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WIND Mobile Financier Regrets Entering ‘Protected’ Canadian Mobile Market

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Image: An example of the power of Wind Mobile.

WIND Mobile’s billionaire backer, Egyptian Naguib Sawiris, noted in an interview yesterday with the CBC’s The Lang & O’Leary Exchange that he regrets entering the Canadian mobile market as “it was a bad idea”. Boy, did he ever speak his mind:

Sawiris said Canada’s antiquated telecom rules are destined to hurt the economy’s productivity and dampen innovation.

“You need to ask yourself, why isn’t Rogers in the U.K., like Vodafone or France Telecom,” he said.

Why aren’t they everywhere if they’re so good? The answer is simple, here they’re protected. They can be inefficient, their cost structure can be expensive.

‘We are trying to help [consumers] and not because we are good guys — because we want to make money.’

“Why would an Egyptian like me be in 25 countries, and a big company [stay] here? Because they’re pampered,” he said. “How can you create innovation if you close up yourself like that? What’s the argument? I don’t see it.”

Rogers senior VP of regulatory affairs, Ken Engelhart, responded and dismissed the allegations his company was inefficient. He noted Rogers operated cable in the U.S. prior to selling off that division to concentrate on wireless:

“The fact that we are very efficient is one reason why I think [Wind] and the other new entrants are finding it so difficult to compete in Canada.”

Sawaris has threatened to boycott the next wireless spectrum bidding unless the federal government sets aside some licenses for new entrants, and has started to discourage others from investing in Canada:

“Anybody who asks me, I tell him, ‘Look, we are the stupid investors that poured a billion dollars into Canada here and created 1,000 new jobs, please don’t do this mistake. Don’t come here,’” Mr. Sawiris said. When asked whether he regretted his decision, he added, “Totally. I would actually, if they would give me my money back, minus 10 per cent, I would take it any day.”

WIND Mobile’s intricate ownership alignment shows control by Canadian equity owners but its initial launch was backed by 80% funding from parent company Orascom, owned by Sawiris. Even though the ‘Big 3’ telcos in Canada complained to the CRTC against this foreign ownership structure, WIND Mobile given the green to launch in December 2009.

Since then, the company has amassed 317,000 subscribers (45,000 added last quarter), but it pales in comparison to the combined 23.5 million combined subscribers of Rogers, Telus and Bell. But there’s hope. Orascom recently merged with VimpelCom, a massive Russion wireless company that brings the combined total number of customers to 200 million worldwide.

Sawiris notes WIND helped lower cellphone prices in Canada by an average of 30 percent. He also mentions there’s no real competition here as the ‘Big 3’ all have similar revenue numbers coming from each user.

Sawaris nailed it. There is no innovation or competition here. Coming off my three year contract with Rogers, my research for a new monthly plan shows a minimum of exactly $70 per month for any voice plan plus 6GB data plan from either Rogers, Telus and Bell. I find it odd the plans are all similar in nature down to the included minutes and features.

Every time we see one carrier introduce a plan or price change–the others quickly follow suit. Just look at the 6GB data plan as an example. Marketed as a ‘promotional offer’, it just keeps on coming back time and time again.

Will the iPhone Ever Come to WIND Mobile?

WIND Mobile’s Chairman, Anthony Lavacera had this to say back in August when asked about the absence of an AWS-supported iPhone:

GOB: Are you satisfied with your handset selection – and what are your thoughts on the next iPhone or the Google/Motorola Android handsets that will come soon?

AL: That’s a two-hour discussion right there. On the handsets, no, we’re not satisfied. AWS is a problem for handsets. We don’t have the same selection. It is widening and we have enough, but the range is not as wide as we would like it to be. And of course on the iPhone question, AWS is not supported by the iPhone. We’ll see what happens with iPhone 5, which looks like an October time frame for its release, but I’m not holding out any hope.

He followed up his thoughts on the iPhone in early November. It appears Android is keeping users occupied:

“The adoption of Android that we can see is beyond explosive, so we’re quite encouraged. Six months ago if you’d asked me, I would have said that we look forward to Apple making the iPhone 5 available on AWS. Today, I would say it’s much less important to us as consumers are really jumping at high-end Android phones from a number of manufacturers.

If an iPhone is launched to support the Advanced Wireless Services (AWS) spectrum WIND Mobile (and Mobilicity, Public Mobile, Videotron) operates on, all I have to say to the ‘Big 3’ telcos is–watch out. That’s the only thing stopping Canadians from jumping ship and ditching your services (that and our lengthy three year contracts).

What do you think? Do you agree with the arguments of Sawaris?

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  • Dogsoldiers

    Yeah…I most likely would have jumped ship by now if the iPhone was AWS (well, Pentaband actually, so I could roam on a pre-paid sim card outside the city). Wind is pretty decent here in Canada.

