Wednesday was a busy day. Recovering from Halloween candy-induced sugar shock; Finance Minister income mistrust; client meetings; industry briefings; and, the Canadian Information Productivity Awards. BCE’s 3rd quarter results got lost in shuffle.
The wireless industry held a briefing Wednesday to help the community of analysts better understand the competitive landscape as described in their recently released commissioned reports from Wall Communications: “A Study on the Wireless Environment in Canada” and more catchily entitled “An Examination of Issues Raised in the Telecommunications Policy Review Panel’s March 2006 Report Regarding the Canadian Mobile Wireless Services Industry.”
The Canadian wireless sector has been feeling under attack lately. The CRTC has imposed number portability under a more compressed timetable; it is planning to consider equal access to long distance competition on cellular; consultants like Seabord Group have released studies that suggest Canadians are paying 60% more than equivalent US plans. Seabord says price is a hurdle that holds back Canadians’ adoption of wireless services.
So CWTA released the Wall reports as its rebuttal and had the authors available for Q&A.; While I agree that there are a number of factors that contribute to wireless penetration lagging the US, I am not pursuaded by Wall Communications that our prices are just fine, thank-you.
The Wall report says that Seabord assumed average use of 500 minutes in looking at comparable US plans, which Wall claims is too high. Canadian minutes of use aren’t that high, but the industry numbers include pre-paid, which Wall acknowledged brings the average down. Industry average (pre-paid and post-paid) is closer to 400 minutes per month.
When pressed to give a better post-paid number to allow Seabord to defend its claim, the subject was changed. I note that Rogers’ most recent results indicated that their average post-paid customer generated 541 minutes of use per month for the first 9 months of 2006, up 50 minutes from a year ago. It seems to me that Seabord’s use of 500 was pretty good.
Industry Canada will soon be soliciting comments on rules for its next spectrum auction, including an examination of whether incentives such as a spectrum set-aside should be introduced to attract more facilities based wireless carriers. CWTA will need more convincing evidence to demonstrate that we already have sufficient levels of competition.