Canada’s Wireless Carrier Nightmare Continues: Telus Plans to Shut Down Public Mobile

Even a bit of artificial competition appears to be too much for one of Canada’s largest wireless carriers.

Telus is now saying it plans to shut down discount brand Public Mobile, which operates in the Montreal and Toronto areas, starting in May—forcing its 280,000 customers to buy new phones.

Telus, Canada’s second-largest wireless carrier, bought Public Mobile last year after receiving federal government approval in late October. One of Telus’ first moves after acquiring Public Mobile was to raise prices and cut back on data plans. Now, it’s going to shut the brand down. Public Mobile customers, who were notified via text message yesterday, will be migrated to Telus main network beginning in May, a process that’s expected to continue through August.

It’s unclear whether Telus will move the Public Mobile customers, all of whom have prepaid plans, to its main brand or to Koodo, it’s other discount subsidiary but there are some signals. Koodo devices are expected to start arriving at Public Mobile stores in early April, according to Mobile Syrup and Telus also put Kevin Banderk, the head of Koodo, in charge of Public Mobile shortly after the acquisition.

While Telus had said it planned to migrate Public Mobile’s customers to the main network, which offers faster speeds, when it acquired the company but at that point there was no indication that the move would require customers to buy new phones or that it had any plans to drop the Public Mobile branding.

The move will give Telus access to Public Mobiles spectrum—which appears to have been one of the primary motivations for the acquisition.

“Public Mobile’s PCS G block spectrum is part of a developing ecosystem that is being driven by the insatiable demand consumers have for access to wireless data applications,” Eros Spadotto, Telus’ executive vice-president of Technology Strategy and Operations, said in October. “Major US carriers are ensuring this spectrum is purposed for the deployment of LTE networks and notably, the iPhone 5s and 5c have this spectrum ecosystem incorporated within their chipset, consistent with the trend across smartphone manufacturers to produce products that can be sold globally with a lessened need for customization on a market-by-market basis.”

Given Public Mobile’s heavily discounted price—some of the lowest in the country—it’s become particularly popular among low-income Canadians and it seems unlikely that many of those customers will think the fact that they have to buy new phones is “exciting news,” as it was described in the text message announcement.

Industry Minister James Moore told The Globe and Mail he was surprised by the move.

“Seems like an odd business decision to alienate thousands of Public Mobile users as you absorb Public Mobile itself,” the newspaper quoted him as saying.

Telus is promising some discounts on phones for Public Mobile’s existing customers and customers will also be able to use unlocked or second-hand Telus phones when they’re switched over. That’s been possible for Koodo and Telus customers but not Public Mobile’s because it runs on a CDMA network and doesn’t use SIM cards.

The now higher Public Mobile prices, which range from $19 to $60 a month are set to stay the same, at least for now. Telus promised the federal Competition Bureau that it would maintain that price-point until the end of 2014 when it received approval for the take-over.

UPDATE: That Telus is planning to shut down Public Mobile now appears to be inaccurate. According to a Telus representative, the company is not planning to stop using the Public Mobile branding when it moves customers over to its main network. Customers will be required to purchase new phones but will continue to receive service under the Public Mobile brand. We regret the error.

Photo: Hannah Zitner/Metro