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Canadians prove to be laggards in buying cellphones

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SIMON AVERY

From Monday's Globe and Mail

Canada lags other developed nations in mobile phone ownership, falling behind a global average of 30 countries, says an international survey being released today.

Only 69 per cent of Canadians between the ages of 16 and 60 use a cellphone at this time, compared with 90 per cent in the United States and 97 per cent in Britain.

"Canadians do not have the same attachment to ... mobile phones as the rest of the world does," said Michael Ennamorato, senior vice-president at TNS Canadian Facts, a division of Taylor Nelson Sofres PLC, which conducted the global survey.

One of the reasons Canadians are frequently reluctant adopters is because the quality of their land line phone service is both relatively inexpensive and of good quality, he said.

The survey results won't surprise some players in the global telecommunication industry who are looking at the scene in Canadian wireless today and seeing lucrative growth potential.

Fifteen companies have bid close to $4.3-billion for new wireless spectrum being auctioned off by Ottawa. That figure, which could rise further this week as the auction winds down, is significantly above the $1.5-billion to $2-billion that government and financial analysts expected the spectrum to fetch when the auction began in late May. It is also, proportionally, a much higher price than what a similar slice of spectrum garnered in the United States a couple of years ago.

But there is one red flag in the survey results that bidders might want to note. Among the nearly one-third of Canadians who do not own mobile phones, most have no intention of purchasing one within the next 12 months.

TNS terms this group of consumers "rejectors," and classifies 23 per cent of all Canadians as such. That is one of the largest groups of rejectors in all countries surveyed, and is third behind Vietnam (35 per cent) and Mexico (34 per cent).

The incumbent phone companies in Canada and the hopeful new entrants should also note that consumers here are unwilling to pay a high price for their next phone, and expect to keep the model they have for 3.5 years on average.

Most Canadians with a phone today are on their third model, a figure comparable with the market in Mexico. In Hong Kong and Britain, however, customers are on their sixth model.

Some hardware companies are already taking advantage of the global trends emerging among cell phone owners. Finland's Nokia Corp., for example, is building an online music store. The world's largest manufacturer of handsets plans to offer an annual subscription with some of its phones to access the music. To renew the subscription after the year, European customers will have to buy a new phone.

Mr. Ennamorato suggested Canadians' frugality might stem from the phone operators' habit of locking consumers into three-year plans in return for heavily subsidizing their handsets.

"There are clearly segments of the Canadian wireless population that are leading-edge, and want the latest and greatest, but on balance there is a certain inertia in this market," he said.

TNS's Global Telecoms Insight study was conducted in 30 countries. In Canada, 550 people were randomly interviewed.

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