BGR sits down with WIND CEO Ken Campbell
Canadians have long craved for a new wireless carrier to bust onto the scene and break up what is often described as the anti-competitive practices of incumbents Bell, Rogers and TELUS (aka “The Big Three”). Following Industry Canada’s 2008 auction of Advanced Wireless Services, the majority of hope was placed in a swaggering upstart which recently announced it would operate under the WIND brand name. But this Thursday, the Canadian Radio-television and Telecommunications Commission informed WIND that it that it couldn’t go live with its HSPA network. The reasoning behind the CRTC’s decision was that if felt WIND’s parent company, Globalive Wireless, did not meet the criteria set forth in the Telecommunications Act which stipulates all carriers must be majority owned and controlled by Canadians. To meet these requirements, at least 80% of the board of directors and voting shares must be controlled by Canadians and the company cannot be “otherwise controlled by persons that are not Canadian.” What the CRTC found was that Oracsom, Globalive’s Egyptian financiers, controlled 65.1% of WINDs equity, the Canadian rights to the WIND brand, carried the majority of the company’s debt and that liquidity rights were “inconsistent with the relative voting interests of the shareholders.” The situation is complex, but all is not lost for WIND. With this in mind, we sat down with WIND’s CEO Ken Campbell and asked him what the future holds.
Mike: Prior to the ruling, you were quite optimistic that the CRTC would approve WINDs launch given that Industry Canada had previously ruled that your ownership structure complied with the Telecommunications Act. What do you think caused the CRTC to rule differently?
Ken: What we do know is that Industry Canada approved us back in March, on March 13th, and the frame of reference that they used was pretty much the same as the CRTC. The two groups came to different conclusions, obviously, and right now what we are doing is reviewing what’s come out and assessing what our options could be. It’s a pretty sad day for Canadian consumers. It’s unfortunate, Canada needs competition and needs a new national wireless operator and this is a setback.
Mike: There has been a lot of talk about having Industry Minister Tony Clement and the Cabinet overturn the CRTCs ruling, something they are legally permitted to do. Are you actively exploring this option, and if so, are you fearful of any backlash?
Ken: I am not sure what you are referring to, but no, for our part, we are just looking at what our options might be and reviewing what the CRTC has come out with. I am not aware of what Minister Clement might have commented on today.
[Ed. Prior to our interview, Industry Minister Tony Clement publically stated that he and Industry Canada will be investigating the CRTC’s decision. Said Clement: “We are examining the CRTC decision very closely, and certainly we are still very much in favour of more competition in the telecom space for Canadian consumers. That’s why we opened up these contracts to other new entrants.”
Mike: What are some of your options as you understand it? Certainly there is talk of WIND aligning itself with…
Ken: At this time all of those things are just media speculation. As I said, we are looking at all of our alternatives. We are going to assess all of them very seriously and will determine what sort of action we can take. We have to review the CRTC ruling – there is a lot to it – and we are going to look at what our options which include many.
BG: Not being Canadian and looking at the Canadian landscape in terms of wireless carriers, the premise of what you set out to do seems so great. There have been rumors, and much of them have been confirmed, that there was to be a simple 3-tier price plan, great handsets, a great retail experience, etc. How important do you think the whole retail experience is to the customer and providing a great service?
Ken: I think the customer experience is absolutely important. Here we’ve got a situation where we pay twice as much as they do in the US, our minutes of use are half of what they are in the US, and wireless penetration is at 65%. Clearly it is a market that is under-developed and where customers simply overpay. The other thing is that in Canada our customer saturation numbers are extremely low. We’ve got a very disenfranchised and very frustrated customer base that is really ripe and in need of competition. The other thing you should know is that this country is dominated by three carriers, but if you look regionally, it is typically two carriers that dominate regional markets. Canada is effectively an oligopoly and in many regions pretty much a duopoly. There is definitely an opportunity with consumers and the numbers speak for themselves.
BG: Going forward, you were really hopeful from everything that we read…
Ken: We’ve got 800 employees. We’ve got retail staff, we’ve hired call centers, we have a brand, we have a great experience, and definitely, as you mentioned, we have some good price plans and a very solid proposition that will resonate with consumers. We’re definitely teed up and ready to go.
BG: Have you announced the price plans at all?
Ken: No, we haven’t announced them. We did announce that we have a few, three, and I think that customers will find them simple and easy to understand and, frankly, a great value.
BG: So, like you said, everyone is hired and things are read to go. Can you continue those operations in the mean time until you get approval, or does all of that have to stop now?
