Yesterday the Financial Post covered Public Mobile’s plans to sell their phones with unlimited call plans through Wal-Mart Stores. According to CEO Alek Krstajic, the Toronto-based startup plans to sell through its own stores, independent retailers as well as big drugstore and grocery chains.
Many believe the lack of competition is holding back wireless growth in Canada, where mobile phone use rates are lower than our North America neighbours to the south. About 65% of Canada’s population had a mobile phone last year compared with 88% in the US, and 70% in Mexico.
With Canada’s three largest mobile carriers, Rogers, Bell and Telus account for 95% of the Canadian market, Public Mobile’s aggressive plans couldn’t come at a better time.
Public Mobile will initially operate later this year in Toronto and Montreal. According to Krstajic, for $40 customers will get unlimited local calls and text messaging. And Public Mobile customers won’t be tied to minimum contracts in order to subsidize the cost of their handset – instead, they will have to buy phones at full price. What a novel idea.
The Public Mobile brand is a result of the Canadian wireless spectrum auction last July that raised $4.25 Billion. While the auction was dominated by the big three, 40% of the licenses were set aside for new entrants. Among the new entrants was the unglamorously named, US equity-backed 6934579 Canada Inc. which quietly spent $52M on spectrum.