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Bloodbath’ expected in wireless sector

rafterman

A sadder and a wiser man
Feb 15, 2004
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Ha ha ha.....about time.

Bloodbath’ expected in wireless sector
Iain Marlow
18:51 EST Wednesday, Jul 21, 2010

Telecom Reporter — Back-to-school season is the new Christmas for Canada’s cellphone providers, but although this September will see plenty of giving and receiving, no one expects the affair to be festive.

The wireless industry is preparing for its most disruptive back-to-school period ever as companies prepare to defend their existing bases of cellphone customers and win new ones during the industry’s most crucial sales season. The mayhem has already started and, especially at the low-priced end of the market, it is only going to intensify.

“It’s ‘go’ time now,” said Ken Campbell, Wind Mobile’s chief executive officer. “We’ll see where the dust settles.”

The third quarter, especially the intense period between August and late September, has grown in importance for wireless companies over the past few years and is now more significant than Christmas in terms of picking up new customers.

This year the competition will be tougher than ever as newly launched cellphone providers Mobilicity, Public Mobile and Wind Mobile fight for customers. The new entrants are expected to ramp up offers, especially in the country’s biggest cities, in a bid to win business.

One wireless industry executive said the next couple of months will be a “bloodbath” and predicts deeply discounted offers no company will be able to maintain over the long term.

Some executives, such as those at Wind Mobile, are postponing summer vacations to deal with what they expect to be the most intense competition in the sector’s 25-year history. The upstart provider just launched an offer featuring half-price service for one year on mobile data plans, a deal that Mr. Campbell said is positioned to target students who use smart phones as modems. As the competition intensifies, Wind will also look at bundling offers together and further discounting.

The incumbent providers – Rogers , BCE Bell Mobility and Telus – will have the trendy new iPhone 4 by August to help spur sales.

The incumbents, as well as the new players, are closely guarding the details on many new products and prices to prevent being outflanked by competitors, but every provider has something planned.

“You’ll see news from us on pricing, you’ll see news from us on hot devices,” said Phil Hartling, senior vice-president for Rogers’ consumer segment.

Rogers has already announced a new discount brand, Chatr Wireless Inc., to battle the new wireless players – a move analysts say is likely to prompt Bell and Telus to reprice or reposition their own discount brands, Solo Mobile and Koodo Mobile.

Telus is about a week-and-a-half away from announcing its back-to-school pricing plans and promotions.

Wireless companies view students leaving home for university as ideal customers. Not only are students tech-savvy consumers, capable of influencing their parents, but many need to start off with a full suite of mobile Internet and cellphone plans, said Kaan Yigit, founder of the Solutions Research Group consultancy.

“Back-to-school is the season that addresses relatively young consumers who are leaving home for the first time and are therefore more likely to be taking the product as their only source of communication,” added Greg MacDonald, an analyst with National Bank Financial Inc.

“This further suggests that these are higher-than-average-revenue customers, and that’s why the third quarter matters so much now.”

______

Hot sales season

Back-to-school season in Canada has gradually grown more important than Christmas for Rogers, Bell and Telus, as measured by total gross additions of wireless subscribers during the third and fourth quarters.

2006

Q3: 1.26 million subscribers

Q4: 1.38 million

2007

Q3: 1.37 million

Q4: 1.45 million

2008

Q3: 1.46 million

Q4: 1.45 million

2009

Q3: 1.47 million

Q4: 1.43 million

2010 ESTIMATES

Q3: 1.48 million

Q4: 1.46 million

Source: Company reports; National Bank
 

Rockslinger

Banned
Apr 24, 2005
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We have seen this movie before (Fido, Microcell, etc.). All these little pimple upstarts will be bought out by the "Big 3".
 

Tangwhich

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Jan 26, 2004
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We have seen this movie before (Fido, Microcell, etc.). All these little pimple upstarts will be bought out by the "Big 3".
Maybe long term.. but if memory serves me correct the CRTC ruled when these new licenses were issued that these companies cannot be bought out by the big 3 for a certain period of time..
 

