It is easy to point to the national subscriber share of Canada’s major wireless carriers and complain about a cozy oligopoly. After all, if you look at the numbers with a little blurred vision, the big three each have about a third of the market.
Such a simplistic assessment fails to consider substantial regional differences as seen in the table below.
| Wireless Subscriber Share (%) by Province (2005) | ||||
|---|---|---|---|---|
| Bell Group |
TELUS | Rogers | Other | |
| Canada | 32 | 27 | 37 | 4 |
| Newfoundland and Labrador | 86 | 10 | 4 | 0 |
| Prince Edward Island | 81 | 10 | 10 | 0 |
| Nova Scotia | 63 | 11 | 26 | 0 |
| New Brunswick | 73 | 6 | 21 | 0 |
| Quebec | 48 | 20 | 33 | 0 |
| Ontario | 38 | 18 | 44 | 1 |
| Manitoba | 0 | 12 | 28 | 60 |
| Saskatchewan | 0 | 3 | 17 | 79 |
| Alberta | 12 | 61 | 26 | 0 |
| British Columbia | 10 | 46 | 44 | 0 |
Interestingly, when looking at these provincial numbers, US consulting group ETI suggests that this table provides “important evidence of market dominance and concentration”. This is seen as leading to a less competitive wireless market, contributing to higher consumer prices.
What is the proper way to characterize the market? Is it a comfortably balanced market shared by 3 players or do we have genuine rivalry between the carriers, driving battles to improve market position province by province?
People seem to think that US-style price-based advertising is the real evidence of a competitive marketplace. I have a colleague who likes to say that price discounting is a lazy approach to marketing. Canadian carriers have learned from experience that, in a starvation contest, the fat guy usually wins.
So, instead of suicidal price discounting, we have carriers advertising that they are building “Canada’s [insert superlative here: best quality / fastest / most powerful / coolest] networks”. We have video calling from one carrier, another designing their own phones, another re-launching a new brand. Adding enterprise productivity enhancement services, corporate tracking services, turn-by-turn directions, multi-service bundling, and on and on.
All of the carriers looking for an edge to improve their attractiveness to the unserved market. All of the carriers trying to improve their share of subscribers and share of revenues. Province by province and nationwide.
Are these behaviors consist
ent with a cozy comfort with carriers’ current market positions?
Once again, we see how important it is to scratch below a superficial assessment of the numbers.