Public Mobile wants cellphone-less consumers in Ontario and Quebec

2 hours ago

MONTREAL � A new cellphone company that will serve Ontario andQuebec is hoping to get lots of people talking, literally, with its $40a month unlimited talk-and-text plan.

Now called Public Mobile,the Toronto-based wireless company is one of several new players inCanada's cellphone industry, currently dominated by Rogers (TSX:RCI.B),BCE Inc.'s Bell Mobility (TSX:BCE) and Telus (TSX:T).

CEO Alek Krstajic says as many as 40 per cent of Canadians don't own a cellphone and the only reason for that "is cost."

PublicMobile was born out of BMV Holdings, which bought wireless spectrum orradio waves over which cellphone networks operate, from the federalgovernment in a recent auction.

Krstajic wants thesecellphone-less Canadians in Ontario and Quebec as its customers, busyyakking and texting with its no-contract, no-credit check plan by thisfall.

He added that having a mobile phone shouldn't be a privilege.

"Public Mobile's foundation is this unifying purpose of 'Everybody talk."'

Hesaid a $40 monthly bill is the "sweet spot" that will make mobilephones affordable, adding the monthly bill with Public Mobile onlywould be higher if a consumer makes lots of long-distance calls andadds features such as voice mail.

"The talk and text concept iswhat we're really focused on and are going to stay focused on," saidKrstajic, a former president of Bell Mobility and a senior executive atRogers Cable Inc.

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As a regional wireless carrier, Public Mobile'snetwork will be able to reach to nearly 19 million Canadians in thecountry's most heavily populated provinces along a 1,100 kilometrecorridor between Windsor, Ont., to Quebec City.

It isn't going tobother targeting Apple iPhone or Research In Motion (TSX:RIM)BlackBerry smartphone users and isn't concerned about consumers whohave lower-priced cellphone brands offered by Rogers, Telus and Bell.

"We're going after people who don't have phones," he said, adding the mobile handsets will range in price from $80 to $150.

PublicMobile will operate on what's known as the G block of the wirelessspectrum, which had raised concerns there weren't any cellphones thatcould run on it. It spent $52 million on this spectrum while other newentrants such as Globalive and Quebecor's Videotron (TSX:QBR.V)millions and millions more.

Krstajic made the company's firstcommercial cellphone call using the G block spectrum on Thursday inToronto to demonstrate that mobile phones will work on it.

Thecompany's chief technology officer Brian O'Shaughnessy said the Chinesecompany that's making the handsets, has tweaked them to work on thespectrum. He also said Public Mobile's wireless network will be capableof being upgraded to handle new technology.

Telecom analyst IainGrant said without the threat of Public Mobile and new playersGlobalive and DAVE Wireless Inc. (Data & Audio-Visual Enterprises),Rogers, Telus and Bell might not have budged on pricing.

"I thinktheir pencils wouldn't nearly be as sharp," said Grant, managingdirector of the SeaBoard telecommunications consultant group.

He also noted that Public Mobile will need a reliable network.

"It's all very well being cheap and cheerful but you have to also be there when your customers need you to be."

A consumer with a BlackBerry isn't in this company's sights, Grant added.

"Whatyou're really after is his son or daughter and his mother, and to goafter the consumers who are perplexed by the complexity of wirelessplans at present and give them something they can use and understandthat's not going to cost them a fortune."

The private equity armof the Ontario Municipal Employees Retirement System has announced itplans to invest $50 million in the company, becoming one of PublicMobile's largest financial backers.

Public Mobile's partners alsoinclude Americans Columbia Capital, M/C Venture Partners that havedeveloped a number of medium wireless carriers in the United States,such as Metro PCS and Leap.