Looking at Rogers Communications’ third-quarter results, the “new competitive reality” (aka new low-cost wireless rivals such as Wind, Public Mobile and Mobilicity) is starting to have an impact on Rogers’ profits.
Faced with the reality that consumers now have more choices, Rogers has been forced to lower its prices, cough up better deals to existing customers who threaten to leave, and launch a low-cost wireless service of its own, Chattr. This may be bad news for Rogers but it’s good news for consumers who are paying some of the highest wireless prices in the world.
Amid the doom and gloom about Rogers, there’s one key metric missing: Other than the fact Rogers is being forced to play nice, how many consumers are actually signing up with Wind, Public Mobile and Mobilicity? Is the competition winning lots of business or simply forcing the incumbents to offer sweeter deals?
There has been little subscriber information from the new players other than a press release by Wind in August that it had “welcomed over 100,000 customers in our first two quarters”. You need to figure out what “welcomed” means before getting too excited. Does this mean subscribers? Does it mean people who asked for information about what Wind is offering?
As much as it may be easy to dismiss Wind, et al, one lesson I learned an important lesson a few years ago that a a lot of business can happen without a lot of horn-blowing. I went to a Virgin Mobile event a few years ago, and told their PR person that I was going to guess how many customers they had. I wrote “25,000″ on my hand, and then showed it to her. Much to my surprise, Virgin had 250,000. When Virgin sold its stake to Bell, there were more than one million subscribers.
For all we know, the new players could have lots of customers or very few customers. As privately-owned companies, they don’t have to disclose any information unless it’s to their advantage. At some point, they may have to tip their cards to demonstrate to analysts and consumers they have enough traction to become viable and long-term players. But I think until they get a healthy amount of subscribers, don’t expect to hear any updates.
