If you're looking for the right word to describe how Canadian wireless CEOs are feeling these days, it's chuffed..
With pesky Microcell Telecommunications taken out of its misery by Rogers, the Big Three (Rogers, Telus and Bell Mobility) are enjoying a stable pricing environment, strong subscriber growth and more revenue from data services. As Rogers Wireless CEO Nadir Mohamed said today at an RBC Capital Markets conference in Banff, “it's a great time to be in the wireless business”.
If you figure penetration in Canada will likely settle in eventually at 70%, there are probably four or five years of really good times ahead for wireless carriers. With everyone focused on ARPU and profitable growth, you can expect there will likely be across-the-board approval of price increases. In fact, we're alreadying seeing indications pricing is on the rise. Telus, for example, is thinking about moving the start of its free weekend calling plan to 9 p.m. on Friday night from 8 p.m. for new customers. Anyone who wants the start time to be 6 p.m. will pay a $7 or $8 monthly fee. It's a small change but it illustrates how carriers are always thinking of any way to boost ARPU.
Unless Virgin or the introduction of local number portability changes the competitive dynamic, you can expect to see your wireless bill go up, up and away.

A common theme during the first day of RBC Capital Markets' conference was the carping about Bell Canada's $5 a month long-distance plan that it introduced last summer. Everyone not only had to match the Wal-mart types prices to stay in the game, but now everyone launching VOIP service – at least in Eastern Canada – has to take into account they are unable to use cheap LD as a selling feature because Bell has taken the bottom out of the market. One CEO dismissed Bell's LD pricing as “a disaster”.
For consumers, a troubling undercurrent is the feeling among CEOs that prices need to be increased to justify ROI and return on equity. There seems to be a common belief Canadians have been spoiled by cheap communication services, particularly compared with the U.S. Of course, these executives are anxious, if not desperate, for ways to boost revenue so price increases are an easy way to do it if all your “competitors” abide by the same rules.
We're not talking about collusion here, are we?!

Amid the large, publicly-traded companies at RBC Capital Markets' conference this week, a somewhat surprising participant was Vonage, which was part of a panel on the outlook for the wireline business. It turns out Vonage Canada CEOBill Rhamey was popular as it held several long meetings with invesotors and had to schedule conference calls on his way back to Calgary. Perhaps RBC's interest had something to do with courting Vonage as it heads for a possible IPO this year. Maybe RBC wanted a shit-disturber on hand just to make things interesting. In any event, Vonage scores again.
In other VOIP news, Cogeco Cable will launch its service by June but do not expect the same kind of discount prices that Videotron Ltee introduced last month. Cogeco CEO Louis Audet is looking for a quick ROI. Meanwhile, Videotron CEO Robert Depatie said that despite the company's low Internet telephony prices, don't be surprised if price hikes happen down the road.

After much speculation and a few off-the-mark target dates, Virgin Mobile Canada will launch March 1. At least, that's what a corporate press release said today that promises an appearance by Richard Branson. Virgin says its new service “will change the face of the Canadian mobile phone industry”.
For ex-Bell Mobility president Michael Neumann, who “resigned” yesterday, he will at least have the satisfaction of watching smugly from the sidelines as Virgin tears into the pre-paid market and steals casual wireless users from the Big Three – Bell, Telus Mobility and Rogers Wireless. As much as no one wants to under-estimate Richard Branson, I get the feeling the Big Three may be surprised with how well Virgin Canada fares.

Rogers Communications is still shooting for July 1 for its launch into Internet telephony. Alan Horn, Rogers' chief financial officer, told an investment conference today the service will be launched in Ontario this year and Atlantic Canada in 2006. Horn was less forthcoming on Rogers' pricing plans. He diplomatically said Rogers will fall somewhere between Videotron's discount approach and Shaw's premium pricing strategy. When asked about whether Rogers has the same kind of penetration goals as Shaw – 20% of the market within five years – he saidit was “not a bad target”.
It's interesting that as Rogers surges ahead with Internet telephony, Call-NetEnterprises isn't placing much focus on the business this year. Instead, Call-Net will continue to grow its traditional wireline local business, which ended the year with about 310K residential customers. Call-Net CEO Bill Linton said he does believe Internet telephony will have much of an impact on the market this year. I get the feeling he still sees the market focused on price rather than features so there is no real need for Call-Net to allocate some of its marketing resources on a service with minimal demand.

According to Infonetics, carriers spent $1.7 billion on VOIP equipment in 2004, a 36% increase from 2003. Infonetics forecasts spending will climb to $5.9 billion by 2008. The good news for Nortel is it was the softswitch market leader last year in class 4 and class 5 apps. Among the companies getting into Internet telephony that will use Nortel's softswitches is Rogers Cable Inc., which announced its Nortel deal today as part of its launch into telephony by mid-year.