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Upstarts in the wireless phone business will capture about 8 million new subscribers, prompting the established players to cut prices and refocus their efforts, a new study says.

And the established firms will see their market share drop from nearly 100 per cent today to 76 per cent five years from now as a slate of new competitors rewrites the map of Canada's telecom landscape, the study says.

Lower prices and new technology will help attract some 8 million new wireless customers by 2014, enlarging the pie for all players. But the new entrants will negate that growth for the established telecoms by capturing about 8 million subscribers themselves, says the Toronto-based Convergence Consulting Group Ltd.

Rogers Communications Inc., BCE's Bell Canada and Telus Corp. will respond to an onslaught of new competition by trimming prices and refocusing on their regional strengths, where they can bundle their wireless services with their other offerings, such as residential phone service, Internet connections and television.

“These guys have had a really amazing run and that run is over,” said Brahm Eiley, a principal of Convergence Consulting. “People are fooling themselves if they think the incumbents can actually hold on.”

Within the next year, four new wireless operations plan to launch, operated by Globalive Communications Corp., Public Mobile Holdings Inc., DAVE Wireless Inc. and cable firm Vidéotron Télécom Ltée. Two other cable interests, Shaw Communications Inc. and Eastlink, are expected to roll out services soon after.

Cable companies have already shown with their home phone services that they have the technology to compete successfully against the incumbent phone companies. (They will have 30 per cent of all local home lines at the end of the year, up from just 3 per cent in 2004). And Convergence expects the three cable firms to do very well in their respective regions when they launch into wireless.

For the non-cable new entrants, however, it will be a tougher haul. Globalive, Public Mobile and DAVE will need to offer very aggressive pricing to entice customers away from proven brands and service bundles, Mr. Eiley said.

“If they want to offer the same amount of minutes at [the] same price, good luck, it ain't going to work. They have to undercut,” he said.

Investment demands will be high and it will take about 10 years for the three non-cable companies to see real profits, Convergence estimates.

That fact makes it more likely that the three will pursue strategies to get bought out by one of the incumbents after 2014, when most of the wireless spectrum licences become transferable, Mr. Eiley said.

If some of the wireless startups build their businesses for acquisition, they will pursue market share ahead of profits, kicking off pricing wars that the domestic industry has never known, he said.

As public companies, Rogers, Bell and Telus will face pressure to keep prices and profits up, and they will find themselves looking locally to shore up market share. They might look at strengthening their bundled packages, improving retention offers or investing in their existing networks, he speculated.

As the Canadian wireless market undergoes a transformation, more consumers will come to rely on wireless as their sole source of telecommunications. By 2014, 23 per cent of households will be wireless-only, up from 8 per cent today, Convergence expects. But one core metric will remain unchanged. The top three players will maintain their current ranking by market share: Rogers, Bell and Telus, respectively.