Mobilicity CEO Jumps Ship as Entire Wireless Startup Space Threatens to Collapse

On Friday, Mobilicity CEO Dave Dobbin ditched his company. Six months ago, Ken Campbell abandoned Globalive Wireless, which runs Wind Mobile. Are these departures purely coincidental or are the wireless startups struggling harder than they let on?

Today, Canaccord Genuity analyst Dvai Ghose published a sobering report on Canada's wireless sector. His take? "The independent new-entrant model appears to be failing."

David notes that the differentiation factors with the startups are low prices and no contracts—overall, superior of freedom and value. But the one issue for consumers is that they must purchase their devices outright through these carriers, or with a contract-like "tab"—two options that have proven relatively unpopular. 

The 2008 spectrum auction was intended to create a burst of new competition in what had became a stale, stifling oligopoly consisting of Rogers, Telus, and Bell. But over the past three years, the Big Three have not lowered their prices and they have continued to amass new subscribers, in many cases actually raising their average revenue per user due to insanely high mobile data charges.

And that's not to mention billionaire Naguib Sawiris' decided disgust with our country's telecom sector. The Wind Mobile financial blacker called our telco operators "the most inefficient in the world" and admitted that he regretted investing here, and that if he could get out, even at a slight loss, he would. That stings.

All of this culminates in a pot that's heating up fast. What's the boiling point? When the government officially declares the rules of the 2012 wireless spectrum auction. If there is no spectrum set aside for these ailing newcomers, the Big Three will gobble it all up. At that point—barring a miracle—all that we've worked for will collapse into dust. As Dvai puts it, the startups are facing a "perfect storm." And we all know the odds of survival in those.

Vaughan, Ontario, Canada

We believe that Canadians deserve an alternative wireless experience that delivers better value, more freedom and most of all choice. Simply a better wireless experience No Term Contracts Unlike other providers that lock you into a term contract, Mobilicity has no term contracts or cancelation fees. We are so certain that you’ll love us and want to stay that we don’t have to force you – the... more

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Knowlton Thomas

Knowlton Thomas

Knowlton is the managing editor of Techvibes and author of Tempest Bound. Based in Vancouver, Knowlton has been published in national publications and has also appeared on television and radio. Previously he was an editor for New Westminster weekly The Other Press and served on its board of directors. When not working, Knowlton enjoys hiking, tennis, and martial arts. more

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