MONTREAL – Without legacy cost structures and the ability to focus on just one product (wireless handsets), Canada’s new wireless entrants look to upset the mobile market here with ultra-low prices, beginning this year, says a new report from consultants SeaBoard Group.
And despite the tattered economy, it appears that financing for the launch of the new players is well in place.
Two of the new entrants, Public Mobile and Globalive, have already made some announcements on launches and staffing. “Canadian wireless seems exempt from the planetary catharsis. Funds are being raised, suppliers consulted, and staffing-up is underway,” reads the report.
Public Mobile, headed by former Rogers and Bell exec Alek Krstajic has already said it will launch this year with plans as low as $40 a month for unlimited voice and text.
Globalive is expected to launch similar pricing and both companies are targeting a Q3 2009 launch.
The incumbents’ low-cost brands Koodo (Telus), Fido (Rogers), and Solo (Bell) have already slashed costs to as cheap as $45 a month, but they are not unlimited plans and are constructed with the higher-end parent brands in mind.
“A pure-play provider positions its single service-set based upon its limited product portfolio and looks to exploit opportunities without regard to the sort of cross-service impact that characterize more integrated competitors,” reads the report. “Wireless pure-player provider pricing decisions are not influenced by product cannibalism risks. For a new entrant, the economics of a $40/month unlimited plan are merely governed by adoption rates, marketing costs and network stress considerations.”
However, with all the contracts the incumbents have been pushing, they do have solid defenses against the new entrants.
For more, go to www.seaboardgroup.com.
