By J. Sturgeon | Vancouver Sun | 03. 19. 10It is fitting that Alek Krstajic, the chief executive of feisty startup wireless carrier Public Mobile Inc., has borrowed a page out of the playbook of Ted Rogers, a founding figure of Canada's $16-billion cellphone industry.
Public Mobile began selling cellphone services in Toronto and Montreal yesterday despite lacking a core ingredient in any wireless enterprise: a network.
Mr. Krstajic told reporters crowded into one of Public Mobile's stores in the heart of Toronto's Greek community that 15 stores were open across the city and another 10 in Montreal despite the fact that customers will not be able to use their new mobile phones until May, when Public hits the "on" switch.
"Ted said to me," recalled Mr. Krstajic, a veteran in Canadian telecommunications circles and former Rogers Communications Inc. executive, "don't let technical issues with the engineers stop you from selling."
Public Mobile does not have a technical issue with its new network; instead, it wants to avoid one. So it's taking another two months to go live.
"We want to make sure we're 100% ... that our customer experience is great," he said. "I can already see it in some people's eyes. Why would a customer buy now when the network's not on--why would I dish out between $75 and $125 for the handset?"
There is a pitch. Public Mobile plans to offer free, unlimited long-distance calling across Canada "for life" to anyone who signs up before May.
There are caveats. A customer will have to stay current on the bill and if the promotion attracts too many subscribers, Mr. Krstajic said, it may end prematurely.
It's an aggressive strategy and one that would almost certainly be applauded by the late Mr. Rogers, the entrepreneurial founder of the largest wireless provider in the country with more than 8.4 million subscribers.
Public Mobile, alongside a handful of other new entrants, plans to chip away at the formidable edifice that is Rogers and the country's other two incumbents, BCE Inc. and Telus Corp., which combined control 95% of the market.
Its strategy will rely on selling into neighbourhoods such as Toronto's Danforth and to people who do not make $100,000 a year and use a BlackBerry. Instead, Public Mobile said yesterday it will offer four handsets -- none of them smartphones--that will sell for $180 or less, and no contracts.
The company will offer a $40 monthly flat rate for unlimited -- "truly unlimited" -- voice calls and texting, the CEO said.
Greg MacDonald, an analyst at National Bank Financial, said he wants more clarity on exactly what $40 gets someone. "The release does not provide any further details to roaming charges or other calling feature options such as voicemail and call display," he said in note to clients.
Still, the rates are low and will add to pressure on the average revenue per subscribers the big three make, at least in the markets in which Public Mobile will compete, he said.
Public Mobile paid about $50-million in 2008 for wireless spectrum licences in Southern Ontario and Quebec. It is vying for share against Rogers, Telus and BCE's Bell Canada and a handful of other new entrants, including Wind Mobile, in Canada's quickly crowding cellphone market.
jasturgeon@nationalpost.com
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