CATHERINE McLEAN
Globe and Mail Update Published on Tuesday, Jan. 23, 2007 8:49PM EST Last updated on Tuesday, Mar. 31, 2009 9:54PM EDT
The country's newest wireless company, Amp'd Mobile Canada , has decided to give its rivals an extra jab by launching its service on March 14, when cellphone numbers become portable.
"We're going to be the only people in the market with nothing to lose," Chris Houston, president of Amp'd Mobile Canada, said in a recent phone interview.
The company is entering the ring at a moment when the battle for wireless customers is about to intensify. Subscribers will soon be able to keep their phone numbers when they switch carriers, which may make some more willing to move.
The Canadian arm of U.S.-based of Amp'd Mobile Inc. is pushing into Canada through a revenue-sharing partnership formed last year with wireless giant Telus Corp. As a result, it's the other cellphone kings, Bell Canada and Rogers Wireless Communications Inc. that Amp'd Mobile Canada views as its chief competition.
Still, it's not as though Amp'd Mobile Canada will cast a wide net across the whole industry. Instead, it's targeting a specific group; young adults who are willing to fork out oodles of money on trendy ring tones, sports clips, and their favourite songs for their cellphone.
That unusual focus has not brought in mobs of subscribers at its U.S. parent. Since its launch a year ago, that company has signed up more than 100,000 customers. In contrast, the entire U.S. wireless industry added 16.3 million clients in the first nine months of 2006, a report from Merrill Lynch & Co. Inc. showed.
North of the border, Amp'd Mobile Canada probably won't have a big impact because it's addressing a market that is already highly penetrated, according to Brian Sharwood, a Toronto-based analyst at telecommunications consulting firm SeaBoard Group. "It's focused on switchers," he said.
What the U.S. company's strategy has accomplished, though, is to attract large spenders. It recently said customers' monthly bills, a measure known as average revenue per user (ARPU), exceed $100 (U.S.), and more than $30 of that comes from data revenue. U.S. carriers, on average, generate $53 in ARPU, with $5.60 coming from data, according to Merrill Lynch.
"In the States, you're seeing industry-wide data ARPU is $6, whereas we're achieving a $30-plus-data ARPU," said Mr. Houston, one of Amp'd Mobile's co-founders. "I think we're in very similar market conditions in the Canadian market."
Despite Amp'd Mobile's growth, however, data services over all haven't taken off in North America as in other markets. Some observers say high prices are to blame.
Amp'd Mobile Canada hasn't yet set its rates, but the goal is to be "price competitive" rather than a "price leader," Mr. Houston said. Still, he agrees that lower rates for data services would encourage use.
"Our hope is that we're going to get to a point in the Canadian market where we can start driving more consumer-friendly pricing," he said. "Obviously, the data we're doing and the partnership we have with Telus, this isn't to attract an enterprise customer that never sees their bill and doesn't care they're paying $8 a megabyte. We're trying to target the 18-year-old that's data hungry."
Of course, big wireless carriers are also rolling out data services, such as television and music. But Amp'd Mobile also produces its own content. According to Mr. Houston, data produced by Amp'd Mobile accounts for 35 per cent of the content used by its subscribers whether it's music tracks from Ice Cube or a series of animated clips called "Lil' Bush: Resident of the United States" that is being turned into a show on Comedy Central.
"Amp'd is more about mobile media than we are about mobile service or mobile phones," he said.
Amp'd Mobile Canada won't build its own wireless network, and will rely on Telus to handle distribution, customer care and billing, while it will be responsible for marketing and content. It will employ between 30 and 40 workers. The Canadian headquarters, in Toronto, will have a production studio, where artists will drop by and perform.
But the new kid on the block will have to watch its own back because it will soon be joined by a new rival focusing on the entertainment niche. Carriers will undoubtedly be lining up for Apple Inc.'s iPhone, which was unveiled this month and is the first cellphone to integrate the popular iPod.
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