Just when you thought Canada's wireless industry had all agreed (nudge, nudge, wink, wink) to “pricing stability”, Virgin Mobile Canada
comes and wrecks the party by offering a new pre-paid plan featuring
10¢ a minute calls (plus a 40¢ a day fee). It's a huge drop given
Virgin was charging 25¢ for the first five minutes and 15¢ afterwards.
So what does it mean? For one, the CEOs of the big three- Telus, Bell
Mobility and and Rogers – probably had a collective temper tantrum,
crossed Virgin Canada CEO Andrew Black of their Christmas lists and did some ARPU recalculations. As for Virgin, it's difficult to tell what it means. The 10¢ a minute plan – known as Day2Day – is part of the Virgin U.S.
rate package so the Canadian offering is not new. Then again, you hear
so little about how Virgin is doing in Canada – partly because the
target audience is the teen set and that's a demographic I have no
insight into. If you talk to Rogers and Telus, they'll tell you their
pre-paid sales have not been affected but I wouldn't expect them to say
otherwise.
It spells desperation. When cheeky advertising and being a champion of the little guy doesn't work, drop your pants on price.
They want number portability faster, yet their business plan is predicated on first time phone users. Why do first time phone users need number portability?
Perhaps they need number portability faster because when someone leaves a pre-paid service provider, the paid balance stays with the old carrier.
Their business model is flawed. They chose the wrong underlying carrier, and now, with no pricing power, they'll be done before number portability is implemented.
Useless product for anyone other than the teen set, it doesn't roam in the US and suprisingly it doesn't roam in the UK either.