Asides

New carriers to see 8 million new subscribers by 2014?

No kidding the current wireless carriers are putting pressure on the newcomers and requesting the CRTC to look into how they are structured. A recent study conducted by Toronto-based Convergence Consulting Group shows that our new wireless carriers (WIND, DAVE, Videotron and Public) will rake in about 8 million new subscribers by 2014.

In addition, the study found that Rogers, Bell and TELUS will start to reduce their pricing and also see their market share drop from nearly 100% today to 76% five years from now.

Those are big numbers to take away from the current carriers. Think about it for a second. We have about 70% wireless penetration in Canada, this represents 20 million subscribers today. By the time 2014 rolls around 8 million will be with a new carriers. Big dollars on the line.

Back in the middle of August, Jeff Fan, Warren Hastings and Anubhav Mehla of Scotia Capital announced a report called “Wireless Is Still In Its Early Days”, they stated “We expect new entrants will grow the market faster than the status quo. Under the current industry structure, we estimate Canadian wireless penetration could increase by roughly 3% per year. With new players, we expect this to accelerate the penetration. We believe this additional growth will primarily be in the low end of the wireless market, as new entrants do not have the network capacity, coverage, business model, and access to handsets to address mid- to high-end subscribers… We do not expect new entrants to have a meaningful financial impact on incumbents until 2011-2012″.

With none of the new carriers today having one customer on the books, the end result is that the current carriers cannot afford to loos a customers. Over the next few months we’ll see some massive improvements in regards to offers, customer service and devices. If not, I believe Brahm Eiley, a principal of Convergence Consulting said it best: “These guys have had a really amazing run and that run is over. People are fooling themselves if they think the incumbents can actually hold on.”

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