    I’ve thought about switching for the SGIIX or the Galaxy Nexus (and the unlimited $35 plan) but I can never let go of my damn iPhone. LOL.

  • Wuju

    I would seriously look into Wind if iPhone is available under their network.

  • JB

    I don’t really get the argument that Canada is a bad place for Wind to be.  If the big 3 are so “pampered”, then wouldn’t this be prime stomping grounds for a discount carrier like Wind?  Or are they meeting too much resistance in their network build-out and roaming agreements?

    I’m still praying for Wind with iPhone support in my area… or at least close enough to scare up some pricing changes from Robellus.

  • Anonymous

    I would jump ship in a heart beat. I have been saying it for years. But where am I
    Going to go. No matter what company I go to I get the same plan for the same contract. We need more competition and some laws need to be rearranged. no doubt the big 3 are protected. In the states with a one year contract I negotiated a plan with 6 gigs of data and unlimited coast to coast text and talk. Plus every little bell and whistle you can think of. All for about 50 bucks. There, one does not get nickel and dimed for every little add ons

  • Kidkobra555

    I would have jumped ship to Wind a long time ago, but the matter of the fact is that, if you’re a person that has to travel all over the Golden Horshoe, to have to pay the ‘roaming’ charges, the cost-differences is next to nil if i jumped ship from Telus.  Maybe they should’ve figured THAT out and get the entire GTA up and running, before crying about non-competitiveness…if I live in Richmond HIll, and I decide to go to Costco at Elgin Mills and Leslie, 6 minutes away, why the eff should I be paying roaming charges…

  • Kevin

    The only thing stopping everyone with a contract is the phone selection indeed. however, there are still very decent blackberries and some nice android phones that support AWS. but i can imagine, that the sole reason why iphone users are still with the ‘big3’ is the lack of AWS support. if the iphone5 was AWS, i couldnt imagine anyone giving any logical reason as to why people wouldnt go WIND, mobilicity, etc. it would just be game over completely for the ‘big3’. customers want more for less, and at ~$40, you can, and mostly unlimited everything. but the mention of the word ‘unlimited’ to the big3, youre going to have to fork out at least $70/month with a lock down 3yr contract.

  • Marsdust

    If they offered the iPhone, I would jump over tomorrow!  I am glad he slammed so much in this article and I agree with him totally.

  • Anonymous

    The big 3 are so entrenched in the Canadian market, protected by regulations and are also tv and internet providers. Bundling is a powerful motivator, and the big 3 have well established nationwide networks. It is hard for a new company to come into this market, but it looks like they are growing fast.

  • Anonymous

    I agree completely with what he said. The CRTC is a huge problem. They are hindering us consumers and stifling competition. Free market please.

  • JB

    I truly do hate being limited to the big 3.  I just don’t get what the actual regulatory protections are here.  Spectrum licensing? 

  • Anonymous

    It’s nice to see someone totally speak their mind on such a messed up system. If more consumers opened their eyes to this we could have real competition tomorrow!

  • Anonymous

    Spectrum licensing is part of it. The big 3 bought up all of it to they could play keep away from all new entrants. Then there is the problem with Canadian ownership laws for a company to enter. Wind ran into a roadblock with this and it took the federal government to overrule it. It really took Wind a long time to get set up here because of the bs. Thankfully it looks like they’re expanding coverage quickly now and their customer numbers are growing quickly.

  • If they got iPhone support, then we can seriously make inroads in the Canadian marketplace.

    They took a risk going forward with AWS in Canada.

  • Anonymous

    I’m not really in favor of big 3 and hate them like everybody else. But the fact is, the service quality of wind is not good. Yes, you get unlimited everything for 35~40$. But the main functionality, which is phone, would not work properly. My GF gave wind a chance, but it failed badly. Dropped calls, being unavailable, and being in wind away zones when she was even in downtown Vancouver really pissed her off. Having unlimited data plan is not such a big deal, as you can really live with 500MB for email, twitter and facebook. 
    Wind’s horrible service combined with a shitty android phone that have 4 hours of battery life (XT720) was such a horrible experience …

  • Anonymous

    I wonder if AWS can survive when T-Mobile USA gets taken over by AT&T. If the deal goes through then there would be no way Apple would make an AWS iPhone when T-Mobile’s customers now have access to AT&T’s LTE  + UMTS networks

    And I agree with his comments on how the carriers are protected… Stupid CRTC

  • Anonymous

    AWS spectrum is kinda shitty like CDMA for signal penetration. Also the big 3 had shitty service when they first launched too.

