This year new-entrants worked hard to get their service off the ground. First it was WIND Mobile, then Public Mobile and finally Mobilicity. As for known new-entrant subscriber numbers: Wind will “be well north of 200,000 by the end of the year” and Mobilicity just declared they’ve “added over 50,000 new subscribers in just the fourth quarter”. Public Mobile has not released any official numbers.
The reason these new players came into play was due to a Government Spectrum Auction to increase competition. The Industry Minister stated before the auction 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 has certainly increased. Prices have dropped for both handsets and monthly plans. Various a nalysts and industry execs have stated that the Canadian wireless market cannot handle the number of carriers we currently have… thus believing that in 2011 we will start to see carrier consolidations. There is an interesting read in the Financial Post that says Public Mobile has “approached” the other new entrants or investors to merge and form a partnership. Public Mobile CEO Alek Krstajic said that “I don’t think there is any question in my mind that it would be good for all parties concerned that the new entrants consolidate. If you brought these three together, you’d have a really strong national footprint, distribution, call-centre efficiencies [and] stable pricing”.
In the same article a quote by Phillip Huang at UBS says that “Consolidation would repair the market structure… With fewer players price stabilizes”. Really? Is the market structure in need of repair and does Canadian pricing need to be stabilized? Are these not the reasons the Government created room for new entrants?
So if 2011 is the year of carriers being consolidated… who do you think will join together?
Source: Financial Post