{"id":1476,"date":"2020-09-21T17:21:56","date_gmt":"2020-09-21T17:21:56","guid":{"rendered":"https:\/\/canadatelecoms.ca\/news\/commentary-the-wireless-collusion-myth-greg-obrien-cartt-ca-en-anglais-seulement\/"},"modified":"2023-03-31T17:31:24","modified_gmt":"2023-03-31T17:31:24","slug":"commentary-the-wireless-collusion-myth-greg-obrien-cartt-ca-en-anglais-seulement","status":"publish","type":"news","link":"https:\/\/canadatelecoms.ca\/fr\/news\/commentary-the-wireless-collusion-myth-greg-obrien-cartt-ca-en-anglais-seulement\/","title":{"rendered":"COMMENTARY: The wireless collusion myth \u2013 Greg O\u2019Brien, Cartt.ca (en anglais seulement)"},"content":{"rendered":"\n

This commentary was originally published on cartt.ca<\/a> on September 18, 2020.<\/em><\/p>\n\n

ONE OF THE MORE prominent, persistent fictions when it comes to the Canadian wireless business, is that the market isn\u2019t competitive.<\/p>\n\n

Proponents of that myth point to similar pricing, similar services, similar devices, and so forth, as proof Canadian wireless operators march in lock-step, perhaps even consulting one another behind the scenes looking for ways to maintain the status quo. You don\u2019t have to dig very far on Twitter or Reddit, or even in talking to family members, to hear such balderdash.<\/p>\n\n

If you pay attention to the market, however, you can easily see a high level of competitive intensity among the players. Even during this pandemic, there have been myriad deals offered by all carriers, including \u201ccrazy<\/a>\u201d prices on iPhone 11s, unlimited data deals where it\u2019s full speed data for 25GB per month (rather than 10GB under some of the normal plans) for $60. Freedom is offering \u201cAbsolute Zero\u201d phones right now and its growth has caused the incumbents to respond.<\/p>\n\n

Proponents of the myth we mention above illogically say that because our wireless companies tend to respond and match prices in the market that means the market is not competitive, when forcing your competitor to make a move to match yours, or better it, in fact shows the exact opposite.<\/p>\n\n

Take for example, the switch to unlimited plans launched by Rogers last summer. This was not something the companies all did all together, hand in hand. In fact, Rogers pushed Bell and Telus into it, earlier than the latter two wanted. This is quite clear if you listen closely to some senior executive comments. Rogers knew it would mean giving up millions of dollars in data overage revenues, which its competitors were loathe to do so soon.<\/p>\n\n

Rogers Joe Natale told the BMO annual Media and Telecom conference this week the reason his company made the switch to unlimited plans when it did was to prime its customers early for 5G.<\/p>\n\n

\u201cI know that some of our peers have been kicking and screaming a bit on this topic of unlimited, but our goal was to take the long game here,\u201d he said. \u201cThe overage regime in Canada, overage revenue, was at a point where we were going to limit our ability as an industry to take full advantage of 5G and what\u2019s around the corner.\u201d<\/p>\n\n

On the cusp of 5G, with the data advantages it will bring, the overage fees system was \u201ccompletely illogical,\u201d Natale continued. \u201cSo therefore we had to break the back of that construct\u2026 Our view has been, in terms of the broader macro base management, is put your foot on the gas and drive to that place, because those are high-value customers that will continue to be in that worry-free space and consuming unlimited, and really, really pre-positioned for 5G.\u201d<\/p>\n\n

Speaking after Natale was Bell CEO Mirko Bibic, who agrees with the former\u2019s premise that the switch to unlimited is needed as the industry readies for the next generation of wireless tech, but Bibic believes Rogers went too early (and Rogers\u2019 rougher than expected financial results as customers switched to unlimited, more than two million now, and overage revenues evaporated prior to the pandemic might bear Bibic\u2019s thoughts out).<\/p>\n\n

\u201cI think the timing of the launch of that is an open question.\u201d \u2013 Mirko Bibic, Bell Canada<\/h4>\n\n

\u201cOver the long run\u2026 unlimited plans are probably the right way to go and certainly positive for a certain segment of customers,\u201d said Bibic. \u201cAs you think about what usage might be with 5G networks down the line, unlimited plans will definitely be more significant value to customers as we go along.<\/p>\n\n

However, \u201cI think the timing of the launch of that is an open question,\u201d added the Bell CEO, \u201cbut we\u2019re in it. We see customers continuing to migrate to unlimited plans. We continue to see the majority of customers who migrate are migrating up to a higher base plans than those were downgrading, but there is an overage revenue impact.\u201d<\/p>\n\n

The two biggest wireless companies in the nation, fundamentally disagreeing on the biggest pricing shift the Canadian industry has seen since Freedom launched Big Gig.<\/p>\n\n

And speaking of the word unlimited, Videotron has instead been pitching plans called \u201call-inclusive\u201d (because Videotron\u2019s are not the same as the others), and CEO JF Pruneau scoffed at his competitors\u2019 term during his talk at the BMO conference, because speeds on the Big Three\u2019s unlimited plans slow down after a certain GB threshold. \u201cIt\u2019s not a true unlimited. It may have some ground on the marketing side, but from a customer perspective and consumption perspective in my mind it doesn\u2019t make any sense.\u201d<\/p>\n\n

And \u201call-inclusive\u201d is performing well for the company as it continues its rapid growth in Quebec.<\/p>\n\n

What all this shows is these are not companies marching in lock-step. They are trying hard to beat one another every day and draw customers. Would still lower prices be welcome? Sure. Additional competitors? Why not. That said, it\u2019s worth acknowledging there is real, serious competition in the Canadian wireless market, despite what you read on the internet.<\/p>\n","protected":false},"excerpt":{"rendered":"

This commentary was originally published on cartt.ca on September 18, 2020. ONE OF THE MORE prominent, persistent fictions when it comes to the Canadian wireless business, is that the market…<\/p>\n","protected":false},"featured_media":0,"template":"","meta":{"_acf_changed":false,"inline_featured_image":false},"categories":[],"class_list":["post-1476","news","type-news","status-publish","hentry"],"acf":[],"_links":{"self":[{"href":"https:\/\/canadatelecoms.ca\/fr\/wp-json\/wp\/v2\/news\/1476","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/canadatelecoms.ca\/fr\/wp-json\/wp\/v2\/news"}],"about":[{"href":"https:\/\/canadatelecoms.ca\/fr\/wp-json\/wp\/v2\/types\/news"}],"wp:attachment":[{"href":"https:\/\/canadatelecoms.ca\/fr\/wp-json\/wp\/v2\/media?parent=1476"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/canadatelecoms.ca\/fr\/wp-json\/wp\/v2\/categories?post=1476"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}