  • Mark Morissette

    “Why aren’t they everywhere if they’re so good? The answer is simple, here they’re protected. They can be inefficient, their cost structure can be expensive.”
    That pretty much sums it up.  If Rogers (or Bell, etc) tried to compete anywhere else in the world with their pricing and policy structures they jam down our throats here in Canada they would crash and burn in epic fashion.

  • Kraken

    The big 3 Canadian ripoff telco’s (Robbers, Helus, Hell) obviously have formed a anti-competative union.  They have us Canadians by the balls, and they know it.  The only reason I’m not on Wind is simply because the iPhone doesn’t support it.  I too am off the contract prison sentence. Robbers retention is now refusing to give out any deals.  This is after calling back several times, and speaking to multiple reps.  The best they can offer is the same $70 6GB data plan they are offering to new contracts.  20 years with Robbers, and that’s the best they can offer.  What a F’ing joke.

  • Eason_1108

    This is one of the reason why people are @ occupy vancouver.

  • Anonymous

    Yep; I was with Fido (owned by Rogers), and my company wanted to bring me under the Telus corporate plan. I quite liked Fido, said so to the retentions rep, told them what I was being offered to port my number over, and could they match it.

    Nope. Closest they could get was… exactly the same as what I was paying. Or I could save $10 by dropping from 6GB to 500MB. They wouldn’t even waive the ETF to upgrade me from my 3GS to a 4S, even after I told him we were getting an activation credit that doubled what the ETF would cost.

    At every turn I gave Fido a chance to keep paying them as a customer, even when the corporate plan with Telus was clearly in my best interest. I noted that two friends managed to get kick-ass retention plans with them last year: iPhone 4, everything I had plus extra goodies… for $45/mo!! The rep said that earlier this year the head office clamped down on their ability to give out retention deals worth a damn.

    He was apologetic, and completely understood when I told him it made no sense for me to stay with Fido given the corporate offer. Not to mention they couldn’t get a 4S to me in less than 3 weeks. I got my Telus iPhone 4S in 3 days, the company pays $10/mo less, gets 150 additional minutes, evenings/weekends start an hour earlier. About the only loss was going from unlimited texts to 250 out.

    In the last few days I’ve been called four times by the number I marked as Fido telemarketing. I haven’t bothered answering; what could they possibly say or do to get me back? I just ported over to a new 3-year contract, it’s cheaper and has same or better features (except the texting) than their final offer, and so far I’ve found the Telus network superior to Rogers/Fido.

  • Davidamxalencuin

    What a rich whine baby. If the Big 3 are so privileged here then why did a shrewd business man not do his research ahead of time. Also nothing would stop a discount brand from being successful here of they could actually meet the service demands for Canadians. I personally cancelled my 25 dollar plan with Wind which became more like 75 dollar plan with roaming charges. The network was shitty bare minimum signal. Data speeds slow. Never once was I able to get through to their customer service Not Once, after hour long waits the phone would drop the calls. Sure it’s easy to sell a 25 dollar plan for 317000 subscribers. The operating costs, maintaining limited network cost , service cost, other business cost are incomparable to maintaining these services,and well, for 300k subscriber and 6million subscribers is very different. If wind is charging 25 dollars for servicing 300k people imagine what it would charge to service 6million. Their profit margins should actually be higher then any of the big 3. P.S. people you can buy your phone full price as Wind sells and not go on a contract with big 3 too. Handset subsidy is the biggest reason we have contracts. You want to shell out 700$ for an iPhone go to Apple.ca unlocked and use on any GSM network. Ofcourse it’s going to be cheaper to buy a shitty Samsung phone sold on AWS network.

  • Anonymous

    Rogers retention have been giving out sweet deals always. Head office said enough, in all honestly why beg when you can get a $29 deal by just walking into a store? Sure iPhone withdraw is a bitch, but your wallet will be happy.

  • Ranphon

    He made a really good point at it. The carriers here in Canada have no competitive advantage if they are trying to launch their services somewhere else in the world. Base on the plans provided to customer. I didn’t recognize there’s any big differences. Then probably customers will only go with the carriers that has more valuable with customer service. I think Canadian government should gives certain quotas and helps to those new entrant in order to lower the monthly cost of ppl.

  • Anonymous

    His comments hit the nail on its Huge Head!

  • OMG

    You are asking to price match a corporate plan? Ha ha. NO offense but great going with common sense.

  • Grandmasterflash

    If you got the iPhone on AWS but with dropped calls, bad reception and small sized local calling areas, I HIGHLY doubt ANYONE will switch. Especially from what I’ve seen with the iPhone 4’s attenae issues and people’s lack of tolerance to any phone not functioning 100%. I have seen first hand Wind’s issues and if the phone doesn’t function as a phone should…it’s worthless (and believe me I hate the pillaging rogers does to me)

  • Anonymous

    Did you read the part about the friends getting a retentions deal from Fido of $45/mo last year? Part of my point was that they’re supposedly not allowed to do that anymore.

