Mobilicity billed itself as Canada’s “fastest-growing” wireless upstart on Wednesday as it disclosed select details about its fourth-quarter and year-end results.
Privately-owned Mobilicity, which is legally known as DAVE Wireless, said it added 63,000 net subscribers in the fourth quarter of 2011, a period that included aggressive holiday promotions across the industry.
At least one financial analyst said the company’s net additions for the quarter easily surpassed market expectations. Mobilicity, however, declined to specify its year-end subscriber number.
Prior to the company’s release, some analysts suggested that Mobilicity had roughly 187,000 subscribers at the end of 2011, while rivals Wind Mobile and Public Mobile had approximately 408,000 and 199,000, respectively.
Mobilicity president and chief operating officer Stewart Lyons dismissed the 187,000 estimate, saying the company was “well beyond” that number.
“We had a very, very strong [fourth quarter]” he said. He later added: “I think, quite frankly, we’re far more disciplined in our sales process.”
While the company did offer promotions during the quarter, he notes they were limited-time offers. He also said that Mobilicity likely adds a higher proportion of its subscribers (compared to its peers) during non-promotional periods.
Mobilicity also released another key nugget of information, saying that its average revenue per user (ARPU), a key metric that reflects the average monthly bill, was “slightly over $30” for all of 2011.
Mr. Lyons, though, declined to provide a specific figure. Nonetheless, Mobilicity’s ARPU disclosure is interesting because rivals Public Mobile and Wind Mobile, also privately held, pull in less than $30 on average per subscriber.
In an interview last week, Public Mobile CEO Alek Krstajic said all new entrants need have their ARPU in the $30 range to be sustainable.
“While there is still a large gap in ARPU between incumbents and new entrants, Mobilicity’s ARPU is relatively high for an independent new entrant,” wrote Dvai Ghose, an analyst with Canaccord Genuity, in a note to clients.
“Incumbent ARPU in Canada is in the $55-59 range versus only the $25-30 range for independent new entrants and $45 for Videotron. ... Of course there will be much debate regarding the definition of subscribers and ARPU, but Mobilicity seems to have exceeded expectations on both fronts.”
Both Mobilicity and Public Mobile, meanwhile, also told the Globe that they are on track to becoming cash flow positive in 2013.
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