WIND Mobile Fears Prompt Investors to Sell Rogers, BCE, Telus
Analysts continued to worry about the impact Wind Mobile will have on the performance of Canada's cellphone incumbents, issuing a series of downgrades and cautionary notes.
On the second trading day after the federal government overturned a ruling from the national regulator that will allow Wind Mobile to launch cellphone services, the market's mood is settled into a decidedly bearish one for Rogers Communications Inc., BCE Inc. and Telus Corp.
David Lambert, analyst at Canaccord Adams, has further cut his outlook on RCI shares to an outright "sell" just days after a downgrade to "hold." The analyst now believes Rogers' will see lower subscriber additions during 2010 and 2011 based on Wind's launch while monthly revenue per wireless account-holder will decline by $2.
Rogers earns about $66 a month per subscriber, the highest of the big three wireless firms.
"Investors should expect greater market disruption than previously assumed," said Greg MacDonald, analyst a National Bank Financial.
He said that Globalive Wireless Management Corp., which is the firm using Wind as is brand name, has aggressive subscriber targets and has committed over $1-billion in capital to the business.
The startup carrier said it is eyeing 1.5 million subscribers by 2012. "Globalive will have to take a more ambitious approach to distribution and pricing to justify a return on investment," he wrote in a note to clients on yesterday.
How ambitious? Dvai Ghose of Genuity Capital Markets expects Globalive to offer no-contract, flat-rate unlimited voice plans for about $40 a month with "unlimited" data plans at around $20. Adding it up, subscribers will pay $60 for unlimited voice and data.
He said the incumbents "may be forced to retaliate with flat-rate plans of their own. This in turn, could cap incumbent ARPU," or average revenue per user.
I actually did make sure I had no Telecoms in my porfolio before, Wind started, the Telecoms were good on their returns but this is what happens when competition comes around, its still hard to say what the impact will be especially on the long term.
How ambitious? Dvai Ghose of Genuity Capital Markets expects Globalive to offer no-contract, flat-rate unlimited voice plans for about $40 a month with "unlimited" data plans at around $20. Adding it up, subscribers will pay $60 for unlimited voice and data.
obviously big 3 going to lose marketshare..no doubt.
Especially with all the other new carriers joining WIND in 2010. Not to mention SHAW(Mobility) in the coming years. They will make a big splash when they join in, that I am sure of.
Come Visit The Farside, If you Dare! 
Reply With Quote
Originally Posted by sonny21
Bookmarks