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Mobilicity on Chatr: “they’re launching a phone service basically trying to duplicate to ours”
John Bitove, Chairman of Mobilicity, said in an interview with BNN that Rogers launching their new entry level brand “Chatr” is “ridiculous, they’re launching a phone service basically trying to duplicate to ours, only in the markets we’re launching in and if they like the idea so much then why don’t they apply it to the whole system across the country… they’re trying to create a flanker brand that they can subsidize through their existing network and a lot of their other infrastructure. I know they talk about setting somethings up independently, but overall it’s really just a flanker brand that they are just going to subsidize to try and hurt the competition. Mobilicity is off to a great start and they must see it in some of their deactivations… did I expect competition? Absolutely against the Big 3. I think this is blatantly unfair.”
The big part of their argument will be part a section in the Competition Act called the “Abuse of Dominant Position” It reads that the “use of fighting brands selectively on a temporary basis to discipline or eliminate a competitor”.
Bitove continued to state that “I’m not saying competition always has to be exactly fair, But you’ve got to watch how far you go in killing off your competition with unfair tactics. That’s what the Competition Act is supposed to protect in this county.”
The Chatr brand is rumuored to be launching in a couple weeks in and have coverage “zones” in urban markets such as Toronto, Calgary, Edmonton, Vancouver and Ottawa. They will set up shop with kiosks located in malls and in retail outlets such as Future Shop and Best Buy. Chatr will offer no-contract, low-cost devices and 2 monthly rate plans with unconfirmed price points: Unlimited Talk for $35 and Unlimited Talk & Text for $45. In a slide presentation we were send it does show that Chatr will directly compete with new entrants Wind Mobile, Public Mobile and Mobilicity. All the new entrants off offer Unlimited calling, various monthly plans and no contract device options.
What do you think… is this new Chatr brand ridiculous? Is Chatr created to duplicate the new entrants? Or will it lower prices and offer customers even more competition in the market?
(Check out the complete list of Chatr presentation slides here)
Discussion
39 comments for “Mobilicity on Chatr: “they’re launching a phone service basically trying to duplicate to ours””
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“What do you think… is this new Chatr brand ridiculous? Is Chatr created to duplicate the new entrants? Or will it lower prices and offer customers even more competition in the market?”
Yes, yes, no.
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The fact that they’re creating a new brand to do this and only doing it in the cities Wind and Mobilicity have launched in so far gives Bitove’s arguments some merit.
Rogers does have a national network so there is no reason they can’t launch this all across Canada. It would actually make sense for Rogers to launch this everywhere to get to customers before the new entrants do. Fido is their discount brand, so it makes no sense to establish a new brand and spend money to get awareness for Chatr, when all they really have to do it throw in caller id and a few extras on a city fido plan to get to an equivalent rate plan.
There’s nothing wrong with Rogers competing directly against the new entrants, but they way they’re going about this is really stupid.
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i think rogers trying to kill off fido coz they are not paternally born brand
fido is still… nonetheless, the adopted one….
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I see them copying WIND, not Mobilicity. WIND isn’t complaining.
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I dont see a problem with this. This is what we all wanted. We wanted the big 3 to lower their prices and offer unlimited. Chatr is an extension of Rogers so in essence Rogers is offering this service on a great network for the same price as the new entrants.
Who cares if Rogers’ core brand doesnt offer the unlimited plan. If Chatr has it then switch to Chatr if you want the stability of an established network like Rogers. Frankly I dont care if the new entrants fail or succeed. Canadians have a strong taste of unlimited for less and its not going to go away. If they fold up shop, a new entrant in the next spectrum auction will probably emerge amid even tougher regulation in favor of new entrants and against the big 3.
Dont hate people, remember, this is what YOU wanted.
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If you did not plan for such elementary and basic business reaction from the market leaders (compete through another brand similar as yours) that means for you all new entrants is about time to pack and move out to something else. Too ugly and crazy to come around with such thing as going to court against actually free competition you supported in the past, we’d have expected this reaction from windy boys not from Mobilicity this will hit in your brand badly
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Yes rogers is trying to duplicte tha new entrants,
But they are being cheap about it by not offering data or smartphone (or maybe they will)
Limiting Chatr only to cities tha new entrants operate in,
Charging out of zone rates similer to fido plans pre 11/04/2008 or cityfido plans is Varry low down unfair and cheap because rogers has no need to do so, they have a nation wide network!
in responce to Johns statment ” if they like the idea so much then why don’t they apply it to the whole system across the country…”
As much as i agree with that, none of tha big3 will ever do so..
it should be commen sence that if they did all of there customers would change there plans and would no longer pay $200 to $400 monthly !
They would see an unimaginable drop in there revenue..
And they only want to increase revenue..
The dream of tha big companies not raping there customers is just that, A DREAM.
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Chatr is using Rogers’ network so it has the best network offering against the new guys. The lack of data makes them less in competition with the other guys. Its simply a talk n text so in reality its only going against public. I really don’t get why they don’t launch everywhere it be so much easier and be able to slay Wind and Mobilicity. I like how Wind embraces it and they are starting for a price war.
