Canada’s wireless industry is a cozy club with one of the highest ARPU rates (aka how much consumers cough up each month) among the world’s leading industrial countries.
Over the past few years, it has meant juicy profits for Canada’s three largest carriers – Rogers, Telus and Bell. In particular, Rogers has been humming along with its GSM network, which has given its first dibs on new products such as the iPhone, as well as lucrative profits from roaming fees.
Alek Krstajic is looking to crash this wireless party with a new low-cost wireless service that will be launched in the third-quarter in Ontario and Quebec. It will be a no-frills, flat-rate for people just looking for basic wireless service. The target audience is the roughly 25% of the population that doesn’t use a wireless phone yet, as well as people looking for cheaper service.
Krstajic can talk the talk with anyone within the telecom industry but it’s more than apparent that BMV is going to walk the walk with a solid group of investors, including a recent agreement from OMERS Private Equity to invest as much as $50-million. The deal is a feather in BMV’s cap given the current economic landscape and the fact this is OMERS first direct investment in the wireless sector.
Despite the fact Rogers, Bell and Telus have been rolling out low-cost plans recently, Krstajic is confident there’s plenty of room for BMV to carve out a viable niche. He believes what Rogers, Bell and Telus are trying to do with their no-cost plans is keep their existing customers from abandoning ship by giving the a place to go.
BMV, on the other hand, at the lower end of the market where he doesn’t think Rogers, Bell and Telus can or want to compete.
“I don’t think we will get squeezed. We have created a cost structure that can’t be matched by the incumbents, and they know that. As long as a disruptive player are build on a lower cost structure, it will succeed.”
OMERS has 50 million reasons to believe Krstajic is right.
More: Here’s an interview I did with Krstajic a few months ago about BMV.
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Alek Krstajic Rides High Again
Canada’s wireless industry is a cozy club with one of the highest ARPU rates (aka how much consumers cough up each month) among the world’s leading industrial countries.
Over the past few years, it has meant juicy profits for Canada’s three largest carriers – Rogers, Telus and Bell. In particular, Rogers has been humming along with its GSM network, which has given its first dibs on new products such as the iPhone, as well as lucrative profits from roaming fees.
Alek Krstajic is looking to crash this wireless party with a new low-cost wireless service that will be launched in the third-quarter in Ontario and Quebec. It will be a no-frills, flat-rate for people just looking for basic wireless service. The target audience is the roughly 25% of the population that doesn’t use a wireless phone yet, as well as people looking for cheaper service.
Krstajic can talk the talk with anyone within the telecom industry but it’s more than apparent that BMV is going to walk the walk with a solid group of investors, including a recent agreement from OMERS Private Equity to invest as much as $50-million. The deal is a feather in BMV’s cap given the current economic landscape and the fact this is OMERS first direct investment in the wireless sector.
Despite the fact Rogers, Bell and Telus have been rolling out low-cost plans recently, Krstajic is confident there’s plenty of room for BMV to carve out a viable niche. He believes what Rogers, Bell and Telus are trying to do with their no-cost plans is keep their existing customers from abandoning ship by giving the a place to go.
BMV, on the other hand, at the lower end of the market where he doesn’t think Rogers, Bell and Telus can or want to compete.
“I don’t think we will get squeezed. We have created a cost structure that can’t be matched by the incumbents, and they know that. As long as a disruptive player are build on a lower cost structure, it will succeed.”
OMERS has 50 million reasons to believe Krstajic is right.
More: Here’s an interview I did with Krstajic a few months ago about BMV.
Technorati Tags: Alek Krstajic, rogers, wireless