
As Dobbin said during the telecom summit: "I'm Dave from DAVE... gotta change the name."
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