November 14, 2011 / 9:59 PM / 7 years ago

Canada's Mobilicity slashes prices for holidays

TORONTO (Reuters) - Upstart Canadian mobile operator Mobilicity will slash its already low-cost calling plans from Tuesday in a holiday challenge to both big providers and other new entrants.

Mobilicity said it will offer half-price rate plans for a limited time, potentially launching a pricing war of the sort that established operators, BCE Inc’s Bell, Rogers Communications and Telus, have long avoided.

“I think this holiday season is going to be the most competitive we’ve ever seen,” Mobilicity Chief Executive Dave Dobbin said in an interview ahead of the promotion’s launch.

Mobilicity, which serves Toronto, Ottawa, Vancouver, Edmonton and Calgary, said it would also halve its C$10 unlimited data and C$5 consumer BlackBerry plans.

“We’re doing really, really well. We’re happy with our progress,” he said, declining to provide details about customer growth.

A rival new entrant, Globalive’s Wind Mobile, added only 41,000 net new customers in the three months to September 30. Chief Executive Anthony Lacavera said it had recorded strong uptake of new post-paid plans and could have added up to 20,000 more customers, but did not order enough high-end smartphones.

“The types of customers we’re attracting are the good credit, long-standing customers. I’m comfortable saying we’re going in the right direction,” he said.

The number of new customers was sharply lower than that from the three established operators, who have focused on post-paid users who typically pay three times as much as a prepaid customer.

Lacavera said post-paid plans accounted for between 35 percent and 40 percent of Wind’s subscriber base.

Wind’s Windtab moves the company closer to the model of the established carriers, who subsidize the cost of a phone to customers willing to pay higher costs over a period of time.

Mobilicity is sticking to a no-contract focus and Dobbin said the company was selling hundreds of BlackBerry Curve smartphones every day for an upfront cost of C$469 which includes a year of service.

“There’s no contract, we don’t ask for your social insurance number, you don’t have to do a urine test, we don’t ask for your birthday or your first-born, nothing like that,” Dobbin said. “It’s wireless for the people.”

Reporting by Alastair Sharp; editing by Janet Guttsman

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