Public Mobile: “This is about fat cats looking to get fatter”

publicmobileimageEarlier in the week we learned that Rogers has requested the CRTC to look into the foreign ownership of both Dave Wireless and Public Mobile. It seems the impending launch dates of the new wireless carriers has the incumbents getting a bit worried. Reports have shown that an estimated 8 million subscribers will be switching from Rogers, Bell and TELUS by 2014.

Specifically when it comes to Public Mobile, Rogers stated their ownership is “even more confusing. It filed two beneficial ownership structures before the beginning of the auction… However on May 15, 2008, just 12 days for the start of the auction, 6934579 Canada Inc filed a new beneficial ownership structure with Novacap replaced by three new entities Rho Canada Ventures LP, 6976387 Canada Inc. and BMO Capital Corporation. The five foreign firms remained. Apparently the controlling Canadian shareholder was replaceable while the non-controlling foreign shareholders were not. Who controlled the bidding is unknown”.

In response to these claims, Alek Krstajic, CEO of Public Mobile said “This is about fat cats looking to get fatter. Industry Canada created an auction to fan competition and now the incumbents are making a futile attempt to stem the competitive environment. This would only serve to keep prices high and reduce competition which hurts customers.”

Krstajic continues with “Public Mobile is backed by multiple Canadian investors including an investment of $50M from OMERS private equity, making them the largest shareholder in Public Mobile. OMERS commitment to Public Mobile was publicly announced last January and is no secret to Rogers. Rogers simply chose to ignore this information and intentionally mislead the CRTC.”

Public Mobile purchased G Band license and only spent $53 million, however they will reach 19 million people in Ontario and Quebec. They will also offer unlimited flat-rate talk and text packages for around the $40 a month price point and have always said from the beginning that their market is the “value conscious segment”.