National Post (National Edition)
Dropped call
FORGET A LOANER — TORONTO-BASED FIXT CAN PROBABLY FIX YOUR PHONE WHILE YOU WAIT.
Years of telecom industry experience and a mutual nomophobia — a newish term coined to describe the fear people have of being separated from their mobile phones — led Garry Wood and Donna Custance into the retail technology repair business.
That, and some personal cellphone accidents.
“I drove away with my cellphone on top of my car — I’ve done it twice, actually,” said Wood, CEO and partner in Toronto-based Fixt Wireless Repair, which opened its first store in March and now has six locations in the Toronto area. “I could see it in my rear view mirror after it slid off the roof bouncing on the concrete.”
Although Fixt caters to a number of tablet, laptop and phone maladies and can repair a cracked screen for about $100, many consumers don’t know that many hardware problems can be fixed.
Many mobile phone consumers, in particular, end up getting a new device when theirs breaks — when it gets wet, or the ports are jammed with lint, or the screen is cracked. Because they pay for the phone thorough a carrier’s service plan, they often call that carrier first to ask about repairs, said Wood, who previously was CEO of Worldlynx Wireless, Bell Canada’s largest dealer, and worked for years at both Rogers and Bell.
“If you have a broken phone and call up your carrier, they tell you, ‘ We could send it away and that will take about two to three weeks, or we could put you into a new contract and give you this phone for $99, and amortize the (added costs) over the contract,’ ” he said.
“It’s not convenient — you don’t want to be separated from your phone for a day, let alone two to three weeks.”
Fixt is not affiliated with any carriers, but Wood and Custance don’t blame Bell or Rogers, who make most of their revenue and profit from selling consumers contracts.
“Service is not their busi- ness,” Custance said. “Their focus is to do with keeping or increasing customers on the network. It’s really an afterthought for them, so there is a market for people like us to fill the gap.”
Fixt’s entry into the market comes at a time when mobile penetration in Canada is surging. As of the second quarter of 2016, there were 29.6 million wireless subscribers in Canada, the Canadian Wireless Telecommunications Association reports. Between mobile phones and tablets, there are about 40 million devices used in Canada. As well, the CRTC’s Communications Monitoring Report 2015, shows more Canadian households have mobile phones — 85 per cent — than landlines, (79 per cent).
“We swap batteries all the time. People come in and think that their screen is broken and they come in and we do a diagnostic and we find a hunk of food or lint in the charge port — the battery is dead from an inability to charge the phone. Every time you plug your plug in it will jam tighter and tighter. The reason our guys wear gloves is because of the stuff that gets inside the phone.”
Wood met Custance in the early 1990s when they both worked at Rogers and later at Worldlynx with their third partner in Fixt, Lyndon Jones, then Worldlynx’s CFO. Wood recalls getting “bored” after his 2014 retirement, and wondering why there were phone repair chains proliferating in Europe and the U.S., but not in Canada. He pitched Jones and Custance on the idea of starting a reliable national network of repair shops that would do a same-day or while-you-wait repair.
The partners, who retain a controlling interest in the business, raised $2.75 million between themselves and private investors to develop Fixt, and build the first 20 corporate stores and a repair lab to service corporate accounts. They expect the business to be profitable within 18 months.
Ken Wong, a Queen’s University marketing professor, said another customer hurdle when it comes to repairing a phone or laptop is that the bulk of businesses that do it are small independent electronics shops, and some customers are reticent to hand over their phones and phone passwords with stored personal information and photos.
“They are up against the mom-and-pop shops and the issue there is the trust … you don’t really know what you are getting with any of those shops — we have all had these instances where we bring (a device in) and it is not working in a week,” he said.
“The big hurdle will be building up a brand awareness and trust, so building up quickly and establishing a reputation is important. In that way an association with a (telecom company) would be helpful, but on the other hand, they also have an advantage if they are not associated with the phone companies,” because there is a high level of consumer “disdain” for the carriers, he said.
He advises “a strong promotional push to establish themselves as the standard against which all of the other are measured.”
Custance, Fixt’s chief marketing officer, said the company is keen to promote safety and security as an asset to customers. Its technicians are bonded and repairs are done behind a pane of glass in full view of customers. Staff also sign a non-disclosure agreement with customers before they leave.
SERVICE IS NOT THEIR BUSINESS. IT’S REALLY AN AFTERTHOUGHT.
“We can also put the contents of a customers’ phone on a data stick, give it to the customer and wipe the phone of content before our technicians begin a repair job,” Custance added.
Fixt also sells refurbished phones, repairs tablets and recently began doing laptop repairs. Other services include data transfers, data backup and video to DVD transfers. The company expects to make nearly $2 million in revenue in its first fiscal year and have annual sales in excess of $8 million in 2017, based on a target of opening 25 stores by the end of that year. The goal is to have 80 corporate stores across Canada by the end of its fifth year.
But Fixt won’t be alone in this relatively uncontested space: Mobile Klinik, a franchise operation backed by two former executives of Wind Mobile and Rogers, has opened two stores in Ontario and one in Quebec.
Wood welcomes the competition, noting that Europe and the U.S. already have established repair chains. “Competition helps to build awareness,” he said. “We think there is room for more than one of us in the market.”
In the U.S., the repair business was valued at US$500 million to US$1 billion in 2013 and Canada has lagged that market, he said. The Fixt partners estimate the current market potential in Canada to be from $50 million to $75 million, based on the maxim that our market is one-tenth the size of the U.S.