TORONTO (Reuters) - Wind Mobile, one of the smallest players in Canada’s wireless market, said on Thursday it was offering a new low-cost unlimited U.S. roaming plan, a traditionally lucrative niche for its much larger competitors.
Wind, backed by Europe’s Vimpelcom Ltd, said it would offer customers unlimited data, talk and text while traveling in the United States for C$15 ($13.42) a month.
The offer is a direct challenge to Canada’s three largest mobile operators - Rogers Communications Inc, BCE Inc’s Bell, and Telus Corp - who charge much more to keep their customers connected while south of the border.
“While wireless prices in the Canadian marketplace remain very high, we at Wind Mobile continue to challenge expectations and offer our customers real value,” Wind’s chief operating officer, Pietro Cordova, said in a statement.
Wind’s gambit could force its larger rivals to re-think their U.S. pricing, which would in turn eat into their profit margins.
It will “probably succeed in dropping roaming rates somewhat, however I’m pretty dubious about this driving subscriber growth,” said Ryan Bushell, a portfolio manager at Leon Frazer, which holds positions in the three big telecoms.
Rogers, Telus and Bell did not immediately comment on whether the move would prompt them to alter their U.S. plans. The three do not currently offer unlimited data, talk and text U.S. roaming plans.
Bushell said the established operators are somewhat protected because they sell customers discounted bundles of Internet, television and landline services in addition to wireless, and that most Canadians don’t regularly need U.S. roaming plans.
Shares in the trio were all trading higher in afternoon trade on a broadly positive Toronto Stock Exchange.
The premium U.S. travel pack offered by Rogers, the largest Canadian wireless carrier, is a C$300 add-on that gives its users 500 minutes of talk-time, 1 gigabyte of data and unlimited sent text messages.
The cheapest Rogers U.S. travel pack for talk, text and data is currently C$40 a month. And in comparison, it offers just 50 minutes of talk-time, 200 megabytes of data and unlimited sent text messages. Bell has separate C$20 add-ons for talk and text.
Telus’ top-of-the-line U.S. travel plan is a C$65 add-on for 300 minutes of talk-time, 300 MB of data and unlimited text messages. Bell offers a C$30 voice and text package with 100 minutes of talk, 1000 sent text messages, and unlimited incoming messages. It sells a separate C$50 pack for 500 MB of data.
STILL A STRUGGLE
Wind, operated by closely held Globalive, launched its service in late 2009 after acquiring airwaves in a 2008 auction in which the government restricted Bell, Telus and Rogers’ bidding in order to stimulate competition.
It has more than 650,000 customers mostly in the provinces of Ontario, Alberta and British Columbia, but is still dwarfed by the big players, which each have between 7 million and 9.5 million wireless customers.
The company had to withdrew from an auction of airwaves now being conducted after Vimpelcom declined to provide the necessary financial support.
Wind said it reached agreements with several major U.S. carriers in order to offer the deal, without identifying them.
But in announcing the U.S. roaming deal, Wind hinted that it was Vimpelcom’s scale - with 220 million customers in 17 countries - that had made it possible.
($1 = 1.1180 Canadian dollars)
Reporting by Morgan Sharp and Euan Rocha; Editing by Stephen Powell
Our Standards: The Thomson Reuters Trust Principles.