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Do you think a 3 wireless brand strategy will work?
There has been wireless in Canada for over 25 years now and over 23 million Canadians have a wireless device. By 2014 the number is expected to increase to 30.1 million subscribers.
During the wireless spectrum auction a few years ago the Industry Minister said that “Our government’s intentions are clear: to achieve lower prices, better service and more choice for consumers and business. We believe in relying on market forces to the maximum extent feasible because competition benefits consumers, and consumers benefit most when markets are as competitive as they can be.”
Competition is alive and kicking in Canada. New players WIND Mobile, Mobilicity, Public Mobile are in full swing. Shaw is organizing themselves to enter the wireless game in 2011. Videotron will be turning on their new 3G+ network soon and the Big 3 all have 3 wireless brands under their name.
Rogers recently announced that they will launch their 3rd brand in the market called “Chatr”, they also have Fido. Bell has 3 brands for wireless that include Bell Mobility, Virgin Mobile and Solo Mobile (does anyone purchase a Solo Mobile device anymore?). Telus kinda has 3 brands that include Telus Mobility, Koodo Mobile and the Mike Network. Looks like a 3-brand strategy to hit all core markets is the way to go in these competitive wireless days.
For us customers we’re already seeing more wireless options, fluctuating handset prices and competitive monthly price plans. Carriers at all levels are offer several contract and no-contract option, no credit checks, unlimited calling and texting… basically anything to get people to sign up and increase their subscriber base.
So with the carriers offering several brands under one name what do you think the outcome will be? Will these brands all flourish or flounder?
Discussion
33 comments for “Do you think a 3 wireless brand strategy will work?”
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I think the new brands (not the sub brands such as Chatr, Solo Mobile, etc) will do well.
….and here is why. No one trusts the existing carriers. Even if they do get some subscribers once people find out who is running them they might give it second thoughts.
I can see some of the new providers buying each other up though. That is a definte possibility.
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flounder is the incorrect word to use. consolidation will be the long term end result. it’s just like any regular industry. once the industry matures (especially so for an industry like telecom which is almost like a ‘utility’ – electricity etc), the number of players reduce and the prices stabilize as the service/product becomes a commodity.
we will probably have an end result of 2 or 3 telecom service providers – bell/telus/mobilicity/ and shaw/rogers/wind/eastlink/ with videotron being an outlier (due to its strong ties within quebec)
smaller regional players will probably exist (i.e. sasktel or manitoba tel)
competition is indeed good. it will result in consolidation and cheaper prices in the long term with only 1 or 2 major players.
name any industry, it’s the same thing (coke/pepsi + lots of little guys, airline industry, auto industry etc etc etc list goes on)
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I don’t know about if there is competition with the prices but so far i don’t see much competition.
What i see is that phones are available in Europe and USA but they are not coming here or with months of delay.
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I think definitely there will be consolidation of the marketplace in near future. But I think what really needs to be done in order to be successful and leave competition behind to innovate newer technologies which are better than the existing ones and suits the pocket of consumers. Its like finding Blue Ocean. Now regarding the current market scenario in Canada, the lower brands will definitely leave a big impact on the market amongst diverse ethnic societies exist in Canada. But its not a long term or profitable enough market to be in over the period of time..
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I think the three brand strategy will work…. I really think the average citizen (ie: not a reader of this site) has no idea who owns which brand so having three different brands works and will work going forward because those larger companies have the resources and means to sustain three brands and particularly when it comes to pricing, hold lower prices for longer than the competition… so new entrants have to be careful they aren’t being priced out of the market in the long run.
I will say that I really think consumer apathy and ignorance are issues in Canada because we are so cut off and in some ways behind the rest of the world… we get terrible coverage/service, our prices are really high and the three year contracts we sign are total jokes to the rest of the world.
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3 brand strategy is legal trickery imo. I don’t see why Telus can’t just be Telus and have different departments to offer what their other brands offer.
It’s as if they create a new brand to get the people that don’t like their main brnad. Take Rogers for example, many people hate Rogers. So people went to Fido. Then Rogers bought Fido and things changed drastically. Now that the hate has gotten strong for Fido plus with the new entrants like WIND, Rogers is not creating Chatr. They should have to tell the public who they really are.
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Well done Rogers….
You have found a way to get around Canadian predatory pricing laws by creating a company which will, in effect, act as a seperate entitiy. Chatr.
All you wondering why they won’t just use Fido to offer these unlimited low rate plans to undercut the competition is because that would tantamount to predatory pricing and would be illegal.
Rogers, you are smart in an evil villian kind of way. This is fantastic for consumers (sarcasm). Suck in people who would otherwise sign on with Wind for their unlimited plans and crush the competition.
Because you are not allowing contracts on Chatr then as soon as Wind folds you can close up Chatr and suck the people back into the big red banner.
Another win for the Canadian consumer! We can all just go back to 3 year contracts then and keep getting hammered by ridiculous pricing plans.
Canadian consumers should demand some transperancy in their wireless providers.
