By J. Sturgeon | Vancouver Sun | 03. 10. 10
TORONTO -- Conventional wisdom for Canada’s newest cellphone carriers has been to be first into the market. With fierce competition overhead from established incumbents such as Rogers Communications Inc., the thinking was that the earliest in would hold a key leg up against other newcomers and reap the rewards of consumers’ pent up demand for choice.
Three months after the launch of WIND Mobile, the conventional wisdom is now being undermined by some. “WIND it seems has missed the first-mover advantage,” said Iain Grant, principal analyst at SeaBoard Group, an industry research firm.
Mr. Grant said a hasty launch by WIND has led to spotty network deployment and subsequently weak wireless coverage. Limited distribution channels and advertising have also led to a “lost message” with would-be subscribers.
“Certainly reports of network faults ... and a small retail presence have dampened some consumer enthusiasm for the new entrant’s services,” he said in a new report.
Tony Lacavera, chairman of WIND’s parent Globalive Wireless Management Corp., acknowledged the firm was having some difficulties.
“We can see the weaknesses in the Toronto and Calgary networks and we’re adding sites, adding towers to try and strengthen the coverage. It’s the big operational focus,” he said in a recent interview .
Mr. Grant said other startup carriers such as Mobilicity and Public Mobile would do well to delay their respective launches until their networks are complete and a wide retail presence is secured. Ignoring that could cost customers.
According to Seaboard estimates, WIND has picked up about 30,000 subscribers in Toronto, Calgary and Edmonton, the three cities it now offers services in.
The uptake has not been as brisk as some predicted and indeed likely below WIND’s estimates, which are for 1.5 million subscribers within three years (that would require 41,500 new customers a month).
Analysts say WIND was rushed out of the gate in early December after Industry Minister Tony Clement overturned a ban from the regulator over its controversial ownership and capital structures. Parent Globalive is backed by Egyptian carrier Orascom Telecom, who has provided hundreds of millions in financing in exchange for a 65% economic interest and representation on Globalive’s board.
Mr. Grant said the company likely moved before the decision could be revisited. But things were rushed. Its network was incomplete and only one distribution deal, with Blockbuster, had been signed.
Evidence of unrest at WIND itself -- perhaps emanating from Orascom -- came last week when two senior executives, chief information officer Scott Waller and head of customer service Chris Robbins, pictured, were removed.
Still, others say WIND maintains an upper hand against other wireless newcomers. “The fact that [other entrants] haven’t even launched yet is a testament to the fact that they’ve got a huge competitive advantage because of Orascom,” said an analyst that asked not to be named. Orascom has given Globalive heft in negotiating network and handset agreements that other new entrants lack.
Moreover, new deals with big box electronics retailers Future Shop and Best Buy are rumoured to be in the offing, which would balloon WIND’s distribution.
Meanwhile, neither Mobilicity or Public Mobile, which will compete in major urban centres with WIND, have definitive launch dates.
“No launch is ever going to be perfect,” said the industry analyst. “If you wait for perfection you’ll never launch.”
Financial Post
jasturgeon@nationalpost.com
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