At the RBC Technology Conference in New York yesterday Rogers CEO Nadir Mohamed said that they are actually not going to compete on price with the new carriers because he doesn’t expect to lose many smartphone subscribers. “If we lose subscribers to new players, we would like to lose the lower-value (customers). We want to keep the ones that are higher value… You won’t see the Rogers brand being priced in a way that provides a disconnect between the quality and what we offer.”
This then begs the question about what “value” actually is. In these highly competitive wireless days isn’t every customer valuable? Value in this case is clearly about how much per month a subscriber contributes to the bottom line and making sure the shareholders see a profitable return on investment. I believe when Nadir Mohamed speaks about “Quality” he’s referring to the size, speed and reliability of their network.
Flanker brands such as Koodo Mobile, Solo Mobile, Virgin and Fido and the new entrants like Public Mobile, Mobilicity and WIND Mobile all have marketing strategies to go after the “value conscious” segment. The incumbent players like Rogers, Bell and TELUS have certainly adjusted their price plans accordingly to keep and grow their subscriber base. In addition, all Canadian carriers offer some type of Smartphone (not Public Mobile) and according to research more people are migrating to this type of mobile device.
With subsidized pricing usually coming in around the $49.99 – $99.99 price point on a 3-year, any device is actually affordable. Smartphone plans start these days around $10 a month for basic data. So these days even the lower-value customers could afford a Smartphone. Not the newest one on the block but one good enough to get started.
Nadir Mohamed makes a solid point because he knows with all this competition that customers might go and try something new. Even with Rogers being the largest wireless player in Canada with over 8 million subscribers… a customer leaving is never a good thing as it takes more time, money and resources to eventually bring them back.