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Videotron declares “Canadians will see more competition”
If you’re thinking about Videotron and wondering where they have been hiding all this time, wonder no more. Below is an article titled “Competition drives wireless benefits” from the Financial Post that was written by Manon Brouillette who is the Executive VP, Strategy and Market development for Videotron. This article is incredibly well written, well articulated and outright unassumingly powerful.
I’ve highlighted some quotes that I thought were important takeaways… you’ll have your own viewpoints and we’d love to hear them. We’re curious what you think about Videotron an if they are poised to become a
“We are writing to comment on two items that appeared in recent issues of the Financial Post. The first item is commentary by Ken Engelhart, Senior Vice President, Regulatory Affairs, Rogers Communications (Canada Is A Wireless Leader, Nov. 12). The other item we wish to comment on is an interview by Guiseppe Valiante with Wade Oosterman of Bell Canada (Q&A: Bell Mobility’s Wade Oosterman, Nov. 4).
Mr. Engelhart commented on a number of reports that have found Canadians to trail much of the world in their use of wireless devices. Mr. Engelhart suggested that the various studies are flawed: looking at the wrong metrics, using the wrong comparisons and that the reports are coming to the wrong conclusions.
In Mr. Engelhart’s view, Canada remains a leader. He contends that when the usage statistics are viewed through the correct lens, Canadians have been well-served by the wireless industry. We agree that much has happened to improve Canadians’ wireless experience in the past year. The fact that Canadians have now two (not three — the Telus-Bell network is but one network) of the fastest wireless data networks in the world is indeed remarkable.
We ascribe the genesis of the new investment by Rogers, Bell and Telus to the positive effect of new competition. It is important to note that the motivation behind the incumbents’ investments was the necessity to defend their turfs rather than the desire to participate in a quest for world leadership and innovation. With the rapid march of new competitors to the wireless stage, the truth was that the old technologies employed by the incumbents would not suffice in the face of world-leading technology which the new entrants are poised to employ.
Mr. Engelhart neglected to mention another innovation that his company has undertaken — which was the sunset of the System Access Fee. System Access Fees are a distinctly Canadian innovation where Canadian cell phone customers pay an ‘extra’ fee to use their carrier’s wireless network. In all other countries, the network was included in the carrier’s service fees. Not so in Canada.
Mr. Oosterman made a number of points that deserve comment. Taking his points in the order they were made in the interview, his first point was that there is nothing that Videotron can do in the Quebec market that he cannot do. We concur. Our point is that Bell has not been doing so heretofore. That if Bell is going to improve its offerings, upgrade its technology, and refocus its customer service, the reason they are doing so is because the threat of competition from Videotron. They have had a century or so to learn about better customer service and a decade or more to adopt a better technology — only now are they making their customer experience and network investments. In Quebec, they are doing so to meet the Videotron challenge.
The key ingredient in the Canadian wireless marketplace in 2009, the ingredient that has fostered the investments by Bell, Rogers and Telus in network upgrades, the ingredient that has seen the elimination of system access fees first by the incumbent flanker brands, Koodo, Solo and Fido, and then by all of the incumbents — is competition. The competition that was fostered by the Canadian Government in the last wireless spectrum auction.
The Canadian government was unhappy with the services that Canadians received from the three major carriers. To address our wireless malaise, the Canadian government set aside spectrum for new entrants into the marketplace, made access to infrastructure mandatory and it also mandated roaming. Videotron’s customers will be able, thanks to vision of the government and the adjustment to the license rules, to use their Videotron wireless phones anywhere in Canada.
Canadians are already feeling the benefit of competition — Better networks, more transparent pricing. As one of the successful bidders for wireless spectrum in last year’s auction, Quebecor/Videotron promised Canadians that we will offer better pricing, more innovation and better service. These are the hallmarks of competition. When Videotron launches our HSPA+ network, Canada will then have three separate HSPA+ networks. Our service will be launched next year – Canadians will see more competition and competitive benefits.”
