RoW International Short Takes
News | August 19, 2002
Microcell unveils new pre-paid pricing strategy
Microcell Telecommunications Inc. has introduced a new 15 cents per minute pricing plan for pre-paid subscribers. The company is offering a $15-voucher with a validity period of 15 days and a $30-voucher good for 30 days. Beginning September 16, Microcell will shift from per-second billing to per-minute billing for all pre-paid airtime. The company will continue to offer pre-paid airtime with longer validity periods: $10 for 30 days and $25 for 60 days. These vouchers will offer airtime at 30 cents per minute. During the second quarter, Microcell added nearly 43,000 subscribers with approximately 12,000 signing up for post-paid airtime packages. The company continues to experience a significantly higher churn rate than its competitors, posting a blended monthly churn rate of 3% compared to 2.3% in last year’s same quarter. In its financials, Microcell also indicated an inability to find business partners to launch its MCS operations to be carried out by Inukshuk Internet Inc. As a result, Microcell wrote down the value of Inukshuk’s MCS licences to nil. The non-cash charge was $223.4 million. The company also announced that it may not be able to satisfy certain covenants under its debt agreements, which raises the uncertainty of whether the company can continue as a going concern. Microcell has retained the services of Rothschild to act as its financial advisor.
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