Published on April 11, 2011 | by nauman Photography by0
Could cell company be Gone with the Wind?
Wind Mobile gets ready to appeal after facing a shutout in the cellphone market
Wind Mobile’s low prices and cheap phones might be the reason this provider will breeze right back out of Canada.
The first new entrant to the Canadian telecommunications industry in over a decade will be appealing the Canadian Radio-television Telecommunication Commission’s (CRTC). The decision to kick them out of the Canadian market on May 18.
Wind competitors, Public Mobile and Telus initially filed complaints seeking the cabinet to take action against their original claims that Wind Mobile isn’t Canadian owned and therefore not rightfully allowed in the market. Both communications giants one their claim.
“[It’s] all about trying to slow down the introduction of new competition,” explains Ken Campbell, the CEO of Wind Mobile.
After Wind bought its license in 2008, the company faced roadblocks with the CRTC claiming it was foreign owned. The Conservative government overruled the CRTC’s decision to block Wind Mobile’s entrance to Canada. The company became a fourth competitor in the wireless market.
Harvinder Sohi, a Wind franchise owner, explained the main reason for the CRTC’s frustration with Wind’s presence.
“Wind is facing legal battles because it’s a foreign controlled company; funded 65 per cent by Egypt’s Orascom Telecom,” Sohi says.
The Telecommunications Act places restrictions on foreign ownership shares in addition to limiting direct and indirect company control up to approximately 46 per cent.
A judge observed two legal errors that were made in the 2009 case for allowing Wind into Canada. Orascom Telecom had an estimated $500 million in financial backing for Globalive, the company that owns Wind.
One of the major reasons companies might be pressuring the CRTC is because in just over a year, Wind has experienced an increase in its customer base. Consumers are switching over from larger companies such as Bell, Rogers and Telus. But are these legal troubles affecting subscriber rates?
Sohi says that any legal issues Wind has had haven’t affected subscribers yet, nor does he think they will.
“Customers in the past didn’t have options with cell phone rates,” he says. “All the available companies offered the same prices. Wind introduced lower rates, contract free agreements, the things people wanted.”
Campbell claims that an appeal will not impact subscribers.
“There is a marginal impact on those who are aware of it, but for the most part Wind is growing, it has established a strong brand, a strong proposition and we’re seeing lots of growth,” Campbell says.
The company has been issued a 45-day grace period during which it will have to comply with the Telecommunications Act.
However, with its on-going legal problems in Canada, what does this mean for current customers?
“I don’t think that Wind will be forced to leave the country because we have such a large customer base here that they will have to come up with a solution for roughly 300,000 subscribers,” Sohi says.
With an election campaign underway, propositions have been made to loosen Canada’s strict rules on foreign-ownership which could dramatically assist new entrants like Wind.
“The kinds of scrutiny Wind has been under hasn’t been seen anywhere before,” Campbell says.
“I definitely think that any company would think twice before entering the market,” he says.
As for the future of Wind in Canada, Campbell emphasizes that the company is here to build a business and a network across Canada.
“Wind Mobile is not here to sell out and is here to stay for a long time.”