TORONTO – Despite deeply discounted pricing, Canada’s new wireless entrants are expected to own only 7% of the wireless market by the end of this year, according to a new report from Convergence Consulting.
Canadian Wireless: Assessing the Impact of New Entrants says that Wind Mobile, Public Mobile and Mobilicity are undercutting incumbents Rogers, Bell and Telus and their discount brands on voice packages by up to 58% and 40% respectively, and on combined voice/data packages by up to 63% and 57% respectively.
In some cases, such as with regional providers like EastLink and Videotron, the incumbents and their discount brands can price match or even undercut. Lower prices are spurring wireless substitution, which the report forecasts will grow to 26% at year-end 2014, from 22% at the end of 2013.
The report also predicts that the new entrants combined will have 7% (1.93 million) of Canadian wireless subscribers by the end of 2013, up from 6% (1.6 million) year-end 2012, and that will grow to 8% (2.4 million) by the end of 2014. It also flags the outcome of the 700 MHz spectrum auction and the potential merger or sale of the new entrants as “pivotal variables for 2014 and beyond”.
Other highlights from the report include:
– Canadian wireless service ARPU (weighted) will grow by 0.8% in 2013 and 1% in 2014, up from 0.5% in 2012 (and -1% in 2011), driven by data;
– The big three incumbent wireless providers will see 22% data revenue growth in 2013, and data will represent 46% of their 2013 service revenue;
– Canadian wireless subscriber smartphone penetration will reach 65% by the end of 2013, up from 56% at year-end 2012.