Ken: Well, we are assessing what our options are. But the network has been being built in Calgary, Edmonton, Vancouver, Toronto and Ottawa and our coverage was being deployed. What we are going to continue to focus in on is our operation and assessing what our options are with this unfortunate ruling.
Mike: Are you still allowed to continue the development of the network , or are you abandoning this work until you can get things sorted out?
Ken: We’re really assessing and evaluating our options right now.
Mike: So it sounds as if you are more focused on the legal matter at hand as opposed to continuing to develop the network.
Ken: Yes, it’s just prudent that we evaluate the situation and the ruling. Obviously to run our business we need the CRTC to approve it, so we will see what our options might be. Canada definitely deserves some competition here and so for our part we just have to focus in on the ruling and see what, if anything, can be done.
Mike: How confident are you that a compromise will be reached in the near future that would allow you to continue the development of your network and eventually launch?
Ken: It’s just not clear right now. It’s too early to say.
BG: Well, Ken, thank you so much for your time we really appreciate it.
Ken: Thanks very much for reaching out to us. I like your site.
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p.s. I’m often applauded for my utterly hilarious jokes.
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Do a bit of a search, and you will actually find a petition to dissolve the CRTC and replace it with a government group that is actually for the consumer.
I signed up for that myself, they’re aiming for 10000 names total.
Personally, I don’t completely mind Telus (they use Bell’s network there in Waterloo I believe, and should have their own towers there too). Maybe, just maybe, in a few months what with the new HSPA+ network they and Bell have built up, some real competition will start… but I think we all expect absolutely nothing to happen until the new guys start up their networks. Anyone notice how all but Videotron have the big 3 going after them?… and Videotron signed a roaming agreement with Rogers to allow coverage outside of Quebec?
Thats a shit load of jobs they have ready to go that the CRTC is blocking. Thats some piss poor actions on their part.
Blocking jobs and a service that will most likely provide cheaper products and service. Shame on them.
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A lot of us share that same opinion of the CRTC.
so 7 major brands and a handfull of smaller ones.
Adding another is just going to confuse consumers.
they will have cheap plans at first, then figure out that its costing them to much and then increase prices later on.
Im sticking to my provider Rogers. they treat me well and has proven the quality of their network is reliable every day!
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Virgin is Bell. Fido is Rogers. Solo is Bell. Koodoo is Telus.
We have the appearance of competition but that’s all.
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First and foremost, I’m sorry but after how often my dad’s corporate blackberry on Rogers loses signal versus my personal blackberry on Telus, not to mention where I get signal that he can only dream about getting a whisp of a signal… i.e his cottage where he does spend a fair amount of time over the summer… or his home in the Toronto Beaches… or numberous elevators within downtown… I cannot help but laugh at anyone who honestly believes so blindly in those Rogers commercials.
I think this past year I have had my data interrupted only twice… once due to a severe windstorm, and once because my device needed to reset to the network. My voice calls have been dropped due to my previous handset being dropped way too much and not working properly (my new blackberry gets the exact same coverage and works fine in those same places) or my girlfriend forgetting that her particular phone cannot flip closed while on speakerphone without terminating the call. I didn’t know Rogers towers were windproof, that their devices glued themselves to your body until they could safely attach to another surface, or that they could predict that you did not mean to hang up the phone. (for those who couldn’t tell, that was sarcasm.)
I will give this much… as far as building and running a network goes, it does cost a lot of money. But it does not cost as much as the current incumbents seem to rake in each and every month. Let’s take this to scale here.
Let’s say everyone’s plan averaged $40 each month. and there were let’s say… 50,000 people on the network over the course of the first year (obviously they are aiming at much higher numbers but I am aiming really really low here). that is $200,000 each month. over a year, that’s $2,400,000 (2.4 million). In the first year. On only 50,000 new subscriptions. Will they lose money at first with my numbers? maybe, yeah, I don’t know what their staffing is like and what is to be paid and all. But as their network and customer service are proven to be reliable and competent respectively, more people will move their services over to the new guys, until they too are bringing in a lot more than 2.4 million each year.
And the obvious difference (I would hope) is that they would be giving a lot more for that $40 than Bell / Telus / Rogers do in the way of minutes and included services (i.e: text messaging / picture messaging / mobile browsing). People comment that we can’t have US style plans. But see, here’s the thing; if we are offered more within our plan, we are willing to pay more. Funny how successful Sprint’s $99 Unlimited Everything plan is. Yes it is $100 each month, but you get EVERYTHING that is essential at an UNLIMITED rate. If that was an option to me at say $120, I would sign up for that and still tack on $25 to be able to call all across north america whenever I wished and not be dinged long distance ever! why? Because I would be getting a better value! And sometimes value is really missed out on… especially by Rogers. I used to have their service a couple years back, I should know.