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Rogers should be fined a few million dollars for their anti-competition practices. They would have been fined long ago if they operated in a free region like Europe.
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Too much politics in Canada about pricing and plans and phones. I want competition to rise, why is mobilicity making such a big issue if Rogers is copying their prices. If mobilicity is unpleased with this, then mobilicity can fight with rogers by reducing their rates, or have some scheme come out on their end. Look at England, Germany, India, China and so on, these countries have more competition then Canada. Foreign countries prices are very low and the foreign countries use a system like free incoming and guve extra minutes for free each month. I know Vodafone, O2, Airtel, T-mobile and other carriers have free incoming calls for life. This way a person does not have to top up ever to recieve an incoming call. Competition like that is great. Canadian wireless companies have to realize how to handle competition in the business field. Come on its a business for god sake. Canada is such a developed country yet so behind in the wireless field and competition compared to the rest of the foreign countries
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I hope Canadians aren’t duped into signing on with Chatr. As soon as Rogers eliminates the competition, rates will soar through the roof and Chatr will disappear.
If you believe otherwise, you’re fooling yourself!
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This makes sense and Rogers is smart. They wont make Fido their “wind brand” since it will destroy the profitability of Fido.
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The big three enjoy much customer loyalty…. methinks this will evaporate fast. What is happening now (be it for better or worse) will kill off (in short shrift) the ugly three year contracts we currently are subjected to. Let it happen soon, And let three year contracts be a thing of the past.
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@Jim
Most consumers won’t know Chartr is part of Rogers. Just like how people don’t know Koodo is with Telus. They are just going to look at the prices not knowing it will come haunting them later.
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WIND Needs to go INTO BESTBUY/ AND FUTURE SHOP ASAP
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SO Retarded!!! I mean C’MON!! Seriously! They have a HUGE network, why would they limit you to a zone other than to compete with only the new entrants?! F**k you ROGERS I hope you burn in hell! =p
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I have mixed feelings for this one… Yes Rogers is being a little unfair…… But the new entrants should have this as a business plan to compete, if not then it is nobody else’s fault.
What really should be looked at by the competition bureau is how the big three (ROBELUS) fix their prices and offers. All of their special offers for new signups are identical. All you need to do is look at their websites. If one company comes up with ‘double your minutes’, other do as well, and the list is endless…
THIS IS PRICE FIXING = ANTI-COMPETITIVE BEHAVIOUR
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Chatr is going to be a wolf in sheeps clothing. As was stated in the beginning of the article, which everyone should ask Rogers, “Why not apply these offerings to your existing brands?”
The reason why Rigers will NOT do that is because the CEO of Rogers has already said that, “Rogers is our premium brand and we like the money we make from it.” This was during an interview a couple months back when he also said Rogers isn’t scared of WIND or any of the other new entrants. LOL Rogers, gg. Hope your dirty briefs get exposed all over the media when Chatr launches.
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Agree 100% with last post. Rogers goal is to create a flanker brand for these local markets, crush the competitor, then close up shop.
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Mobilicity isn’t about competition, they’re about running to the govt regulator and suing anyone at every chance they get! Just like the Big 3.
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The problem with Chatr succeeding is that since you’re not on a contract, they’ll just do like they’ve done in the past:
Fido: original CityFido unlimited plans increasing in price if you don’t sign a new 3-yr contract
Rogers/Telus/Bell: since SMS is not expressly written about in the terms of the contract, begin billing 15c per incoming text
So it’s doubly important we support these new companies that will *hopefully* grandfather their old rates if/when they increase their rates down the road.
Then again, it’s all a crap shoot, due to no contract = no guaranteed pricing. Would be a huge PR disaster, though, if they suddenly increased the rates for all existing customers. But without Wind/Mobilicity/Public Mobile keeping Rogers in check, Chatr is liable to do just that in order to drive customers back to Rogers/Fido.
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Some may believe that what Rogers is doing is simply reacting to the market and providing competition for the new providers. However, Chatr is just like a little hand grenade. Rogers will pop them up, set them loose wherever the new guys have started up and work to destroy them. They will use their big name and big network to undermine and chase off the emerging carriers with bully tactics. Then, once the dust settles, Rogers will either fold up or rebrand Chatr and boom! Up the prices will go and say Bye-Bye to any unlimited packages, at those prices anyway.
So, if you still think this is fair business practise, give your head a shake and enjoy emptying your pockets.
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no – it’s not ridiculous, it was expected (Banana Republic owns the Gap, so that it can compete among different “tiers” in a similar manner). You don’t see “cheap stuff” in a Banana Republic store (so as to keep up the image, similar to what Rogers is doing with Chatr)
no – Chatr doesn’t include unlimited data unlike the new entrants, and the pricing for options (i.e. like voicemail) is much different than the new entrants
yes – prices are lower – this one is obvious. One year ago we didn’t have any “unlimited voice” plans, now we have 4 (wind, mobilicity, public mobile and now Chatr – choice is good)
yes – but not in the long run. Chatr “is” the definition of competition. Rogers is now “competing” more “aggressively” because of the new entrants. this is competition 101. as the industry matures and rates come down, the industry will have to consolidate – much like any other industry, in order to maintain profitability. so in the long run, competition will lessen – but the service will become like a utility and cheap because through consolidation and scale, the cost structure will decline to a point where the big 3 or big 2 can make a profit at that lower price point.
good questions.
