A new digital-only MVNO that has acquired nearly $1 million CAD in seed funding is set to open a Toronto-based headquarters and wants to eventually forge a value-oriented partnership with an established operator.
During a recent interview with MobileSyrup dotmobile’s co-founders, Algis Akstinas and Alex Bauman, said the company launched its website on February 7th with the intention of soliciting feedback from Canadians and small businesses.
The company needs 10,000 online members to prove that this form of more affordable service is something Canadians want. As it stands right now subscribers can join for free.
The two say anyone can join and that members will get early access to dotmobile’s still-in-development app.
“We could have waited until 2020, negotiated agreements with a mobile network operator, which we know is difficult, but we chose to first launch our website and concept and then start talking to consumers to verify and validate our concept first,” Akstinas said.
Bauman said the goal was to make dotmobile a digital-online service that consumers can access via an app, giving them more control over their service.
“We aren’t going to open stores or operating call centres. It will all be done with an app on the phone. It will be still regular call and text, but everything you do, interacting with a service provider will be through the app,” Bauman said. “Not looking at that as a low-end experience because we think most application experiences that are done well are a premium experience.
Innovation Minister’s proposed directive helps dotmobile
dotmobile’s website launched a few weeks before Innovation, Science and Economic Development Minister Navdeep Bains announced a proposed directive to the CRTC to place greater consideration on competition, affordability, consumer interest and innovation.
This is the second time that the federal government has issued a directive to the Canadian Radio-television and Telecommunications Commission (CRTC) in 13 years.
Bains told MobileSyrup that the proposed directive was “prompted” as a result of specific decisions relating to Wi-Fi first MVNOs. Bains said that after the first decision was sent back in 2017 and a second one was released in 2018 “we felt it was a step in the right direction but more had to be done.”
While the proposed directive did not specifically outline MVNOs, industry leaders say it was clear that “the government is signalling a shift from prioritizing facilities-based competition in favour of alternatives like MVNOs.”
Akstinas said that it is great the proposed directive was put forth but wanted to make it clear that dotmobile isn’t being established as a result of it.
“We are not opportunists in this regard, we just read the market and we know the needs of the Canadian consumers,” he said.
Bauman echoed those statements and said the two were expecting “a bit more difficult road ahead” but that now “things are going well for us now early into the game.”
Taking a different approach to partnering with operators
Part of the decision to have more competition came as a result of the CRTC ruling that Ice Wireless’ sister company Sugar Mobile can no longer access Rogers’ roaming network to provide permanent, rather than incidental, wireless service for customers.
MVNOs sell mobile phone service by wholesale purchasing the use of another company’s existing infrastructure, then reselling service at generally lower rates. MVNOs are not a market force in Canada for wireless services due to the fact that the CRTC does not compel carriers to sell network use to providers that don’t build their own infrastructure, but there are hundreds of mobile MVNOs in operation in the U.S.
Right now, Akstinas and Bauman said they have not proposed any partnerships with the Big Three, Shaw or Vidéotron, but noted that all of these companies are aware of dotmobile.
It’s also worth noting that these two executives come from an extensive background in the wireless communications industry.
Akstinas has spent nine years in the industry and previously worked as the director of marketing and commercial strategy at Freedom Mobile and before that was at Wind Mobile (which was bought out by Shaw) for nearly seven years.
Bauman comes with 12 years of experience, previously having worked for Wind for five years and later at Freedom for three as the company’s manager of customer base management. He also worked at Rogers as a communications store manager.
Carriers are aware of dotmobile
Akstinas said the company is in the process of registering as a full-licenced MVNO with the CRTC, which he expects will get approved very soon. After which the company has a year to secure a partnership with an operator to function.
“We know that [the carriers] are aware of what we are doing, we don’t have plans to contact them this early though,” Akstinas said. “We know what it takes to make these agreements so to do things a bit different, we are going to consumers first and then come back with a more polished proposal to carriers and showing them how many consumers are wanting the affordable service.”
Akstinas also said he felt in the past the issue with Sugar Mobile involved a legal case and stated that dotmobile aims to take a different approach to partnering with a carrier.
“If you look at last year, there were lawsuits involved, our approach is different. We are trying to create value for operators by offering them a different business model to currently underserved segments, moderate use, seniors, youth, new Canadians and small businesses,” Akstinas said.
“In the past, if previous attempts were more confrontational, well we are saying ‘Come and work with us,” he said.
Opening HQ next month
Akstinas added that the company is opening their headquarters in Toronto next month with the intention of having eight total employees working for the company by the fall. They plan to scale up from there.
He also noted that the dotmobile has secured $940,000 CAD in seed funding.
The goal right now is to provide services to residents in Toronto and eventually grow those offerings across the country, says Akstinas.
He also added that initially there needs to be an office to be able to distribute SIM cards and the company “wants to create local partnerships” in order to do that.