    In any case, we are a small company, we’re not getting the deep volume discounts a big company gets, so the only real benefits the corporate plan gives us over a consumer-priced offer is a) our minutes are pooled, and b) the activation credit. Waiving the ETF at this point in my 3 year contract would’ve been the equivalent of 2-3 months service. If their head office won’t their retentions staff cut a deal to eat $150 in order to keep me as a customer another 36 months, it is they who are lacking common sense.

  • Anonymous

    What a stupid post.

  • If only WIND and other new entrants had a chance to join the regular GSM frequencies…I bet this would be a different story.

  • I bet you’d see a whole lot of people take their unlocked phones and jump ship in a heart beat – I know I would – I just bought a BlackBerry 9900 and even though it’s AWS compatible, Telus firmware disables that spectrum for the phone from what I’ve read.

  • Ykstrip

    I couldn’t say as Wind for some horrible reason is not in Quebec. This is unfortunate as we offer a strong cellular market. I am a director of operations for a telecom company. We even contacted Wind to see about helping bring it to Quebec but we were told they are not ready and do not have an adequate billing system. We are still very interested!

  • Andy

    problem is that Bell and Rogers pretty much own the CRTC. if the CRTC was more fair towards newcomers then maybe wind would have a chance.

    although lets be honest, nobody switched to wind cuz their reception sucks.

  • Joy

    We have probably the most expensive plans and longest contracts in the whole wide world !! And not 1 but 3 companies are doing that together to control the market and limit our choices. It is Ridiculous !! Like call display is another $15 which belongs to another add-on to your Talk Plan, etc. Yet, your monthly bill still has mistakes….

  • +1

  • Fordomatic69

    Telco spy!!

  • NJ

    Actually, I support partially what Sawairis said in the part that the game in Canada used to be a tripoly, three big companies controlling the market their way giving same pricing plans more or less, you can select one way to be killed, one can execute you by head chopping, the other will give you bullets in your body, and the third will hang you, on the other hand, knowing how Wind employed their unqualified personnel, which never had the experience of starting operations from scratch, they screwed up big deal, and until now they are still shooting in the darkness aiming no targets but shooting for shooting spending Sawairis money for nothing.

  • ffd

    Glad to read the article and Sawaris is absolutely right.  The big 3 are shielded by the CRTC….very sad indeed, when the CRTC should be watching out for us consumers!
    We need more and more competition which will force the big 3 to bring down their rates. I do hope the CRTC gives out more licences in the coming year.
    I for one will jump ship if the iPhone is offered by WIND, Mobilicity, etc.

  • Kellie Inkster

    This talk sounds a lot like why Richard Branson got out of the Canadian wireless market. Something needs to be done when this looks to be a reoccurring issue, with multiple businesses. I personally don’t mind Rogers but maybe only because I’ve never known how good phone companies work. Apple changed the game when they introduced their products, their customer service, etc. Yes, we pay a premium for apple products however we get it back tenfold in the lack of aggravation we receive from them. I’ve never ever had an experience that hasn’t exceeded my expectations. Songs didn’t transfer from my iphone after upgrading, not only did they get me my songs back but they also gave me credits as well. I’d like to see one of the Big 3 do something like that. I’m sad that the phone companies don’t share apple’s passion and drive to build a better business and ensure that customers are kept happy.

  • Apres_ski_god

    I agree … Canada’s telecom setup is archaic and the Rogers reps response illustrates their ostrich style of management… My wife’s contract is up in Feb and mine expires in May … I will seriously look at Wind as I’m fed up with Rogers and Bell.

  • Jazz

    Fuck yeah tell em how it is, fuck government/corporations like rogers/etc… Go wind go 🙂

  • Dustin

    Ya, if the iPhone could be purchased through wind, I would defiantly switch to wind.

  • Nailed it. iPhone is the only reason keeping me away from WIND.

  • Hassan Shah

    If they offered the iphone. I wud take a leap the next second….

  • Taffi

    Wind Mobile is the most useless carrier ever! I regret using it! They just steal people’s money and their workers are extremely rude, I realized I have been topping up into the wrong account, I always pay $45 into the account even if it is not finished yet. But I realized my 3g has not been working, I could not call or send messages so I went to top up again but the worker there, ‘Justin A’ said I still had money in the account? But why doesn’t it work!! I called customer service and he said “there has not been any payment made to this account” WTH!! but I still have the receipt in my hand?? I don’t know what to do! I need help! Or I probably should just give them back their Sim card and everything and move just to Rogers or Bell cause I’m done!!!

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