In theory, more competition in Canada’s wireless market is a good thing because it will encourage the industry to become more innovative and, hopefully, it will drive down prices, which rank as the highest in the world.
The question, however, is whether consumers are interested in Canada’s new wireless players, which have emerged to compete against the three large incumbents – Rogers, Telus and Bell. So far, it doesn’t look like consumers really care much about the new competitors, which includes Wind, Public Mobile and Videotron.
Earlier this week, Wind CEO Tony Lacavera said the company has attracted about 140,000 customers. On the surface, it looks pretty good but it does appear the company has enough traction to reach its goal of 1.5 million customers by the end of its third year of business. In Quebec, Videoton only attracted 8,400 wireless customers in the third-quarter, failing to meet the 25,000 to 30,000 expected by analysts.
While the new wireless players will talk about the progress they are making, the harsh reality is Canada’s wireless landscape is a challenging place to establish a foothold when you consider how long the incumbents have been able to establish themselves. While the new players are valiantly trying to capture the attention of consumers, the incumbents are aggressively counter-attacking every move the new players make. A blatant example is Rogers’ launch of the low-cost Chattr brand earlier this year.
Maybe the the new wireless competitors need more time to win over consumers and position themselves as alternatives. Perhaps it is a matter of consumers being able to free themselves of long-term contracts before being able to consider alternatives. It could be that the new players need to offer cool smartphones given this is where the market is rapidly heading.
But any you want to cut it, Canada’s wireless market is, on the surface, more competitive but the bigger question is whether Canadian consumers are willing to enthusiastically embrace the new competitors.