Wireless Intelligence Backs WIND

by Jordan Richardson on August 6, 2010

Wireless Intelligence considers WIND Mobile to be the “most significant new player.” According to its research, the upstart leads the pack of new entrants in Canada’s telecommunications sector.

Speculation has been running wild over WIND’s announcement of its subscriber numbers. I discussed the issue a few days ago and cited Anthony Lacavera, chairman of Globalive Wireless Management Corp., as saying that we would be “surprised” by the subscriber digits. Whether the stats will back up his confidence is for August 12 to decide, of course.

Wireless Intelligence puts those subscriber numbers around the 100,000 mark. Basing this on WIND’s spectrum holdings and some good old-fashioned guesswork, the Wireless Intelligence numbers, if correct, would stick WIND clearly at the top among the newbies.

Consider that Mobilicity and Public Mobile boast around 3,000 connections a piece and the WIND numbers could look pretty good.

That doesn’t mean it’s all good news for WIND Mobile, though.

“For the new entrants, initial performance and subsequent investment will be scrutinised in light of their heavy capex outlays, particularly given recent tactics to boost an initial lacklustre uptake. WIND in particular has seen a significant increase in customer growth in the second quarter of the year, but at a cost of heavily subsidising customer credit and half-price unlimited tariffs for six months, which will prove unsustainable over the long-term, hitting profit margins,” says Wireless Intelligence analyst Will Croft.

Croft does think that WIND’s backer, Orascom, will be able to provide the funds to help WIND weather the storm – for now. The hope is that WIND develops enough to be able to stand without such backing over the long haul, naturally, but a little leaning on the funding for the time being could help push the company over the introductory hump.

With Bell (29.66%), Telus (28.38%) and Rogers (36.71%) still holding the vast majority of the market (SaskTel ranks fourth with just 2.38% of market share in Canada), many disgruntled telecom customers are hoping that at least one of the new companies succeeds. But cracking the glass ceiling will be increasingly difficult, especially with the big guns constantly repositioning. Should Wireless Intelligence’s numbers hold fast, WIND will hold a mere 0.43% of the market.

Any company hoping to crack the industry at this point needs to have staying power, which brings us back to the sustainability of WIND’s plans. If WIND can survive the hits to its profit margins, it could recalibrate and reposition in time for a surge.

Even if it’s able to crack 5% in a few years, it could be a sign that things are working. But as long as the big guns hold the cards, the prospect of a new company breaking on through to the other side looms far, far in the distance.

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Written by: Jordan Richardson. www.digitcom.ca >. Follow TheTelecomBlog.com > by: RSS >, Twitter >, Identi.ca >, or Friendfeed >

{ 2 trackbacks }

Clarifying the Numbers Game — TheTelecomBlog.com
August 13, 2012 at 12:09 pm
The Numbers Are In For WIND — TheTelecomBlog.com
August 13, 2012 at 12:10 pm

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