Wind Mobile boosts subscriber numbers by 50 percent, but at what cost?
Canadian wireless startup Wind Mobile posted a 49 percent surge in new customers quarter-over-quarter, and now has 140,000 wireless subscribers.
Wind's primary financial supporter, Egyptian teleco titan Orascom Telecom Holding SAE, revealed the data in its third quarter financial results.
Wind itself is not pressured to reveal such statistics, but Orascom is. And because Wind's chief competitors, wireless entrants Moblicity and Public Mobile, don't have public companies owning major equity, they can keep their numbers secret.
The 49-percent number is much higher than that of the Big Three providers, though its arguable that the numbers are not comparable; established providers like Bell and Telus historically see see slower, more stable growth.
But at what cost do these new customers come at? Quoth The Globe and Mail:
After posting those results, analysts pointed out that Wind may have been buying the customers with costly discounts, such as a $150 offer to subscribers joining the company from other wireless providers like Rogers Communications Inc. But Anthony Lacavera, Wind's chairman, said at the time that roughly 35 per cent of the customers had arrived on the $150 discount offer, and that the majority of users were paying the full cost of service.
35 percent actually seems rather high to me, considering that would mean Wind offered more than 13,000 new customers the discount, totalling over $2,000,000 in incentives—and that's not including Wind's other deals, such as 50% off plans and add-ons for the first six months, a dangerous incentive considering there is no contract to bind users beyond that length, and especially considering they own the entire phone upfront (unless a user takes advantage of the new WINDtab).
As a startup competing against an established oligopoly, gaining new customers (particularly from those competitors) is a key priority. But how much should Wind be willing to sacrifice to meet short-term subscriber targets?
