Startup Struggles: Viability and Sustainability of Canada's Discount Wireless Carriers in Question

Posted by Knowlton Thomas

It's been more than a couple of years now that the new entrants such as Wind Mobile and Public Mobile have been competing for Canadians' business in the wireless space. But after all this time, the combined market share of the discount wireless carriers is a paltry 3.4%. The infamous Big Three of Rogers, Telus, and Bell still control at least 92% of the market in Canada. So what's up?

Moody's, for one, questions the progress Canada's wireless industry has made as a result of these new companies and their competitive offerings. "We question whether the new entrants ... are viable and whether their impact on the market will be sustainable," said vice president Bill Wolfe in a report.

Further, the startups may not be operating profitable business models. While the incumbent carriers generate about $60 per revenue per month from their consumers, the startups generate an average of only half that, and profit margins - while specifically unknown - are likely significantly lower. Indeed, Moody's suggests that some or all of the discount carriers may be losing money.

Moody's believes that this may be why the Canadian government recently loosened restrictions on foreign ownership of Canadian telecommunications companies, and why Ottawa decided to reserve 25% of the spectrum in the upcoming auction for the new entrants. While these moves will take a long time to materialize, Moody's affirms that the Canadian wireless market is still poised to become a more competitive environment in the coming years.

Photo: Mark Blinch, Reuters

Company:
Wind Mobile
Website:
http://www.windmobile.ca
Location:
Toronto, Ontario, Canada

Simply put, we want to create the most unforgettably positive customer experience in Canada. How? By speaking with you, not at or over you. By making every site you visit, every store you set foot in and every call you have with us into a meaningful conversation to help build something better - together. We'll make it as easy as possible to be a customer. You'll have more control over your mobile experience than... more

Company:
Mobilicity
Website:
http://www.mobilicity.ca
Location:
Vaughan, Ontario, Canada

We believe that Canadians deserve an alternative wireless experience that delivers better value, more freedom and most of all choice. Simply a better wireless experience No Term Contracts Unlike other providers that lock you into a term contract, Mobilicity has no term contracts or cancelation fees. We are so certain that you’ll love us and want to stay that we don’t have to force you – the choice is yours to make... more


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Knowlton Thomas

Knowlton Thomas

Knowlton is the managing editor of Techvibes. Based in Vancouver, Knowlton has been published in national publications and has also appeared on television and radio. Previously he was an editor for New Westminster weekly The Other Press and served on its board of directors. When not working, Knowlton enjoys playing tennis, hiking, and exploring weird side streets. more



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