Canada's Wind Mobile growth slows sharply

Tue May 15, 2012 3:33pm EDT
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TORONTO (Reuters) - Globalive's Wind Mobile, one of Canada's more recent wireless entrants, grew at a much slower pace in the first quarter than a year earlier, suggesting established operators are managing to blunt the threat posed by newcomers offering lower rates.

The slowdown comes as Wind, facing stiff competition on the lower end of the market, pushes to sell more expensive phones and data plans.

The service, backed by Russia's Vimpelcom Inc since its purchase last year of Egypt's Orascom Telecom Holding SAE, was launched in late 2009 with a focus on no-contract plans for unlimited talk and texting. More recently it said it intends to become Canada's fourth national wireless carrier.

Wind signed up only a net 12,000 new customers in the period, bringing its subscriber base to more than 415,000 at the end of March, according to statements released by Globalive's biggest investors on Tuesday.

Wind, which had 403,000 subscribers at the end of 2011, added 39,000 in the year-earlier quarter.

BMO Capital Markets analyst Peter Rhamey said the numbers fell short of his expectations and reflect intense competition in the lower-value, prepaid segment as well as rising costs to attract and retain customers.

An average Wind customer paid C$27.30 a month in the quarter, which Rhamey called "unsustainably low." T he company charged an average of C$26.70 a year earlier and C$26.40 in the prior quarter.

Canada's three main telecoms providers - Rogers Communications, BCE's Bell Canada and Telus - have between 7 million and just over 9 million wireless customers each and a much higher average revenue per user (ARPU) than Wind.

They have been adding postpaid subscribers, who typically sign long-term contracts and spend more to use data on the latest smartphones, while losing less valuable prepaid users.   Continued...