{"id":1047,"date":"2007-02-14T06:35:00","date_gmt":"2007-02-14T06:35:00","guid":{"rendered":"https:\/\/mhgoldberg.com\/blog\/?p=1047"},"modified":"2007-02-14T06:35:00","modified_gmt":"2007-02-14T06:35:00","slug":"is-the-mobile-marketplace-working","status":"publish","type":"post","link":"https:\/\/mhgoldberg.com\/blog\/?p=1047","title":{"rendered":"Is the mobile marketplace working?"},"content":{"rendered":"
\n
ol\u00b7i\u00b7gop\u00b7o\u00b7ly<\/div>\n

Pronunciation: “\u00e4-li-‘g\u00e4-p&-lE, “O-<\/span>
a condition in which a few sellers dominate a particular market to the detriment of competition by others<\/span><\/p>\n

You’ll find that a lot of people use the term oligopoly<\/span> in reference to the Canadian mobile market. They point to wide price differentials between Canadian and US mobile calling plans; seeming indifference from the carriers; disciplined pricing; reduction in competition due to mergers; etc.<\/p>\n

However, last week’s disappointing wireless results from Bell may be signalling that the unregulated, free marketplace is actually working, managed by the power of consumer choice.<\/p>\n

A report last week from RBC Capital Markets includes a section called Bell Mobility Rate Increases Help Profitability But May Be Going Too Far<\/span>. In it, RBC CM says: <\/p>\n

Bell\u2019s $2\/month SAF increase to postpaid plans was frequently noted in our discussions with independent retailers and contributed to the slowdown in subscriber growth this quarter, in our view. …<\/p>\n

While the rate increase should narrow the ARPU gap with its peers and improve EBITDA flow-through …, we nevertheless believe that Bell\u2019s pricing increase by way of the SAF may be a hindrance to future growth as:
<\/span><\/p>\n

    \n
  1. neither Rogers nor TELUS plan to match the increase, which leaves Bell at a potential disadvantage as the SAF is one of the few billable items that is directly comparable across rate plans;
    <\/span><\/li>\n
  2. with rising penetration we believe there is less scope for such obvious rate increases (Rogers and TELUS achieved higher ARPU through stimulating usage and data services \u2013 not by having premium prices); and
    <\/span><\/li>\n
  3. with ongoing regulatory examination, frequent media reports comparing Canada\u2019s higher prices vs. the U.S., and a potential spectrum auction approaching in the next 12 months, rate increases may help to skew public sentiment against the industry.<\/span><\/li>\n<\/ol>\n<\/blockquote>\n

    In other words, RBC CM and the financial community wasn’t any happier about the SAF increase than anybody buying mobile phone service.<\/p>\n

    Net adds were down because potential new customers shopped elsewhere – signs that the competitive marketplace may be able to discipline itself. While existing customers had little choice – for now – watch what happens at renewal time.<\/p>\n

    We’ll be looking at churn as contracts come due in the next quarter. Wireless number portability<\/a> is coming in one month.<\/p>\n

    Technorati Tags:
    Bell Canada<\/a>, WNP<\/a>, RBC<\/a>, System Access Fee<\/a>, Rogers<\/a>, TELUS<\/a><\/span><\/div>\n","protected":false},"excerpt":{"rendered":"

    ol\u00b7i\u00b7gop\u00b7o\u00b7ly Pronunciation: “\u00e4-li-‘g\u00e4-p&-lE, “O-a condition in which a few sellers dominate a particular market to the detriment of competition by others You’ll find that a lot of people use the term oligopoly in reference to the Canadian mobile market. They point to wide price differentials between Canadian and US mobile calling plans; seeming indifference from …<\/p>\n

    Is the mobile marketplace working?<\/span> Read More »<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","two_page_speed":[],"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1047","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\nIs the mobile marketplace working? • Telecom Trends<\/title>\n<meta name=\"description\" content=\"ol\u00b7i\u00b7gop\u00b7o\u00b7lyPronunciation: "\u00e4-li-'g\u00e4-p&-lE, "O-a condition in which a few sellers dominate a particular market to the detriment of competition by • February 14, 2007\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/mhgoldberg.com\/blog\/?p=1047\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Is the mobile marketplace working? 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