Rockslinger

Banned
Apr 24, 2005
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Maybe long term.. but if memory serves me correct the CRTC ruled when these new licenses were issued that these companies cannot be bought out by the big 3 for a certain period of time..
Then it will be a race to the bottom. Does the government want to turn the wireless industry into another airlines industry that never turns a profit? Ridiculous.
 

afterhours

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Jul 14, 2009
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Then it will be a race to the bottom. Does the government want to turn the wireless industry into another airlines industry that never turns a profit? Ridiculous.
excuse me? US plans are so cheaper than Canadian ones that I know some Canadians that use US numbers and plans. Canadian prices are ridiculous.
 

Tangwhich

New member
Jan 26, 2004
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Then it will be a race to the bottom. Does the government want to turn the wireless industry into another airlines industry that never turns a profit? Ridiculous.
It wanted the consumers to have a real choice.. they are preventing the big boys from destroying competition before they even get a chance to start up. I'm not a big fan of the CRTC, but this is one ruling I like..
 

Rockslinger

Banned
Apr 24, 2005
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US plans are so cheaper than Canadian ones that I know some Canadians that use US numbers and plans.
Lots of stuff is cheaper in the U.S. It is call "economy of scale". They have 400 million people, we have 34 million.

Query: Do you want to live in the States? I don't.
 

bishop123

Member
Mar 5, 2005
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Lots of stuff is cheaper in the U.S. It is call "economy of scale". They have 400 million people, we have 34 million.

Query: Do you want to live in the States? I don't.
Sorry Rock, just want to correct your figure of the population of U.S.A. to a more accurate number of 310 million. I don't want to live in the States either.
 

mac

Well-known member
Aug 19, 2001
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Then it will be a race to the bottom. Does the government want to turn the wireless industry into another airlines industry that never turns a profit? Ridiculous.
ya..you're right....competition is way over-rated...shame on the socialust Canadian government for causing this to happen.
 

out4fun

Active member
Jan 8, 2008
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Lots of stuff is cheaper in the U.S. It is call "economy of scale". They have 400 million people, we have 34 million.

Query: Do you want to live in the States? I don't.
Our 34 million people are within a stones throw of their 310 million. We wouldn't need to live there to take advantage of their cellular savings if we had open markets and got rid of the CRTC.
 

Rockslinger

Banned
Apr 24, 2005
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Our 34 million people are within a stones throw of their 310 million. We wouldn't need to live there to take advantage of their cellular savings if we had open markets and got rid of the CRTC.
The cost of business is higher in Canada. For example, everything has to be bilingual.
 

larry

Active member
Oct 19, 2002
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Wind? Only a dummy would buy them. Why? 5 cities. roam everywhere else. unbelievable. (Toronto area, Vancouver, Calgary, Edmonton, and Ottawa). i cry when i see the dupes lined up at the wind kiosks.
 

Tangwhich

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Jan 26, 2004
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Wind? Only a dummy would buy them. Why? 5 cities. roam everywhere else. unbelievable. (Toronto area, Vancouver, Calgary, Edmonton, and Ottawa). i cry when i see the dupes lined up at the wind kiosks.
While this wouldn't work for me, there are tons of people who live in the city and never step foot outside of it.. TONS.. it will work for many..
 

djk

Active member
Apr 8, 2002
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the hobby needs more capitalism
Lots of stuff is cheaper in the U.S. It is call "economy of scale". They have 400 million people, we have 34 million.

Query: Do you want to live in the States? I don't.
If they get universal health care like us, hell yeah!
 

larry

Active member
Oct 19, 2002
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Really? I know you pulled this stat outta no-where. If you're one of those folk, yep, it'll be fine. Until the day you happen to board a bus to visit a friend somewhere. Then you pay dearly. This is same as Fido. Too restricted for me. But, you do have a point. If you're sure you'll not be leaving your city, Wind is an option.
 

Tangwhich

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Jan 26, 2004
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Like I said larry, it doesn't work for me. But many of those people that are very pro bike lanes and pro TTC live in the city and seldom, if ever leave it. Many of them don't own cars and often don't even have a license. I know lots of people in this situation and yes, wind would work for them. Once they have a decent customer base in the city I'm sure it will expand to other areas.
 
Ashley Madison
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