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Mobilicity to distribute through HMV Add to ...

Discount wireless provider Mobilicity has added music retailers to the growing list of places Canadians can buy cellphones - a list that includes pharmacies, movie rental stores and subway news stands.

In a distribution deal announced Tuesday, Mobilicity said its mobile phones will be available in HMV stores across Ontario in time for the busy holiday shopping season. Another distribution agreement will be announced soon with a "major Canadian department store," Mobilicity president and chief executive officer Dave Dobbin said in an interview.

The partnership with HMV Canada Music Stores Ltd. is Mobilicity's second major distribution deal in recent weeks, having inked an earlier agreement to have its phones displayed in some 7-Eleven convenience stores.

The Mobiliticy deals are part of a spate of similar announcements as wireless companies - from new entrant Wind Mobile to the country's largest wireless player, Rogers Communications Inc. - seek to position their devices in the public eye.

Mobilicity took its time in partnering with HMV and 7-Eleven. Its rivals were quicker to sign deals: Wind Mobile partnered with the now-ailing Blockbuster video rental chain, while discount provider Public Mobile has its phones sold in Gateway Newstands in public transit stations and shopping malls.

"It's not a race … it's about finding the right partners," Mr. Dobbin said. "We took our time. We talked to a lot of potential partners." The customer demographics for Mobilicity and HMV "basically match," he added.

Neither the HMV deal nor the one with 7-Eleven are exclusive arrangements, leaving the door open for those chains to sell other wireless brands, as Loblaw Cos. Ltd. does with its Mobile Shop (which sells Wind and Public Mobile phones, among others, but not Mobilicity devices).

Canada's entrenched telecom providers have advantages over their new competitors; two of them, for example, bought other retailers to gain larger footholds in the market. BCE Inc. purchased The Source, while Telus Corp. acquired the Black's Photography chain. Rogers, meanwhile, has struck a trial distribution arrangement with Shoppers Drug Mart Corp. And cable companies launching wireless networks are pitching to their existing customers.

The new wireless companies, which offer a variety of discount services without contracts or credit checks, are looking for customers elsewhere.

"Quality distribution means different things to each of those companies," said Iain Grant, a telecom consultant with the SeaBoard Group. "The HMV [deal]would be going after whoever buys music from music stores and not online, which would suggest … people who are either too young or too credit-challenged to get credit cards, which happens to be Mobilicity's sweet spot."

Dvai Ghose, an analyst with Canaccord Genuity, said wireless providers are being forced to be creative about how they market cellphones. Buying one is "a much less sophisticated decision now," he noted. But he said he hasn't seen strong evidence that the retail partnering strategy works - that consumers, for example, will toss a cellphone in with their groceries or their Friday-night movie rental.

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DISTRIBUTION DEALS

Wireless providers have struck deals to distribute their cellphones in retail outlets:

Mobilicity: 7-Eleven, HMV

Public Mobile: Gateway Newstands, Loblaw

Wind Mobile: Blockbuster, Loblaw

Telus: Black's Photography, Loblaw

Rogers: Shoppers Drug Mart, Loblaw

Bell: The Source, Loblaw

 

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