MONTREAL – New cellphone company Wind Mobile is aiming to win consumers away from major players Rogers, Bell and Telus and new rivals by offering smartphones and basic mobile phones without contracts.
Wind Mobile is expected to launch this week in Toronto and Calgary.
“We’re going to go after the mainstream market,” Globalive chairman and CEO Anthony Lacavera said Monday.
Canadians want fixed-price plans and predictability when it comes to their monthly bills and “that’s what we’re offering,” Lacavera said.
Wind Mobile announced Monday that it has allied itself with movie and game rental chain Blockbuster Canada and will begin sales from outlets in Toronto and Calgary soon.
Toronto-based Wind Mobile considers itself Canada’s fourth major wireless carrier after Rogers (TSX:RCI.B), Bell (TSX:BCE) and Telus (TSX:T) with a national presence except for Quebec.
However, Globalive’s strategy isn’t unique as the major players have similar no-contract plans and the other new cellphone companies are heading in the same direction.
Telus spokesman Shawn Hall said Wind Mobile isn’t breaking any new ground and contracts have always been optional at Telus.
“Customers have always had the choice of paying for a handset and purchasing service month-to-month, or getting a free or discounted handset with a one-to-three year contract,” Hall said.
New player DAVE Wireless has said it plans to offer what “flexible” plans and Public Mobile has said it will offer $40 monthly plans with no contract.
Wind Mobile’s parent company, Globalive, received word on Friday that it could operating in Canada after Industry Minister Tony Clement overturned a CRTC decision that said Globalive wasn’t Canadian owned or controlled and prevented it from launching.
Egyptian telecom Orascom owns 65 per cent of Globalive and holds much of its debt, a structured accepted by Industry Canada.
Canada’s largest telecom and media union plans to fight Clement’s decision on the legal front, saying it violates the federal Telecommunications Act.
“This decision is a sellout of Canadian national interests and a betrayal of Canadian culture,” said Dave Coles, president of the Communications, Energy and Paperworkers Union.
Wind Mobile wants to meet the rapidly growing demand for smartphones and will let consumers buy them at full price – they can range from several hundred up to $800 – and have lower monthly bills since they would own the phones outright.
Wireless carriers generally offer smartphones for free or at discount prices on three-year contracts to entice consumers to buy them.
Lacavera said Wind Mobile can’t offer discounted smartphones to lower the price – unless there’s a contract.
“Obviously, we can’t offer significant subsidies without contracts but our goal is certainly to give Canadians all of the flexibility they need to not have any kind of contracts, he said.
Telecom analyst Mark Goldberg said Wind Mobile is offering a lot and it remains to be seen how well it can “execute” on its promises.
Wireless carriers have to recover those costs either through longer contracts with discounted phones or with lower cost mobile phones, said Goldberg of Mark Goldberg & Associates Inc.
Goldberg said the Wind Mobile isn’t well-known in North America, but Lacavera will be able to draw on its experience in international markets such as Eastern Europe, Middle East and Africa.
“Wind as an operator in other markets has the ability to bring the experience of launching an alternative brand,” he said.
