The country's largest wireless operator is extending its subsidy model for cellphones to personal computers starting today in a bid to get people using more mobile data.
Rogers Communications Inc. will offer a 30-per-cent discount on the price of Hewlett-Packard Co.'s popular Mini netbook computer to customers who sign a two-year data agreement. The devices connect directly to Rogers' wireless network and fall somewhere between the categories of smart phones and laptop computers.
Smart phones have proven popular for light Web browsing - or "a three-minute experience" - laptops are well-suited for three-hour sessions, and the netbook is ideal for "the 30-minute experience," says Jon Spencer, director of mobile broadband at Rogers.
Rather than cannibalizing one category or the other, the company is trying to satisfy "customers' insatiable demand to connect" to the Internet, which has evolved from a source of information to an enabler of communication, he said.
Rogers says users of its plug-in cellular modem called the Rocket, which can wirelessly connect any PC with a USB connector to the Internet, have proven that customers are looking for a secondary means of access to the Web. Demand for smart phones, including Apple Inc.'s iPhone, and the Rocket drove up Rogers' wireless data revenue 43 per cent to $298-million in the first quarter compared with a year earlier.
For HP, this marks the second agreement in North America to sell its Mini netbooks in partnership with a phone company. In May, Verizon Wireless, the largest U.S. wireless carrier, began offering the devices for less than half their normal retail price.
Rogers and HP have agreed to an exclusivity period in Canada lasting until at least the end of September and the back-to-school shopping season, said Jenna Mann, business development manager at HP.
For computer makers like HP, netbooks represent the fastest-growing segment of the market. Global netbook shipments increased sevenfold to 4.5 million during the first quarter of 2009 compared with the same quarter last year, comprising about 8 per cent of all PC shipments, according to market research firm IDC.
Rogers says it is targeting consumers and small businesses but has opted not to sell the HP Mini itself. Instead, it will rely on Best Buy and Future Shop, two of the largest electronic retailers in the country, to sell the computers and the data plans. The data plans are priced the same as the ones for the Rocket modem, starting at $25 a month for half a gigabyte and rising to $85 for five GBs. Numerous other charges are added, including a $7-a-month system access fee.
Competitors Bell Canada and Telus Corp. are not currently subsidizing netbooks, but they also sell USB modems that carry similar pricing plans as Rogers'.
Mr. Spencer says the average Rocket customer uses about 1 GB of data a month, but usage patterns generally increase as customers become more accustomed to the products and technology.
