Wind Mobile seeks fresh start with name change, LTE service

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Wind Mobile is changing its name to Freedom Mobile, hoping to make a fresh start and ditch some old baggage at the same time as it prepares to turn on its new, faster network in Toronto and Vancouver.

The wireless carrier, which is owned by Calgary-based cable company Shaw Communications Inc., unveiled the new branding in Toronto on Monday and said it will launch LTE (fourth-generation or long-term evolution) service in its two biggest markets on Nov. 27.

These are the first major strategic moves the wireless business has made publicly since Shaw closed its $1.6-billion deal for the company on March 1 and management hopes they will mark a new step in the growth of the fledgling carrier. Three new entrant carriers launched after a 2008 public auction for wireless airwaves, but Wind – now Freedom – is the only one that was not sold to one of Canada's Big Three national providers – BCE Inc., Rogers Communications Inc. and Telus Corp.

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Wind was appealing as an alternative to the incumbent carriers, but since launching in 2009 – and throughout a troubled history that has included a number of different owners and management teams – the company has often faced complaints about poor network quality and customer service.

"There was some baggage over the years associated with the Wind name," the wireless company's chief executive officer Alek Krstajic said at a news conference. "We now have shed a lot of that baggage. We have a new network, we have new, committed owners in the form of Shaw Communications [for] the long run and we felt there was a need to have a fresh start and build our own brand."

In addition to building LTE, last year, Wind began replacing its 3G (third-generation) radio equipment in British Columbia and Alberta with new gear from Nokia to improve patchy service. Mr. Krstajic said the carrier has also been addressing customer-service problems and the time was right for a rebrand.

The company was also paying a licence fee for the Wind Mobile name to its former owner Amsterdam-based VimpelCom Ltd., a fee Mr. Krstajic said was going up as the carrier became more successful. The new brand, which features the same orange colour scheme as before with an accent of Shaw's signature blue, is about "transparency," he said.

"You can say 'I don't like…' and put another company's name after it, but it's hard to say 'I don't like Freedom,'" he added.

A pair of commercials played at the news conference featured a new mascot, Freddy the Freedom bear, which was designed by Jim Henson's Creature Shop, Mr. Krstajic said. In the ads, the company touted "freedom from overages, freedom from gouging, flat monthly fees, affordable everything."

However, the carrier does not plan major changes to the current plans and packages offered under the Wind brand (Wind customers will automatically be moved to the Freedom brand).

Mr. Krstajic said it is arguable that Wind/Freedom's prices are lower than prices at the Big Three and their discount brands, and added he doesn't want to spur a race to the bottom "where people go bankrupt and can't stay in business."

"You're not going to see us do anything crazy on discounting," he said. "I think the key here is to be patient for growth, impatient for profitability and, as a result, become the sustainable fourth player."

Mr. Krstajic said customers who sign up for new LTE plans – which are more expensive than plans for the 3G network – will enjoy a "super highway with no traffic on it whatsoever."

That is due in part to the fact that almost no one will be able to use it at launch. Wind is using wireless spectrum in the AWS-3 frequency band to build its LTE network, and this band has not yet been widely deployed worldwide. That means there are not many new handsets that are compatible with the frequency. It also means customers with existing smartphones cannot simply switch on LTE service.

Device manufacturers are increasingly including the band in their design plans. Freedom is launching with one AWS-3 compatible device and will have two in time for the holiday season, Mr. Krstajic said.

"If people want to take advantage of the benefits of a new network, they have to get a handset," he said on an investor call earlier this month.

Executives at Shaw have indicated they plan to eventually sell wireless services under the Shaw brand as well, but Mr. Krstajic said it was still too early for that. In the meantime, its network-wide upgrade to LTE remains on track to be completed by August, 2017, he said.

Barclays Capital analyst Phillip Huang said the rebrand "appears to be a smart marketing move, albeit not a huge one."

"We believe management's decision not to use Shaw for the mobile business reflects their expectation that closing the network quality gap with the Big Three will need some period of time," he added. "Rebranding to Shaw would dilute the brand for its cable business [in Western Canada], which has a superior broadband network versus Telus [Corp.]"

Canaccord Genuity's Aravinda Galappatthige said he recognizes the "magnitude of the market opportunity longer term," but remains cautious for now. He pointed to challenges such as the company's need to invest in internal operations like marketing, billing and customer service, as well as possible trouble gaining traction without a broad array of LTE-compatible handsets to sell or support.