My five thesis (ala Martin Luther) for Cell Providers:
1) No more subsidy of handsets. If providers want to provide handsets, then customers should be offered a 1 year, 2 year or 3 year payment plan to pay off the handset (== contract). If you think you are getting your handset for free now then god help you and I am sick of subsidising your $600 handset!!!!Contract for cell service should be cancelled.
2) Free incoming and caller ID is not an add-on feature
3) My cell phone is wireless and mobile by definition. What is the point of “home zones” for cell phones. Long distance on a cell phone?!? Call rates should be based on a price per minute. I am paying $50 a month for phone service. If I want to spend $50 calling long distance then that is my choice. I should not be charged an additional long distance fee!!
4) Provide unlock codes for fully purchased handsets. By not providing unlock codes you restrict peoples options and hence restrict free market choice!
5) Be competetive. This is obvious.
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Rogers makes no sense with chatr. What’s the point of fido then?
Mike is defnitely not a 3rd brand. U will always see mike promotes with the TELUS name. It’s the same customer service and sold in the same stores
Solo likely won’t finish the year on it’s own
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Telus’ Mike phones are not another brand. They are Telus phones with Telus plans and policies.
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Also the only reason Bell has three brands is from Virgin’s introduction to the Canadian marketplace in the first place. Solo was positioned directly against Virgin till Koodo came out. If Bell knew they would eventually own 100% of Virgin, there would have been no need for Solo.
So really it’s only Rogers that has three brands, and the only reason they have a third brand is to compete against Wind and Mobilicity without having to stop ripping off all the existing customers. It’s a little early to act like everyone has a three brand strategy since Solo and Virgin operate so similarly and Telus is only two brands in reality, so it’s just Rogers right now, but you can be sure the others will follow suit.
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I think that Videotron and Shaw are poised to take a massive bite out of the Cartel’s profit structure, far more so than WIND, Mobilicity or PM. They will bundle aggressively and look to take a huge number of wireless subscribers away from the big 3.
Unfortunately that doesn’t help us poor bastards in Ontario who live just outside the GTA.
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@KV
I would add a #6
6) Phone exclusivity deals should not be allowed. They are anti-competitive and they’re only purpose is to increase the outright purchase cost of phones. Why should I have to go with Telus to get a Motorola Backflip, but with Bell to get a Motorola Dext?
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you guys would all make terrible businessmen and athletes – the point of everything is to “win”.
you get mad because they are going to “crush their competition”? that’s the POINT!!
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i guess you raptor/basketball fans are soooooo mad at other sports teams for “wooing” chris bosh away from the raptors. grr.. damn those mean basketball clubs, trying to put together a better basketball team to win a championship! why do they have to sign all these great basketball players to win a championship? we, the consumers, just want to watch basketball. why are they sooooooooo occupied with wanting to WIN!???!??! this is ABSURD!!!
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I’m with KV on points #1 and #4 (Jim’s #6 is just an extension of #4). I don’t think we need any more regulations but if there was one I’d be in favour of it would be making the handset subsidy a separate and limited item on your contract!
Besides that, the whole debate of competition is pointless if you don’t have enough consumers to compete for! And Canada is small country consumer-wise! That’s why we don’t get all the phones and why one or two of the new entrants will get bought out or go bankrupt.
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i have a solo mobile device but what would happen if bell decided to shut it down would i lose everything
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working at bell – the several brand strategy distracts our customers, they get pissed off when nobody at solo customer service ever picks up their calls. We will see some major consolidation in the market. I think Solo will phase out soon, they have already closed hundreds of Kiosk locations. Bell and virgin have pretty identical handsets and plans now.
It is now all a marketing game and a promo pushing game. The company that pushes the lowest prices and includes all the perks like a solid network and customer service will out win. Personally I think Virgin will become uber successful in the next coming years simply because of its customer service and network.
Wind, Public, and Mobilicity have pushed the prices to new lows but still lack the quality that customers need. If they can’t pick those up, and I do not think can because it would not be profitable they will probably have to merge, collapse, or get bought out and raise prices
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why cant they just lower the price of the smartphone plan
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Brands like Chatr will succeed well as well as the other incumbents brands as high, mid and low end. The advantage is that the incumbents have the technical advantage and the investment made as well as the culture of quality of the Canadian consumer. The new entrants started on wrong foot with the above barriers but as well surprisingly creating new ones as crappy networks and terrible service the Internet is full of LOL if we look into the oldest one as example which tops the ever issues LOL. Consumers usually need no excuses for lousy issues with their subscription considering pathetic if not ridiculous the reasons
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Wind should buy mobilicity to counter the 3 brand stratgey and public mobile is most likely going to be bought by one of the big 3
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@jarr
Like it or not, even it capatilist societies, Monopolies are bad because they hurt the free market. That is why there are laws to prevent monopolies from happening. There is no free market if everything is a monopoly.
There are also laws to prevent price fixing in the market by collusion. Ask yourself where the real competition is in Canada.
