Wind Mobile Disappoints With Q1 Results: Is The Carrier’s Golden Run Over For Good?

by Gaurav Kheterpal on May 21, 2012

The wind has been blowing in the wrong direction for Wind Mobile this year. The carrier which staked its claim to be the “fastest growing wireless carrier in Canada” last year, has had a forgettable year so far. Last month, Wind Mobile lost an appeal to the CRTC regarding its request to review an earlier decision on seamless roaming.

The carrier’s been plagued down by rumors which suggest that a management shuffle is likely to happen sooner than later. To add to its woes, Wind’s growth seems to be slowing down significantly. The carrier last week reported that it added fewer than 13,000 new subscribers in its most recent quarter ended March 31, up only 3% from the previous quarter.

Wind’s total customer base now stands at 415,000 – a sorry state of affairs considering that the carrier crossed the 400,000 landmark at the end of 2011. Wind Mobile reported that ARPU (Average Revenue Per User) increased by 2.2% year-over-year to an average $26.70 from $27.30. To put things in perspective, arch-rivals Mobilicity and Public Mobile have reported adding 63,000 and 45,000 customers in the last three months of 2011.

“In Canada, the subscriber base of Wind Mobile has exceeded 415,000 all the while maintaining APRU levels compared to [the first quarter] in 2011,” Ahmed Abou Doma, CEO of Cairo-based Orascom Telecom, said in a statement.

Till last year, WIND Mobile chairman Anthony Lacavera said repeatedly that his company would be a consolidator and the last new entrant standing. It was believed that Globalive would buy Mobilicity and the deal made sense for a number of reasons. One of the first considerations is that of the imminent spectrum auction, a land rush for exquisite 700 MHz (and maybe 2500 MHz) spectrum that could draw billions. With the pooled forces of Mobilicity and WIND Mobile bidding on the same team, the fused firm could theoretically score more of the good stuff.

There’s also the consideration that WIND and Mobilicity have a number of things in common. While WIND clearly has larger aspirations, both companies have service in Toronto, Ottawa, Calgary, Edmonton, and Alberta. And both companies use AWS band spectrum, which means that their frequencies could be combined.

However, Wind’s fortunes have worsened in the recent months. The carrier says the reorganization of Polkomtel, which operates under the Plus brand, was one of the main factors causing the decline. Polkomtel is a key strategic customer for Wind Mobile and it’s believed the reorganization took more time than expected, thereby leading to substantial costs for the latter.

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Written by: Gaurav Kheterpal. Follow TheTelecomBlog.comby:RSS,TwitterFacebook, or YouTube.

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