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I think that Videotron can make a difference. But I wish that they give us a clear launch date and a preview of what they have to offer. Also we do not have any idea of what will be the wireless coverage at launch. It is pretty sure that videotron will come up with a combo offer, get the 4 services with us and get a discount … I guess this is a wait and see …
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I really hope Videotron is able to back up their statements. Since Wind and Dave mobile do not have spectrum here in Montreal, they are Quebec’s ray of light in a way.
Would be great if they show a preview asap … Can’t wait to leave robbers.
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It’s rather precious of Videotron to state that Canada will have a third HSPA+ network next year (after pointing out that Bell and Telus operate only one netwoek between them). If they had said parts of Quebec will have three networks it would have been closer to the truth. Oh well, spin is spin.
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We could debate some of Videotrons points .It is more than 1 single network that TELUS and Bell operate but has significant shared infrastructure. And if we were only building in response to new entry we would not have bothered covering most of our rural population with wirelessbroadband. But these are quibbles .I am happy to see that as all of us launch world class networks the focus is back to who is going to deliver in the market. That’s good news.
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I think Manon is off-base to claim that the new HSPA+ network and elimination of SAF fees are related to the new entrants expected in 2010.
Bell and Telus built their HSPA+ network as a response to Rogers and the global evolution of technologies. They built the network to surpass Rogers and regain absolute network leadership. Such an aggressive build is not needed to fend off the new competitors. Rogers recent success was enough motivation for Bell and Telus.
Also, the elimination of the SAF started almost two years ago in the flanker brands and it was only a matter of time until it percolated up to the core brands. It was a natural evolution of existing competition, not because of the new entrants.
One area I do think preparations have been visible is the smartphone and data space. The new entrants will have trouble competing in this space due to handset compatibility and availability, and cost of wireless data. I think Bell, Telus and Rogers are working hard to increase the significance of this market so that the addressable market by new entrants is smaller.
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What areas will videotron be serving?
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It will be interesting to see how their actual wireless customers (who are presently on Rogers network) will deal with the fact they’ll have to replace their phone. Videotron is building their network with the spectrum they bought (1700MHZ) and won’t be able to offer devices using the same frequencies has the 3 others (850, 1900, 2100 MZ)… I am curious to see the their lineups…No iphone, no blackberry…
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It’s a little strange to see Videotron critcising the SAF – if you look at their web site, they still charge it at the moment!
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I’m afraid Vidéotron will only be a good deal if you take a massive multi service bundling.
I don’t need cable, nor their phone, or their internet for that matter… All i wan is competition _in_ the cell phone business.
Why is it that it’s illegal to use a monopoly power to attack side markets but it’s all a-ok in the telecom world?
As for the phone line ups, they really HAVE to carry the Nokia N900, it would be a killer!
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Still waiting or I am stuck paying for roaming charges with WIND to use a phone here in Montreal
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I agree with Alex (December 11, 2009, 10:02 am) that Videotron will probably only be a good deal if the consumer takes a massive multi-service bundling. The reason I think this is based on Videotron’s current/past pricing in regards to their current services like television and internet.
I have their internet cable service and their price is comparable to what I could get with DSL service (if not more expensive).
I compare their television pricing to what I get with BellTV and their pricing for cable television packages are comparable in terms of price for roughly equivalent stations.
For landline phone service, they are cheaper than Bell but not that much cheaper. I use a SIP based system as one of my phones which uses the internet for phone calls and the long distance rates as well as the local rates are cheaper than what a Videotron cablephone customer pays. I also get a local Montreal number and can answer/make calls.
Videotron is/was reselling Rogers cellphone service under their own brand and I know lots of people will say the reason why Videotron’s price plans for cellphone service wasn’t competitive because they were reselling Rogers services and they had to price their plans more than how much they were buying it from with Rogers but Petro-Canada Mobility and 7-11 Mobility are also reselling Rogers cellphone service and for light usage, they are competitive.
I wouldn’t expect a big deal with Videotron when they release their own cellphone service.
I can see them having a price plan for Quebec calling, giving a reduction in terms of monthly charge for agreeing to a contract (similar to what they do with their cable internet), etc.
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