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How about this just come out with a plan, unlimited talk and caller id for $10 and let’s see what the big 3 do..
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I dont see it unfair!
Rogers is challenging new entrants by Chatr in a fair way, similar zones and pricing, no data but on a very reliable network. So overal its a challenge not a killer.
I dont understand John Bitove’s point: “if they like the idea so much then why don’t they apply it to the whole system across the country”?!! If they did that, then new entrants would be killed in embrio! and that would be “Abuse of dominant position”.
Overal, I liked how Wind responded. They proved to be professional and understand the business from their global operation but Mobilicity, hmmm So I would try to expand my zones, focus on data proposition and VAS to diffenretiate myself against Chatr’s strong network instead of nagging and complaining, if I were John Bitove.
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That’s usually what competitors do; geez, does this guy know ANYTHING about running a company?
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Rogers and the big 3 would love it if Mobilicity came out with a $10 plan.
1) that would be anti-competitive because it’s at an unsustainable discount (i.e. they’d be running at a loss)
2) it would lead Mobilicty to run out of cash much sooner. Mobilicity is backed by private investors who want to make money, not lose money. If they run out of cash, you can be sure investors will not put any more into it
3) with the company bankrupt, it would sell its customers back to the big 3 and we’d be back at status quo
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I see jarr what you mean.
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I am glad the good people see Rogers for what they are. I remember the late Mr. Ted Rogers running to the CRTC over big bad Bell at the drop of a hat, complaining of dominant position. How else do you think he kept his cable monopoly. Which, inturn funded his cellular company in the early years.
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Where I think Mobilicity hasa point is the fact that Rogers has a much lower infrastructure cost with there new low cost entrant because the expensive stuff like the towers and transmitters are already in place.
That gives the new company a leg up WRT to capital costs and thus they can be priced the same as or lower and:
a) make even more money per subscriber than the new entrants
and
b) don’t have a massive debtload to service that the other new entrants do.
While it may seem to be nothing more than whining by Bitove he does raise some important questions I think about Rogers/Bell/Telus actions here WRT to the new players and their responses.
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The point of the matter is Rogers is fooling all of you. They want to crush the new entrants and then slowly raise prices back up. This is the same thing they did with City Fido 6 years ago.
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I didn’t know that this was only going to be in the cities where the new incumbents are. The Mobilicity guy is right, this is blatantly unfair and Rogers will be subsidizing Chartr to stomp out competitors.
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yup. stomp out the competitors (but give canadians more choice)
pretty good deal in my opinion.
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No, because once this new company has achieved its goal (remove competition) the prices will go back up. Horrible deal. The Telecom industry is not the only place where this happens.
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Here’s the joke:
Start-ups, with network setup costs, use ‘zones’ to target high population centres where they can gain some market share without deploying masts in the country-side for <1000 users. Their pricing and roaming fees reflect this, and in an ideal world, you wont roam into the boonies anyway, so your fees should stay steady.
Rogers, Telus & Bell, rather than keeping their ‘nation-wide’ coverage as a sales pitch with more competitive plans, recruit the same ‘flanker’ brand idea and any lost soul who signs up will still get hammered when roaming, much like their usage on one of the start-ups.
Confusion and market saturation, rather than clean, defined competition. Rogers+Fido+Chatr, Telus+Koodo, Bell+Solo+Virgin = 8 ‘companies’ competing against the new startups, all with considerably more marketing muscle.
Even if flanker brands ARENT subsidised by the parents, the holding companies can still write off the exercise as an attempt at ‘market expansion’.
Competition? What competition? Rogers Telus & Bell are like WWE Wrestlers. Put on a good show but no-one really gets hurt..
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@Gquie Oh yeah? I live in Timbuckfuckingtwo, insert territory here. I can’t use this service. Now what? Think before you speak.
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@Macer B Actually the law says it isn’t.
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This is obviously a ploy by Rogers to destroy the new entrants. They want to maintain the fools who signed multi year contracts with Rogers and Fido by starting a new brand.
Rogers will raise the rates later on to make up for the losses they incur by starting chatr.
Anyone who joins chatr will be put in the back of the queue when it comes to dropped calls. When there is network congestion on Roger’s network, chatr will be the first to get a dropped call.
Mobilicity is correct in their accusations about Rogers and I hope the Competition Bureau sees this.
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I just received a flyer from Mobilicity claiming that its Blackberry 9700 uses MS windows mobile 6.5. Can anyone explain me as to why Mobilicity is making such wild claims. Have they gone mad or is it just another stunt to gain notoriety?
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