What happens to amp’d in Canada
The LA Times is reporting that amp’d mobile has filed for bankruptcy protection under Chapter 11.
In Canada, the services are ‘powered by TELUS.’
What is the impact?
RCI on NYSE
Rogers is changing its NYSE stock symbol to match its Toronto moniker, RCI, effective June 15. Rogers has been trading under RG.
Why the change?
Its symbol for New York became available when Renal Care Group was acquired last year by Fresenius Medical Care (NYSE: FMS), a German firm that traces its history back to the year 1462.
Aren’t you glad you asked?
Just how cozy is Canadian wireless?
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.
Force majeure for ILECs
A few weeks ago, I mentioned that the CRTC will be launching a proceeding to consider types of exclusions for failure to meet Quality of Service standards.
Public Notice 2007-9 was released last week to look at the appropriateness of a force majeure type of escape clause for carriers in their retail and wholesale rebate plans.
The CRTC has proposed language like:
No penalty shall apply in a month where failure to meet the retail or competitor Q of S standard is caused, in that month, by fire, acts of God, labour difficulties (such as work stoppages, strikes, lock-outs, slow-downs and similar labour disrupting events), default or failure of other carrier, epidemics, war, civil commotions including acts of terrorism, acts of public authorities or other events beyond the reasonable control of the Company.
Should labour difficulties be included? The phone companies will argue that they shouldn’t be accountable for failure to meet their service level commitments during a labour dispute.
Who then should be called to account?
Should customers (retail or wholesale) pay full freight if quality is substandard? If you purchase a product and it is defective, would you allow the manufacturer to escape with an excuse like “sorry, it was raining that day” or “the electricians were on strike”? If your lawn care company provides less than committed service levels, what excuses would you accept and still pay full price?
Should phone service be any different?
Cure the disease
I just got around to reading the Competition Bureau’s comments on the AWS auction consultation.
Peter Nowak excerpted a great quote in his story in the National Post:
the Bureau submits that the appropriate way to compensate for any lack of competition attributable to the foreign investment restrictions is to remove them and not to simply accept them as a harmful contributor to a competitive environment in need of fixing.
In other words, rather than simply treating symptoms, the Competition Bureau suggests that we cure the disease.
Competition Bureau chief Sheridan Scott will be one of the keynote speakers on June 13 at The 2007 Canadian Telecom Summit. The National Post will be covering the event, beginning with a preview on the morning of the conference opening on June 11.
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