Adding another voice here is not going to confuse consumers. Right now, the big 3 rely on confusion in the marketplace it seems – you, for example, john, were incredibly confused as to the ownership / network leasing of Fido, Koodo, Mike, Solo, Virgin, PC mobile, Sears, Primus, etcetera… the only TWO large-size Telco companies in all of Canada that are not under the ownership of the big 3 are Sasktel and MTS (there are two others I believe, but they serve only northern Ontario, and even then are not incredibly large). However, even these ones have roaming agreements with Bell and Telus. And MTS just signed an agreement with Rogers for its new HSPA network. So in essence, they too have to answer to the Big 3.
The newcomers will have been the first groups to launch within Canada that would not need to answer to any of the big 3 other than to temporarily allow roaming. I don’t know about you, but I think that is the least confusing part of it all. New, fresh ideas that weren’t just the big guys in flashier clothes or walking a new dog.
I’ll admit, I’m sticking with Telus… but only because I know I will be able to talk to them and have them bring my rate plan down as the newcomers become established and begin to take hold of customers. After all, if they didn’t, what would stop me from taking the $250 I spend each month for my and my girlfriend’s phones (combined, folks, I wouldn’t pay that much each month for just me) and walking over to one of the new guys to spend maybe only $175-$200 for the same services?
Virgin, fido, solo, and Kudoo can hardly be called major brands. Come on now. Even so, I find it hard to believe that 7 is the breaking point at which Canadians would lose their minds. I don’t limit myself to 7 restaurants, or 7 clothing brands. On that note, have you heard Starbucks orders recently?
When it comes to brands, the consumer is more than well-fitted to make up their minds.
Another point, Solo is owned by Bell
Fido is owned by Rogers
Kudoo is owned by Telus
And not that anyone uses Virgin, but it is also wholly owned by Bell.
Regardless of Canadian confusion, your 7 has once again been brought down to three.
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Those are not choices.
My friend pays $92 a month at Robbers for an iPhone plan, and that does not include caller id!
The lack of competition within Canada hurts consumers. It’s ridiculous in this day and age to have to pay $8 for caller id alone.
Uncle Ted may have done good for his pockets, but he screwed consumers. Not that Bell and Telus are much better….
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So seven brands and another is going to confuse consumers? The whole point of the smaller companies is to confuse the consumers in the first place. The big three own all of those smaller companies.
Let me guess, you work for Rogers?
Wow…I don’t know…either this kids hands are tied or someone else is running the show cause he didn’t really say anything of value and he’s not exactly on the ball with that tony clement comment. I knew about it. The only think ken said throughout that whole interview is ‘I don’t know’ and then proceeded to regurgitate a bunch of facts (that I also knew). I think this ken is a perfect front man for company that wants to run outside of the north american business system. He doesn’t know too much, and he doesn’t need to know too much. Someone else s running the show, that’s for sure. But thanx for the insight brg
EXACTLY! The true power centre at Globalive is overseas at Orascom. The Canadian leaders are just puppets.
Canadian citizenship/passports are “cheap” and can be had everywhere. This one should be easy.
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Without a doubt (if they are allowed to eventually operate) they will come in with a huge splash to build a client base but how long can they maintain a low price point before they can no longer afford to run with that business model?
The truth of the matter is Canada is larger than the US in landmass with about 1/10th the population. It costs Canadian carriers more to build out their network but their return is limited based on purely the amount of clients they can possibly gain. If ONE company in Canada had every citizen in Canada signed up to that company their client based would still be 1/3rd of Verizons. I dont mean to be a hater but its not possible to operate and turn a profit with plans similar to those of the US companies.
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How can you say Australia has the same land mass? Canada is much larger than Australia
Quick online search….
Population Density
Canada: 3 people per sq.km
Australia: 2.84 people per sq.km
Area land mass:
Canada: 9,984,670 km2
Australia 7,617,930 km2
Yes Canada is bigger, but slightly more densely populated, I wouldn’t call it a big difference, both countries could be used to compare cell phone industries.
Besides 90% of both Countries population are concentrated in cities, so creating the cell tower infrastructure is just the same as any other country. Its only in the rural areas that it gets expensive.
That is a totally irrational argument, populace versus size of a nation has nothing to do with, cost of service. Like Ken mentioned Canada is dominated by a few incumbents, who have had established networks for many years. Ontario and Quebec alone contain 62% of the Canadian population, Alberta and BC contain 24%. This is not a issue of cost of nationwide coverage as the majority of the people live in populated clusters. As for population alone, a quick check makes evident that small nations like Sweden, Finland, Norway, have the lowest rates of service on a global scale. The issue comes back to the well known concept of competition. Wind’s business model is sound because it focuses primarily on major cities, that is its target, which by no coincidence also contains the most amount of accessible consumers.
