Limited handsets a concern as Wind rebrands: analyst

Shaw Communications Inc.’s Wind Mobile will be rebranded as Freedom Mobile and its LTE roll-out will come sooner than expected in two cities, the company’s CEO said Monday. The move comes despite some analyst concern about the availability of handsets compatible with its spectrum. Alek Krstajic made the announcement at a press conference in Toronto. He said the rebranding was a fresh start, part of an effort to eliminate “baggage” associated with the Wind name and to make the company, which was previously held by foreign owners, more Canadian. He also revealed that the company’s new LTE network, operating on its AWS-3 spectrum (purchased last year), will launch Nov. 27 in Toronto and Vancouver, which he said was sooner than “most people were expecting.” According to a Monday press release, the company will sell two compatible handsets: LG Corp.’s LG V20, which is already available, and ZTE Corp.’s ZTE Grand X4, which will launch next month. It added the lineup of compatible devices with its LTE network will “expand substantially and quickly in 2017.” LTE coverage for Freedom’s remaining footprint will be completed by the fall of 2017, the release said. Still, because the V20 is the only “notable” currently available handset with AWS-3 compatibility, there is some concern about handset supply, Canaccord Genuity analyst Aravinda Galappatthige said in a Monday note. He noted that AT&T Inc., which owns the AWS-3 spectrum in the U.S., expects to deploy the spectrum in 2017 or 2018. “Hence the adequacy of handsets remains an issue in the near term,” he said, adding “we wonder how much traction can be achieved until there is a broader array of handsets.” That won’t be an issue in some parts of Eastern Ontario, where the company’s LTE network will use the region’s AWS-1 spectrum, Adam Shine, an analyst with National Bank Financial, wrote in a Monday note. Galappatthige also said “considerable investments” need to be made “internally as Wind continues to ramp up its operations,” such as to its billing, marketing and customer service. He previously said that Shaw’s chances of competing for wireless customers are dependent on improvements in its “network quality” and customer services and processes, both of which seem to be part of the rebranding effort. But Shine noted that customers may be “enticed by Freedom’s discounted LTE offerings” and “more material interest will likely develop as the company’s handset lineup expands, especially once a future deal is achieved with for its iPhones.” While Freedom’s LTE plans will be higher at $45 versus $40 for the 3G network, Krstajic noted that it is still “a significant discount” compared to the incumbents and even their flanker brands. He added that he doesn’t foresee there being heavy discounting on prices. Barclays Capital analyst Phillip Huang said in a Monday note that he believes Shaw did not use its own name to rebrand Wind because closing the network quality gap with the incumbents would be unlikely “for some time…thus, rebranding to Shaw would dilute the brand for its cable business, which has a superior broadband network” versus Telus Corp. Shaw purchased the company earlier this year. Wind topped one million subscribers in the third quarter, its first quarterly report since 2014, this year. Huang also noted that Freedom will remain focused on its marketing strategy of catering to “mainly younger” customers, “who are willing to trade off handset selection and network quality for lower monthly bills.” Krstajic said he believes that the wireless industry in Canada can sustain a fourth player in every market. “We felt it was time for a brand to emerge that was all about transparency…freedom from hidden fees, freedom from gouging, freedom from all the things that customers don’t like, like contracts.” “You can say, ‘I don’t like…’ and put another company’s name right after it, but it’s hard to say, ‘I don’t like Freedom.’” — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Limited handsets a concern as Wind rebrands: analyst

Broadcast | November 21, 2016

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Limited handsets a concern as Wind rebrands: analyst

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