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Public Mobile tweaks strategy
QMI Agency – Peterborough Examiner, Stefania Moretti, May 26, 2010
Wireless entrant Public Mobile announced a new low-cost cellphone plan in response to
growing competition just one day before it turns on its network in Toronto.
Public Mobile CEO Alek Krstajic told reporters Tuesday the company's unique strategy will
ensure the company outlasts the competition.
The company is the third new carrier in five months to take a stab at Canada's fiercely
competitive mobile market largely held by Rogers, Bell and Telus, following similar pushes by
Globalive's Wind Mobile and Mobilicity.
"The reality is a year after launch, two out of three are going to have problems," Krstajic said.
The company bought its spectrum licence for far less than the competition at $52 million and
raised hundreds of thousands more than it needed, making it a potential buyer, Krstajic said.
"We will consolidate the lower end of the market," he said, adding he would rather purchase the
newcomers who stumble in their first year than get swallowed up by a larger player.
Krstajic expects the incumbents will watch closely as Public Mobile consolidates the segment
and when the time is right, offer to buy as oppose to risk profitability by offering lower rate
plans to their whole customer base.
Everything Public Mobile does is the name of staying profitable, Krstajic said from his bright
office in uptown Toronto.
The company landed what he called "the deal of the century" when it took over the space for $6
a square-foot with $1.2 million worth in furniture thrown in.
It's the bargain basement approach Public Mobile lives by.
"We intend on being fast-followers as oppose to be leading or bleeding-edge."
In addition to its previous sales pitch of unlimited $40 talk and text option without contract or
credit check, Public Mobile will now offer customers an unlimited talk-only plan for $24 a
month plus taxes. The company will flick the switch on its CDMA network covering Toronto's
416 area code on Wednesday at 12:01 a.m. and in Montreal on or before June 25. The carrier
plans to expand its footprint into the surrounding suburbs over the course of the summer.
The idea now is to focus on two core offerings, Krstajic said, adding the big three as well as
some of the new players too often use bait-and-switch tactics in an effort to up-sale customers.
Public Mobile's no-frills approach has been to target first and foremost the one-third of
Canadians who don't have a cellphone, or what it calls "under-served."
"We are not trying to be everything to everyone," Krstajic said.
The company plans to offer roaming and data-capable handsets within the next 12 months.
Krstajic sees Mobilicity as the biggest competition. The wireless entrant beat Public Mobile to
the punch, launching service in Toronto earlier this month with plans to roll out coverage
in Vancouver, Edmonton, Calgary and Ottawa later this year.
They both market themselves as urban-only providers, whereas Wind has marketed itself as
Canada's fourth national provider.
Public Mobile will be the first new entrant in Quebec since the federal government auctioned
off wireless spectrum in 2008 in an effort to boost competition in the marketplace. At the time,
Rogers, Bell and Telus held an estimated 95% of marketshare.
Krstajic called pre-launch sales in Montreal "staggering" and far exceeding expectations. Sales
in Toronto have also come ahead of expectations, he said.
The company would not release the exact number of subscriptions it has to date, but did say it's
in the thousands.
Quebecor's Videotron is expected to launch wireless service in Quebec and parts of
northeastern Ontario as early as this fall.
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