Public Mobile to launch in May

Public Mobile, the second new cellphone carrier to start up in the past four months, is now selling service, with a network launch scheduled for May.

The Toronto-based company on Thursday said customers who sign up now will receive unlimited long-distance calling for life.

Chief executive Alek Krstajic said Public Mobile will launch with four handset models, with no contracts, and have 15 stores in Toronto and 10 in Montreal. The company does not plan to offer more advanced smartphones, he said.

Public Mobile has so far touted only one service plan — $40 for unlimited talk and text. Features such as caller ID and voice mail will cost an extra $5.

Some industry analysts do not like Public Mobile's chances in what is becoming an increasingly crowded cellphone market. The company will compete with established players Bell, Rogers and Telus, as well as newcomers Wind Mobile and Mobilicity in southern Ontario and Videotron in Quebec.

Public Mobile spent about $50 million in a 2008 auction of airwave licences. It bought spectrum in the G-block, which few carriers in the world use. That will limit the number of handsets that Public Mobile can offer.

The company is also not offering roaming at launch, which means that customers' phones won't work when they leave Public Mobile's coverage area. Some analysts have suggested this is because of limitations with G-band frequencies, but Public Mobile chief technology officer Brian O'Shaughnessy said it is a business decision. The company is initially targeting urban users who don't travel much.

"G-band frequencies are not a factor in Public Mobile introducing roaming for our customers," he said. "While Public Mobile is not implementing roaming capability initially, all phones being sold today will be able take advantage of roaming whenever we chose to introduce the capability."

Other analysts have praised Public Mobile's no-frills strategy. A report last year by the SeaBoard Group telecommunications consultancy said Public's spectrum purchase was "a steal" that will allow it to operate at a much lower cost than rivals. Wind Mobile, for example, spent more than $440 million on what was seen as more valuable spectrum, which is debt that will limit how flexible the company will be.

Public Mobile must still receive clearance from the Canadian Radio-television and Telecommunications Commission before it can start up. The regulator is conducting a review of the company's ownership and control structure to ensure that it meets Canadian ownership requirement. The CRTC last year rejected Wind Mobile after finding its Egyptian backer Orascom had too much influence, but was then overruled by the federal government.

The CRTC's review of Public Mobile is a "level 2" investigation, which is less intensive than the "level 4" probe of Wind Mobile.

A spokesman for the CRTC said a decision on Public Mobile is expected late this month or early April.

Public Mobile also applied to the Federal Court of Canada in January to overturn the government's decision to allow Wind Mobile to start up.

"We believe cabinet's decision is unfair to other wireless carriers, especially new entrants like Public Mobile that have played by the rules and secured substantial Canadian investment," Krstajic said at the time.

"Furthermore, while we respect the government's authority we believe what it has done amounts to a change in law, and only Parliament can change Canadian law."