TORONTO – “With legal and regulatory certainty, the time for Wind on the defence is at an end. The big three no longer have the luxury of a distracted and artificially crippled new competitor,” Globalive chairman and CEO Anthony Lacavera said on the final day of the Canadian Telecom Summit in Toronto. “The time for Wind on offence has arrived.”
But it isn’t only the big three incumbents – Rogers, Bell and Telus – that Wind Mobile is suiting up to take on. Wind is also looking to differentiate itself from its fellow new entrants by shifting its marketing and distribution focus to postpaid wireless service plans, leaving the prepaid market to the rest of Canada’s new wireless competitors.
“In 2011, we determined that our business plan of a metro PCS-style prepaid was doomed, and have since shifted virtually all of our customer acquisition efforts to a contract-free, handset financing-driven postpaid,” Lacavera said. “We had significant negative prepaid additions in Q1 (2012), as we allowed zero or negative-value customers to bleed to smaller new entrants willing to buy negative lifetime value customers.”
According to Lacavera, the Canadian prepaid wireless market was “artificially inflated” when new competitors entered the market after the 2008 AWS spectrum auction. “That bubble has burst rapidly as all rational, long-term operators, including Wind, have focused their efforts on servicing postpaid customers,” he said.
Wind Mobile currently has a 7.7% market share of the national postpaid wireless market, which represents a 116% increase from this time last year, added Lacavera. Looking at average revenue per user (ARPU) figures, he said Wind’s postpaid ARPU has passed $34, while its prepaid ARPU lags at $23.
Similar to the other telecom executives who spoke at the Canadian Telecom Summit this week, Lacavera used some of his time on stage to outline the type of action he feels the government should take going forward to foster competition in the wireless industry. While pleased with the federal government’s decision to liberalize foreign investment restrictions for wireless companies with less than 10% market share, he also applauded the provincial governments which have introduced consumer protection legislation. However, he also supports the recent call from other carriers for the CRTC to create a national policy.
Other issues that Lacavera said he would like to see addressed by the federal government include tower sharing, media asset consolidation, and what he calls the “spectrum imbalance”.
With respect to tower sharing, something Wind has struggled with since launch, he said the Canadian wireless industry needs “a more robust national framework” from the federal government and better coordination with municipal governments (something Telus CFO Robert McFarlane called for yesterday). “We must develop national standards that incentivize municipalities to work collaboratively with carriers and ensure fair play amongst carriers within their various jurisdictions,” Lacavera (right) said.
Turning to the issue of spectrum allocation, the CEO said the big three incumbents have “an embarrassment of riches” on the spectrum front. “Bell and Telus, whom we all know operate one network, have 45% of all allocated spectrum, and Rogers is not far behind with 41%,” Lacavera explained. “We at Wind currently have three per cent of all allocated spectrum… And all other market players are left with tiny slivers of the [spectrum] remaining.”
Lacavera said long-term wireless competition “will be seriously jeopardized” if the government does not create policies to rectify the spectrum imbalance. “Regrettably, just a couple of months ago, the government decided to grant new entrants only 25% of prime spectrum in the upcoming (700MHz) auction, further solidifying the oligopoly’s market dominance and further marginalizing new competitors.”
Photo by Pinpoint National Photography