You dont get it at all. Do not compare Finland because they dont have the land mass that Canada has.
Im sure if a carrier came out and launched in the “cluster” areas and there only their costs would be lower ad could offer you better service – I recall a company by the name of Fido doing this and not being able to compete. People loved the pricing, complained about lack of service, Fido could not compete, launched an all you can talk plan in the effort to acquire new activations to lift their subscriber base and value for a buyout.
Clearly you don’t understand that it isn’t as simple as the analogy you provided.
Have a look for yourself around this site;
http://www.nationmaster.com/graph/med_mob_pho_sub-media-mobile-phone-subscribers
It is evident that the largest country in the world (Russia) and the third largest (China) have the most cell phone subscribers, and even Australia which is the 6th largest country in the world has 18.4 million subscribers out of only 21 million, all while these nations have much lower rates than Canada. Going back again to my original statement, it not the size of the nation that determines the cost and/or number of subscribers and the ability to deliver service to them. Given the geographic fact that ‘most’ people live around borders and coast lines and not in Baffin Island in Canada, a wireless carrier’s coverage does not have to span great distances in order for it to reach millions of people and gain a consumer base.
I.E. Wind does not need to provide coverage for all of Canada, it can easily reach a majority of people and hence keep initial costs down and still be profitible and competitive.
There is NO excuse for Canada to have the 3rd highest cell phone rates in the world, none.
The land area that must be covered in order to attract customers absolutely has an impact on the cost of providing the service. It costs more to cover more space. Now, stop looking at purely quantitative concepts and also examine qualitative consumer behaviour. Consumers expect coverage even in areas they have no certain intent of visiting. Its not rational, but consumers rarely are. Therefore covering only urban areas is not an option. In order to be relevant a carrier must be able to participate in the “mine is bigger than yours” battle.
Now, it is true that a good portion of the population is located in urban centres. However, this only means that as carriers expand coverage outside these centres they will experience decreasing returns on their investments. Which means that their total costs start to rise disproportionately to the rise in addressable customers (POP’s).
Canada is a huge country with a small population. The cost of providing service can never be as low as a country such as Sweden or Finland. Never. Canadian carriers would kill for a cost model like small countries have.
Do you really think Rogers operated in the far North of Canada? No one is going to build a network covering all of Canada. They only build a network where people live.
I bet whenever you go travel north and there is no coverage you will bitch and complain
mangenius says:
October 31, 2009 at 7:43 PM
Guys I dont want to burst your bubbles but I dont see how WIND can change anything in Canada.
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mangenius is about the only smart person here – The US has what – 4 national carriers and some regional players for 300+ Million people – Canada has 1/10 the population and people want a 4th national player…..?
yes and a 5th, 6th, 7th…..the more the merrier
Go Wind!!!! I want you to operate well in Canada, we here in the USA will be watching you intently also!
i was hoping for a bit more from wind about what they are planning on doing but i can understNd that they have to play their cards close to their chest. this ultimately does mean that they will unfortunatley miss the very important holiday season.
i honestly do believe that canadians do deserve a more competetive wirelesss industry. the lawmakers (ie clement or others in the house of commons) may not want to deal wih this issue head on because this is a bit of a nationalistic issue.
the thing that is most perplexing is that if you happen to remember at&t used to operate in canada in the late 90s! talk about foreign ownership!
the law of 80% ownership is also a bunch of bullcrap. and the law needs aome adjusting to be more modern and competetive. hopefully the tories will be brav enough to fix that soon.
i would love to get an iphone or blackberry for my own personal use but a staring monthly fee of close to 70/mo for a full feature set incl vm cid data etc thats juat way too much and totally out of control!
the argument that canada is such a huge country with such a small population is valid. but the country is never going to get 100% coverage. but the fact is that we are forced to overpay. the statistic that only 65% of canadians have a cell phone really does speak volumes about the oligopolistic situation we have here. its not that canadians are are rejectors at all. iys just that its simply too expensive and the big three are charging as much as they can get away with.
we need more choice! ultimately wind will be be approved but not for 2009
LOL… He likes your site, BG! That’s cause you haven’t revealed any inside info on him yet. He’ll be a hater soon enough.
BJ
I was only hoping for WIND to launch just to shake things up. I already have a good plan with my current provider. Of course my plan could be cheaper, but I’m getting a decent deal without credits.
