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Pedestrians walk past a Wind Mobile location in Toronto on Tuesday, May 5, 2015. (Darren Calabrese For The Globe and Mail)
Pedestrians walk past a Wind Mobile location in Toronto on Tuesday, May 5, 2015. (Darren Calabrese For The Globe and Mail)

VAFA AKHAVAN

To shake up Canada’s wireless market, Wind needs a truly disruptive buyer Add to ...

Vafa Akhavan is founder and senior adviser at NueBridge. He has worked extensively with telecom clients but is not engaged with T-Mobile.

The recently proposed Shaw Communications acquisition of Wind Mobile for $1.6-billion is clearly a strategic play for Shaw. But any argument that the deal is good for Canadian wireless customers – an argument often used to win regulatory approval – is more rhetoric than reality. Real change in Canadian telecom and customer experience will happen with a disruptive and innovative force buying Wind. That’s T-Mobile, a U.S. carrier.

Shaw’s strategic realignment has an obvious objective: To protect its business from a changing landscape in media content and distribution. But the takeover is not about the customer. It’s about market share, revenue, profit and shareholder return. There’s no sin in that, of course. Canada is a democracy with a relatively free economy. Corporations should and must be profitable. But they sometimes forget that CEO also stands for customers, employees and owners.

Canadian carriers today are like the legacy U.S. carriers – few in number, with no dramatic differentiation in products and services. Yes, Rogers snared the National Hockey League, but that seems to have failed expectations. Who really needs/wants 4K mobile? Can you just solve my problem in a timely manner, please? I’ve been with you for five years, so may I please qualify for the same discount promotion as the new customer? Connectivity and bandwidth are table stakes. There isn’t anything really innovative or disruptive.

Unfortunately, the dynamics of the Canadian marketplace are not conducive to excellence in customer experience, the critical strategic imperative in the wireless industry. The financial results of excellence in customer experience management have long been proven. Canadian wireless companies have generally far lower scores than U.S. counterparts in the J.D. Power customer satisfaction studies, and telecom is typically one of the lowest-ranked customer satisfaction sectors.

We tolerate mediocre experience and service. So there’s a high likelihood that the Shaw acquisition of Wind will go through, but we should not have great expectations for customers. In fact, it may even erase the minor disruption Wind created in the market.

So here’s my proposed alternative: That Wind be acquired by T-Mobile instead. It’s a better fit in terms of business model, and T-Mobile would be a far greater innovator and disruptive force in the Canadian wireless landscape. Everything it’s done in the United States has been positive for the customer. There, it has emerged as a customer-centric company, something we lack in Canada.

Over the past few years, T-Mobile has launched dramatic new offerings, branded as the “UnCarrier” series. Under CEO John Legere, it has been transformed, disrupting U.S. telecom and making life simple and easy for its customers. Unlimited everything is the general direction. Great products and service at great prices. It’s Business 101. We could have the same thing in Canada if we wanted, but we won’t have it without disruption.

T-Mobile has the culture, talent, capital, network and scale to innovate and disrupt, generating dramatic net gains every quarter. That’s what competitors would fear. Mr. Legere, his right hand David Carey and Michael Sievert, his previous chief marketing officer and now chief operating officer, have initiated a brand, social and cultural transformation, something Canadian CEOs have difficulty or lack interest in doing.

Moreover, T-Mobile and Wind already have business model similarities and strong ties. Both companies offer deals on all-exclusive data, voice and text. Wind has unlimited global texting. T-Mobile has unlimited global texting and unlimited data in more than 120 countries. T-Mobile is the preferred partner in the United States when Wind customers travel south of the border. Mr. Carey sits on Wind’s board. So does Hamid Akhavan (no relation to me), previously CEO at T-Mobile International. T-Mobile’s market capitalization is three times that of Shaw’s, and that’s U.S. currency. Today’s 40-per-cent exchange makes the deal even more attractive financially.

Canada should inject a disruptive, innovative force into its telecom industry. What we have today is simply inadequate. In our tolerant, mild-mannered way, we simply acquiesce to mediocrity. We shrug our shoulders, because there is no real option. But if there were such an option, it would become like the dawn of the iPhone – no one knew they wanted one until they actually saw it. If we were offered genuine innovation and disruption in mobile services, it would be a major wake-up call for Canadian telecom, leading to a far more competitive environment.

Remember the resounding slap Cher delivered to Nicolas Cage in Moonstruck? “Snap out of it!” That slap is T-Mobile buying Wind.

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