Jarr, you make my point with Canadian cell providers. Their plan isnt to win customers with a free market solution by providing a great service to win new customers. Their plan is to maintain their current “apparent” monopoly by colluding with the other major players in the market to maintain high profits at the cost of the canadian consumer.
Is this a good business model? Should it be allowed if it hurts other companies trying to provide free market solutions (e.g. Wind, moblicity). This isn’t China or the former USSR. Customers in Canada have a right to expect regulation in our markets which provide and allow free market solutions.
If you don’t like it, that is because you probably don’t understand how free markets and capatilism actually work. From somebody who has experienced what the rest of the world has to offer in terms of cell phone providers the Canadian market is a joke and a laughing stock.
Rogers, Bell and Telus don’t think of us as anything more that a faceless source of revenue.
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You can’t possibly talk about competition as long as 3-year contracts are the norm!
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The simple fact is that businesses will always stick with the big 3 since they need reliable nation-wide networks to conduct business. This includes corporate employees and business owners who can write off part of their monthly plan and their Blackberry device price as cost.
The rest of course are consumers, and the ones with high income care less about what they pay for their cell phone but more about the devices been offered such as iphone. As long as the Wind Mobile and others do not offer top end devices, these consumers who shrug off $100+ monthly bills will continue to stick with the big 3.
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Over the weekend I was in Pincher Creek/Waterton Park Alberta.I have a Rogers iPhone 3Gs,My father inlaw has a Verizion flip phone.It was like a Rogers comercial but fliped,He had great service I didnot droped calls or no service was the norm for me.Service is the most imporent.He used to have a Bell phone for Canada but found Verizion a better deal.They are snow birds.
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The only way rogers would be able to offer unlimited plans is with a 3rd brand. If they offered it with the main brand or Fido, you would have existing customers switch rate plans, and they would in turn lose money.
By creating a new provider to offer those plans, they only get new customers or those who are willing o pay ECFs to switch. They increase their subscriber base, and make mad cash from those customers wanting to switch who are still on contract.
Good marketing ploy Rogers, and it might just work.
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5 years in, I see Wind, Mobilicity, and the other AWS players merging with Videotron to create a 4th wireless player…oops…by that time, Telus will be safely in the arms of its longtime boyfriend, Bell (George Cope sipping champaigne for masterminding the whole thing secretly channeling Mr Burns”Excellent!”) Rogers still politely referred to as Robbers… And all these sub brands? Still sputtering along…well maybe not Koodo… I think it has Kuddies (mispelled?) Comical humour aside, I can’t see much changing. To date, I have yet to see any major carrier respond aggresively to the new entry threat. Well except for Rogers with their Chatr brand….prices have not budged… Can’t say I blame them… Its all business and quite frankly they’ve got shareholders to answer to. That being said, I can’t see new entrants posing much of a threat, at least not in the short term, the best strategy would be for the new entrants to put aside their loathing of one another and work together to Kick some major telecom **s. Well at least the aws players can work to do that… Public Mobile, the loan wolf with undesired G spectrum, not sure what their strategy is 5 years out, but if it includes LTE, they may just beat their 10-1 odds….an aside to the AWS players lack of interest is their weak phone selection… No Android phone (well not through official channels) and most importantly, no data heavy iphone…ugh…I’m no Apple fanyboi, but if AWS carriers can’t convince Stevie JOBS to make one of his “magical” devices aws compatable, than you might as well call it day…its no secret… Even T-Mobile desperately wants the Iphone as its bleading customers…So guys… get some Hallmark cards and Fefdex them to Stevie…tell him how much you think he’s a genius….
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I haven’t yet seen a real competition. I do beleive that new carriers have certainly hurt Bell & Rogers.
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I think Chatr will fail. Despite the resources that Rogers has, just like Solo, Chatr will also go down as Rogers will not be able to compete with Wind and mobilicity or public mobile. They’ll have to bring prices lower with Fido and compete that way.
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I don’t see the new players, Wind, Mobilicity ofering the big 3 any real competition in the near to medium term and we will likely see some consolidation as weaker ones fall by the wayside.
The only really competitive market in Canada will be Quebec when Videotron comes on line. It is giving Bell a run for its money on land lines and will be a sigbificant competitor in Wireless
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we need to fight for lower pricies from the big 3. everyone gets better deals in states and euro
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So many of you doom every move the carriers do. How about some facts: many industries and organizations have proved that multi/sub branding WORKS. Every industry has different target markets. You’re foolish if you think that one company can appeal to every market without overcomplicating their products. The point of this move is an Unlimited brand, discount brand, and a premium brand. Mashing all those concepts into one brochure would do nothing but confuse the absolute piss out of everyone. This is a strategic move and a good one at that. Look at the success of Koodo when it launched. I absolutely hate Koodo but I’ll give Telus credit in creating a sub-brand that worked.
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@Robert:
So…in the context of Canadian carriers, a premium brand means paying more for less than the unlimited brand? Just for the name?
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@ Robert
What??!!??
Premium brand would imply premium service.
Tell me which of the 3 collaborators offer premium service?
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