Later this week, we will be watching financial results from the major carriers, with Rogers and MTS Allstream reporting on Thursday and TELUS on Friday. Bell reports on Wednesday of next week and Videotron’s numbers will be in Quebecor’s release next Thursday. So, over the course of the next week or so, we’ll have a chance to compare the effectiveness of different approaches to telecom marketing in the past quarter.
Looking at the results posted by Glentel (the largest independent wireless retailer), it may have been a strong quarter.
The aggressive marketing and new enhanced phone plans for customers, first introduced by the cellular networks in the 2nd quarter, had a positive effect on sales in the 3rd quarter.
I exchanged some emails with some colleagues through the weekend. We discussed the variations in marketing mobile voice and data services. Most of the carriers have launched new devices – many of these targeting the back-to-school youth market.
One approach has been to drop prices. Another is to invest in differentiated products – some launching customized or exclusive handsets; some with unique network capabilities.
Last Friday, I wrote about Rogers’ trial of 7.2Mbps HSPA mobile data rates, among the first carriers in the world to launch this advanced capability. Rogers currently has the advantage of being the only GSM-based platform in Canada. This has given it access to a wider array of consumer handsets, generally at a lower cost than comparable CDMA devices, in addition to benefiting from global compatibility and revenues from inbound roaming.
All of these factors have contributed in previous quarters to Rogers’ strong subscriber numbers, enabling it to invest even more in higher speed services on its network. That will help attract high ARPU customers.
To those who posted comments or wrote emails directly to me in search of lower prices – be patient. I have said many times before that I like cheap prices too.
In the meantime, Rogers recent financial performance has given it the luxury of being able to seize upon an opportunity to invest in capital upgrades for which early adopters are willing to pay a premium for the most advanced services. [It hasn’t always been that way for Rogers; Rogers has borrowed heavily in the past to invest in technology, as you can read in the new biography High Wire Act: Ted Rogers and the Empire that Debt Built. Last night was the official book launch.]
Competition raises the bar on quality of service for customers of all the networks in Canada. Prices will come down, even if that happens at a slower pace than many of us would like.