TORONTO – Launching first in a market can bring tremendous rewards, but as Wind Mobile seems to be experiencing, it can also represent a serious misstep.
Wind Mobile, the first of the new entrant wireless companies, launched service last December, but recent actions demonstrate that the company may have stepped into the market with the wrong foot.
Chief customer officer Chris Robbins left earlier this month, and then, in what seems more like an act of desperation, the company announced that it would pay $150 to potential customers to break an existing wireless contract and switch.
The two announcements come as the company appears to have hit a rough patch. According to industry analysts, subscriber addition problems have resulted from a network that was rushed into service, and an ineffective retail sales strategy with few points of sale and including no on-line sales. Wind has some independent retail outlets, but is relying largely on a partnership with Blockbuster Video.
Even offering customers their first month free hasn’t given Wind Mobile the subscriber numbers that it anticipated, according to Jeff Fan, a telecom and wireless financial analyst with Scotia Capital Markets.
“There’s been a significant percentage of people that have not signed up for the second month,” he told Cartt.ca.
These recent problems have left the company’s brand battered and bruised, and it’s unclear how and when it may address them. Wind Mobile did not reply to an interview request to discuss the issues plaguing the company.
But, the wireless carrier plans to raise additional financing in order to deal with network and points of sales issues. Wind Mobile announced its intention to enter into a private debt financing “to expand the Wind Mobile network” and to “create new distribution partnerships" in early February.
Problems at Wind, previously known as Globalive Wireless, extend back to last summer when the company’s hopes of a 2009 holiday-season launch were thrown into jeopardy when incumbent wireless companies called for a public review of Wind Mobile’s ownership. The CRTC decided to put Wind’s ownership structure under the regulatory microscope that Fall, and things went from bad to worse after the Commission determined that the company wasn’t Canadian enough.
A reversal of the CRTC’s decision by the federal Cabinet opened the door to a December launch, but the months spent on the ownership file may have taken precious time away from launch preparation.
The nearly six months of regulatory wrangling seems to have affected Wind’s ability to get its house in order for launch, and the delay may have even forced the company to use extreme tactics to attract new subscribers.
Anthony Lacavera, chair and CEO of Globalive Communications, parent of Wind Mobile, has acknowledged in published reports that there are problems, but also added that the company is addressing them.
Fan said that he believes that these are just “growing pains” for Wind Mobile, and that the company will eventually make an impact on the market.
“I’m sure they will come around. It’s just going to take them a bit longer,” he said.
In a recently released report, telecom consultancy The SeaBoard Group says that Wind Mobile’s actions are a classic display of an ill-thought out plan.
“We believe that it shows evidence of a company under extreme pressure to get to market before it was fully ready and of a flawed launch plan,” reads Wind in the Willows: Lessons from a Premature Launch. The report also highlights the negative impact of the ownership review, calling it more than an emotional seesaw, “it was a significant disruption to corporate focus.”
This, according to SeaBoard, “appears to have left some significant holes both in the customer value propositions and in operational and network performance.”
The current subscriber count at Wind Mobile is unclear, but some estimates have it ranging from 10,000 to 30,000. Fan has pegged a first-year subscriber base at about 120,000.
