TSX Commentary

WIND launched service in Toronto on Wednesday morning and announced its various plans, pricing and handsets. WIND has 44 locations in Toronto (not all open yet), including 14 company stores, 13 Blockbuster kiosks, and the rest mall kiosks. WIND will expand to Vancouver and Edmonton in early 2010. Overall, the launch had a few hiccups (not all of the stores were open, payment problems, a congested website) but RBC CM was nonetheless impressed by the 5-day turnaround since receiving launch approval from the Government last Friday. While WIND could have waited until more stores were ready, the company effectively leveraged all of the newspaper coverage from its CRTC battle. RBC CM’s channel checks suggest WIND customers are generating $80 ARPU, targeting high-end customers. WIND has three voice plans ($15, $35 and $45) and four data plans. RBC CM visited a few stores on Wednesday and discovered that most customers were buying high-end phones (the Blackberry
9700) and were opting for the $45 unlimited national calling voice plan and $35 unlimited data plan. With customers generating $80 ARPU, which is actually higher than the incumbent postpaid averages, WIND is far from a disruptive discount price carrier targeting the 30% of Canadians without a cellphone, but rather seems to be a bigger threat to mid-to higher-end incumbent customers as well as an attractive wireline-replacement service. WIND launched three voice plans, consistent with the plans/prices leaked on the Internet. The plans offer an attractive discount to incumbents and come with no contract and the first month free. The $15 plan (100 minutes) is pretty close to existing pricing, with a few extra perks. The $35 province-wide plan is interesting, but customer reps were quick to upsell to the $45 plan, noting that once voicemail ($5) and text ($5) are added, the price is the same. All plans include unlimited WIND-WIND customer calling. Outside the Toronto calling zone, customers on all three plans are subject to a $0.25/min charge for out- and in-bound calls, $0.10 for SMS, and $0.10/25kB for data. For customers who travel, this could be a big variable cost at the end of the month. Non-Blackberry customers have the choice of doling out $35 for unlimited data or paying high per-use costs: $0.10/25kB, which would mean $4 for a 1MB attachment, or $0.60 per web page, by RBC CM’s estimate.