Wind Mobile May Make a Profit Next Year, CEO Anthony Lacavera Says

by Istvan Fekete on June 18, 2014

Wind Mobile needs more spectrum to compete with the Big Three, Chief Executive Officer Anthony Lacavera said yesterday during the Canadian Telecom Summit in Toronto. A merger with Mobilicity or another small competitor would be of great help to the wireless startup, he continued (via Bloomberg).

Subscriber and revenue growth are happening, but at a much slower pace than expected: the carrier forecast 1.5 million subscribers by the end of 2012. The reality is that five years after beginning operations, Wind is only halfway toward achieving what it projected in those early euphoric moments.

For those who thought Wind Mobile was dead, Lacavera had a message yesterday: Wind Mobile is alive, and it’s going to stay alive! As of May 2014, Wind Mobile has more than 735,000 subscribers and is still growing, while ARPU stands at $23 for prepaid and $38 for postpaid (blended ARPU: nearly $32). By comparison, Canada’s biggest wireless player, Rogers’, ARPU is at $65, according to the latest public report.

Wind Mobile has ambitious plans for the future, Lacavera emphasized yesterday, as the CEO seeks to make Wind a viable option for consumers seeking a choice beyond the incumbents. With the updated Rogers HUP, consumers are tending to opt for cheaper plans, and Wind is there as an alternative.

However, it needs to overcome some major issues, and spectrum is one of them: “A combination with other new-entrant spectrum or a combination with Mobilicity would be of a significant benefit to both companies,” Lacavera said, according to a copy of his prepared remarks. “The challenge we at Wind face is securing any one of these sources of spectrum at terms and value levels that the business of Wind can support, and within the timeframe that the spectrum is needed to meet LTE demand.”

Wind has great potential, Lacavera highlighted, as it is close to breaking even on a cash-flow basis and expects to turn a profit next year, he said. This will help the carrier to raise much needed capital. To build an LTE network, Wind needs up to $500 million. This process could take about two years. And the carrier needs an LTE network as soon as possible to be able to compete with the incumbents.

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Written by: Istvan Fekete. Follow by: RSS, Twitter, Facebook, or YouTube.

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