Data & Audio Visual Enterprises Wireless Inc. is joining Globalive and other new entrants into the wireless market and rolling out cellular service in Toronto in the spring under the brand name Mobilicity.
With a focus on the consumer market, the Canadian company, founded in March 2008, will sell BlackBerry and Nokia handsets and will not require binding contracts, the company said Tuesday.
Most Canadian carriers subsidize the cost of smartphones to consumers in exchange for signing up for multi-year service contracts, so in the absence of such contracts, any subsidies would be modest, likely in the $25 to $75 range, RBC Capital Markets telecom analyst Jonathan Allen said Tuesday.
After Dave Wireless launches in Toronto, service will also be rolled out later in the year in Vancouver, Calgary, Edmonton and Ottawa. The company signed a five-year deal with Ericsson to build a network using high-speed packet access plus (HSPA+) technology in the five cities.
"If you live and work in one of our cities and you're looking for the best wireless deal around, you're going to love Mobilicity," CEO Dave Dobbin said.
No details on pricing were unveiled at the company's event in Toronto on Tuesday, but the company did say they will offer a number of unlimited-use options.
The company is not pitching itself as a national carrier. Rather, it will have its own cellular network in some of Canada's largest cities and has roaming agreements with Rogers in Canada and T-Mobile in the U.S. for coverage in other areas.
"Though price points and plan specifics were not featured, based on the details presented and conversations, Mobilicity appears to be aimed at the lower end of the market," Allen said.
A recent OECD report found that Canadian cellular rates are the third-highest in the world, averaging $500 US per year for medium-use customers. A number of new entrants have emerged to challenge incumbents Rogers Communications Inc., BCE Inc. and Telus Corp., based largely on lower prices, ease of use, and simplicity of pricing structures.
Dave Wireless is one of several start-ups that bought mobile spectrum in a government auction in 2008. After the CRTC initially quashed the complicated ownership structure of rival Wind Mobile, Industry Canada amended that judgment and allowed the company to launch in late 2009.
Public Mobile and Vidéotron are expected to launch cellular services in the coming months.