TORONTO – Two guys who helped Wind Mobile get off the ground and then build its follower Freedom Mobile are the latest in a line of Canadian companies hoping to shake up the wireless market here.
Algis Akstinas (left, formerly the director of marketing and commercial strategy at Freedom) and Alex Bauman (right, formerly manager, customer base management) launched dot mobile Thursday with the goal of bringing a product and the company to market in 2020.
Dot stands for “Data On Tap” and the company aims to be just that for Canadians – a spigot of cheap, pay-as-you-go wireless data, said CEO Akstinas in an interview.
Dot mobile will stock no phones and have no stores or call centres. Canadians will download the dot app and sign up as a subscriber or to use it to purchase data when and wherever they need it. They will get their SIM cards both electronically and through local delivery partners. Customers will bring their own device.
That sounds nice and simple and affordable, but there are some serious negotiations which need to be done first – not to mention a lot of regulatory heavy lifting – since dot mobile will also not have its own network. Akstinas told Cartt.ca in an interview the plan is to sign multiple MVNO agreements with two or more of the Big Three of Rogers, Bell and Telus – as well as regional players such as their former employer, Eastlink and Vidéotron.
Multiple networks means dot mobile customers will always be covered, no matter where they roam.
MVNOs, however, are notoriously difficult to get Canadian incumbent carriers to agree to on affordable terms. However, the potential for mandated MVNOs will be a part of the CRTC’s hearing into wholesale mobile wireless roaming service tariffs coming later this year.
“We are fully aware of the regulatory environment,” said Akstinas. “We've been working in this industry for a while. We know how difficult it is to launch an independent carrier in Canada.”
The MVNO business model works well in Europe and the U.S. with brands such as Republic, Virgin and Google Fi providing competition to the incumbent operators in their regions – while paying those incumbents for network access. Some call that a win-win-win for the MVNO operator, the incumbent network owner and the consumer. In Canada, there are no significant independent MVNO operators.
“Affordability is a huge problem,” added Akstinas. “It depresses the mobile use. Some groups of people choose to switch off the data and don't use it… We think dot mobile will be driven a lot by dissatisfaction with current wireless providers.”
He believes the Canadian incumbent carriers will soon see the wisdom in getting behind “tiny telecom” companies like his, whose low-cost structure will allow it to serve the lower-end or lower-use or transient fringes of the mobile data market more efficiently than, say, a flanker brand from the Big Three.
“We think that carriers will start seeing the benefit of engaging with independent players. They just simply cannot do it because of cost. You cannot serve these more transient, more flexible, more moderate user smart phones affordably.” – Algis Akstinas, dot mobile
“We think that carriers will start seeing the benefit of engaging with independent players,” he said. “They just simply cannot do it because of cost. You cannot serve these more transient, more flexible, more moderate user smart phones affordably.”
Dot mobile envisions two offerings to consumers at the start, where they can select a data-only option or one that also includes voice and text, where everyone signs up via the app. It also wants to run an online used smartphone exchange portal, too.
While the CEO referred to the nascent company as a “well-funded startup”, he declined to name his financial backers. He also said the company will still try to make a go of it even if the CRTC doesn’t mandate MVNO access at affordable rates in its next proceeding, but he is holding out hope government and the Regulator will see how dot mobile can provide more and better competition.
“I think the CRTC will love us. I think they’re looking for someone like us to spark the imagination of the public, to actually show what competition could look like in real life… but I think the biggest thing is that we want the wholesale rates to be available for MVNOs, not only for us, for all MVNOs.”
The company is now in the beginning stages of a social media campaign to try to get 10,000 members to sign up in advance of its launch – as proof of Canadians’ desire to get something newer and cheaper than their current wireless operators.
