Blair Gable
When Rogers launched its discount Chatr Wireless Inc. brand, analysts spoke about an unexpected benefit for the parent company: It could deflate new competitors' momentum by injecting one more brand into an already confusing marketplace for consumers.
With all the established wireless companies already operating at least one so-called flanker, or discount, brand, the addition of yet another one might lead some consumers back into the fold of a company they thought they were leaving, analysts surmised.
But new wireless provider Public Mobile Inc. now says it has seen a boost since Chatr's launch, according to one of the company's top executives. Speaking at the BMO Nesbitt Burns' media and telecom conference in Toronto, Jim Hardy, Public's chief financial officer, said: "Our sales rates have tripled since Chatr came out."
When Rogers launched Chatr in late July, with prices nearly identical to some of the country's new wireless companies, analysts were divided about whether it was a pro-active or reactive move. BCE Inc. soon followed by changing its Solo Mobile discount brand to an unlimited talk and text service.
What was clear was that incumbent providers were bringing network and marketing heft to the low-cost wireless market, a move that threatened to hurt the already-fragile new entrants that were crowding the space. But Public Mobile, a private company that does not release subscriber statistics, seems to have emerged from the new competitive dynamics in better shape than expected, according to Mr. Hardy.
He added that Rogers and Bell are flooding the marketplace with advertising that is letting consumers know about "unlimited plans," which were previously unavailable in Canada. "They're creating awareness for the category [of unlimited talk-and-text plans]" he said.
However, Anthony Lacavera, chairman of the foreign-financed new wireless provider Wind Mobile, said Chatr's move is clearly aimed at Wind - since the rate plans are more similar, and Chatr has launched in exactly the same markets Wind has.
"We have not seen a change in sales since Chatr was introduced, since it's not a competitive offer to Wind," Mr. Lacavera said, alluding to the fact that Chatr does not offer "unlimited" smart phone data plans in addition to unlimited voice plans.
Public Mobile, on the other hand, has no smart phones at all, and will have to undergo extensive network upgrades to offer mobile video. Mr. Hardy said that future upgrades are possible.
Faced with the possibility that the next wireless spectrum licence auction may happen sooner than 2012, Mr. Hardy said he believes big, established providers such as Bell and Rogers should not be allowed to take part and that spectrum should be "set aside completely for new entrants."