Canadian cellphone rates among world’s worst
http://www.cbc.ca/technology/story/2009/08/11/canada-cellphone-rates-expensive-oecd.html
USA, Canada, Spain Win Title for Most Expensive Cell Phone Bills
http://cell-phone-providers-review.toptenreviews.com/usa-canada-spain-win-title-for-most-expensive-cell-phone-bills.html
The big 3 have been shoring up their distribution channels (ie: cut down stores, laid off sales reps / call centre reps, etc) and restructured their remaining reps’ commissions (ie: pay cuts) and here we have Wind hiring 800+ Canadians, opening stores, call centres, and basically create employments for hundreds of Canadians during tough times. And what does the CRTC do? Take their sweet ass time reviewing and basically tell Wind to **** off because they meet some BS rule.
Clearly, the CRTC is influenced. This must stop.
*didn’t*
Why dont any of you understand – its not physics..
Verizon – Id like 5,000,000 droids
Moto – sure $10 each please
Bell/Telus/Rogers – Id like 50,000 droids
Moto – sure $25 each pease
Verizon – Shit guys we need to launch LTE to our clients this build out is going to cost us about $700,000,000 but we still have about 90,000,000 clients to help us absorb this cost and keep our rates lower
Bel/Telus/Rogers – Shit guys we need to launch LTE to our clients, this build out is going to cost us about $900,000,000 but we still have about 6,000,000 clients each to keep our prices as low as the Americans.. oh wait
Prices are obviously not exact but if any of you want a picture drawn out next let me know
We don’t understand because we know what population density is (and yes density is a matter of physics), which will subjugate the areas of interest for cell phone carriers.
Spare us the picture as it is already drawn:
Russia; http://tinyurl.com/yjkb5ok
Canada; http://tinyurl.com/ykjv3us
US; http://tinyurl.com/yhybdur
Australia; http://tinyurl.com/yz8qamf
The United States has far more evenly distributed demographics than Canada, the comparison is nullified, the rest is self explanatory.
Ur thick you know that right? Tell me how many people were with Fido and complained about coverage? That was because Fido only provided coverage in highly densilated areas and if not for their business plan – offer unlimited gain subscribers and sell to the highest bidder – they would have folded
Listen, I agree with you that people can’t expect to have price plans exactly the same as the US or Scandinavian countries, but you simply can’t make the argument that the current rates vs. returns that the average Canadian is seeing is anywhere near reasonable.
I don’t think it’s too much to ask for some better value for your money, and I don’t think anything you’re saying has anything to do with the fact that more competition will go a long ways toward helping that.
I just think more competition in Canada will not be a good thing. I know it sounds stupid but as I see it the costs are high and the market base is small. You add in a 4th and 5th and 6th company you are splitting an already small base amongst more people.. you wouldnt be able to afford to run the company and provide a return to your shareholders. There just isnt the room for this
Oracsom, Globalive’s Egyptian financiers, operate wireless networks all over the word; Greece, italy, Korea, Pakistan, etc… Their buying power is much larger than what the “Big Three” have today, and therefore has a cost advantage over the other three. They also have the ability to make a huge profit in under-developed countries where people pay under $10 a month for wireless service.
If Industry Canada reverses their decision, this will impact the ownership structure of the Big three. The big three will be forced to merge or pimp majority stakes to US carrier like AT&T. Than Canadians will be complaining they no longer have a national wireless company anymore.
Canada is already selling their Oil Sands & Mineral assets to China, their Agricultural and manufacturing, industry belongs to Americans, their Fishing Industry belongs to Europeans, etc.. so perhaps their long term goal is to sell their wireless interests as well.
Been following BGR’s articles for so long and I guess “its about time” that they meet a CEO and have a snazzy-chat along the way
Maybe in the future, you guys, can do this with Mr. Ballmer (MS CEO) and catch a glimpse with his “halloween-like face” and his samurai-showdown vid.
hilarity link: http://bit.ly/Halloween-face-fit-for-an-ceo
There’s no reason to give all the credit to engadget “e-interview”, right?
in the 1930’s canada passed a price discrimination law, this law has changed very little since then, but it was put in place so that all canadian companys had a fighting chance against one another. now knowing that, you may have noticed as of late all advertised plans from every company, even tho they may be worded differently or put together differently always add up to similar amounts. this is not done out of collusion or some scheme by the big 3, its cause they have to obey the law. yes the saf seems to be a cash grab, but that amount was agreed upon by all the companies, now it dissappears..but not really cause its now integrated into the price of plans. every company has a matching advertised price plan, even the discount brands. now with the inclusion of wind mobile, they will have to follow suit as well. read up or google the canadian competition act or the canadian price descrimination law it’ll make you think about everything you’ve ever price compared in canada.
UGH