By Curt Cherewayko
Competition in the Lower Mainland’s wireless phone market continues to heat up as another new Toronto-based carrier announced plans to offer local consumers what it claims is an inexpensive and simple alternative to the phones and phone plans offered by the three incumbent carriers.
Mobilicity, formerly known as Dave Wireless, said last week that it’s launching its 3.5G network – which is more powerful than third-generation networks but not as powerful as emerging fourth-generation networks – in Vancouver sometime in November, pending the completion of network and systems testing.
The company’s phone plans range from $25 for unlimited texting and local calls to $65 for a “full menu” plan that includes additional unlimited features like long distance, call waiting and voice mail.
Whereas many carriers provide free or heavily discounted phones to consumers that sign up for multi-year contracts, Mobilicity sells its phones at full price, but has no fixed terms for its plans. Its high-end phone is Google’s Nexus One, which sells for $549.
The company believes that consumers won’t have a problem absorbing the upfront costs of a phone in exchange for bill certainty and the freedom of having no more than a month-to-month commitment to a phone plan.
The company said its customers won’t see on their bill the $6.95 system access fee and 911 emergency access fee that Canadians despise.
“Everything we’ve done is designed to eliminate bill surprises,” said Dave Dobbin, Mobilicity’s CEO.
“The thing that consumers hate the most is being shocked and horrified about how much their bill is.”
If Mobilicity customers’ calling rates change when, for example, they travel from an urban area to a rural area, an automated voice will join the call to notify them of how much per minute the call will cost.
Alternatively, the call will be dropped to protect consumers from additional charges.
“In Canada, we still pay some of the highest wireless prices in the developed world,” said Dobbins.
“So there’s a lot of room for improvements in the wireless industry in Canada.”
Dobbins noted that Canada’s low churn rate, the frequency at which consumers switch phone companies, is exceptionally low because consumers have become apathetic about the cost of their phone service.
The incumbents – Telus Corp., Rogers and Bell Canada – have previously said they welcome the new competition.
Partially as a response to the new competition, each incumbent has launched a discount and bare-bones phone brand: Bell has Solo, Telus has Koodo and Rogers has Chatr.
Another new carrier, Wind Mobile, arrived in Vancouver last June, but could not be reached for comment about its traction here thus far.
While the Lower Mainland market is not as crowded as Greater Toronto’s, which has three new carriers in addition to the incumbent brands and those incumbents’ discount brands, further competition could be coming to Vancouver.
A rep from Public Mobile, which is a new carrier that recently entered the Toronto and Montreal markets, said that as the company expands its network it will look to establish a presence in B.C. and Alberta, given that the two provinces have the largest urban populations outside of its east coast markets.
Public Mobile doesn’t have any wireless spectrum in Vancouver – which it needs to operate a network here – but it said it will be looking to acquire additional spectrum when the federal government holds its next spectrum auction late next year or in early 2012.
Mobilicity and Public Mobile, which are backed largely by private equity, said they’re well capitalized and meeting their early milestones when it comes to customer traction.
With $50 basic phones and an unlimited calling plan for $24, Public Mobile is arguably the lowest-cost provider in Canada.
The new entrants believe that there’s enough room in the wireless market for incumbents and newcomers.
Bruce Kirby, Public Mobile’s vice-president of strategy and business development, said each new carrier is carving out respective niche markets.
“You have different players focusing on different customer segment.”
He added that Public Mobile is targeting the value-conscious consumer.
“They tend to be very price-sensitive, lower-income people who want an unlimited offer because it enables them to have that certainty around their billing.”
Kirby noted that the company has had discussions with Vancouver’s Novus Entertainment Inc. about what Novus plans to do with the Vancouver wireless spectrum it acquired in the government’s last auction two years ago.
Novus, which is owned by Vancouver’s Concord Pacific and sells Internet and television services to highrise condo owners in the Lower Mainland, could not be reached for comment about what it plans to do with its spectrum.