At midnight Wednesday, Public Mobile Inc. turned on its network in Toronto and became the third new wireless company to launch cellphone service since December.
It's the latest newcomer to the increasingly competitive sector, where 95 per cent of cellphone customers nationally are with Rogers Communications Inc., Telus Corp. or BCE Inc.'s Bell Mobility.
Public Mobile has been explicit about its target market: low-income Canadians and new immigrants. "We will consolidate the low end of the market," said Alek Krstajic, the company's chief executive officer.
When Wind Mobile launched in December, it began offering unlimited wireless data plans for smart phones at rates below those of the larger providers. Mobilicity launched in mid-May with even more aggressive pricing.
"The only way these guys are going to take share is by being highly, highly price competitive," said Brahm Eiley of Toronto-based Convergence Consulting Group Ltd.
The three new players are undercutting established wireless providers and introducing rates and options - such as unlimited international long distance - that were previously unimaginable for consumers. And with a competitive back-to-school season just months away, things are set to get even more interesting.
Mr. Eiley noted that the new entrants are undercutting incumbents by as much as 60 per cent, similar to what happened with the arrival of new cellphone companies in the United States.
The new players' coverage areas are limited, but for consumers in those areas the increased competition is translating into lower prices and better value. The incumbents, which have a much larger coverage area, are reacting by dropping some fees and becoming more creative with monthly plans.
All three newcomers have introduced variations on unlimited national long distance made from the home zone. Mobilicity also offers unlimited international long distance, Public Mobile has hinted that it's not far behind, and Wind Mobile said it may soon leverage parent company Globalive Communications Corp.'s other telecom assets to offer unlimited long distance to parts of Europe.
Despite the flurry of new services being launched, the reality is that new entrants are not really competing with each other. "The new entrants are sitting today with very negligible market share, so it's really the incumbents we're competing with," said Anthony Lacavera, chairman of Wind Mobile.
As Canadians gear up for the back-to-school season, when many parents outfit their children with new gadgets, companies are likely to become more ruthless in their quest for customers.
Canaccord Genuity analyst Dvai Ghose believes "the real impact of new entrant competition will be felt after the summer," especially as Quebecor Inc.'s Vidéotron Ltée launches service in Quebec, where competition is expected to be fierce.
What some of the new wireless plans look like
$35 unlimited wireless data plan
$45 unlimited national talk and text
$15 unlimited text and calling with other Mobilicity users
$65 unlimited text, talk, data, North American long distance
$24 unlimited local talk-only plan
$40 unlimited talk and text (text can be substituted for unlimited Canadian long distance)Report Typo/Error
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