John Bragg, left, with his son Lee at the EastLink head office in Halifax, May 19, 2010.PAUL DARROW/The Globe and Mail
Canada's wireless war is ramping up in the Maritimes.
EastLink Communications Inc. is poised to roll out its cellphone service in early 2013 in a bid to bring a fresh burst of competition to the East Coast. Its long-awaited mobile launch comes more than four years after the Halifax-based cable company spent $25.6-million for 19 wireless licences covering its Atlantic home turf, along with pockets of Ontario and Alberta.
Since EastLink owns wireless spectrum across roughly 85 per cent of its Canadian cable footprint, the success of its wireless launch, which would begin in Nova Scotia and Prince Edward Island after the holiday season, would determine how quickly EastLink extends its mobile service to the west.
Although chief executive officer Lee Bragg is keeping the exact launch date under wraps, EastLink's wireless debut will be a game changer in Atlantic Canada, where the company has been locked in a heated battle with arch rival Bell Aliant Inc.
Bell Aliant, which is 44-per-cent owned by BCE Inc., has been aggressively poaching cable subscribers with its newfangled IPTV service, while offering discounts for taking services including wireless from Bell Mobility. Although Rogers Communications Inc. also offers wireless service in the region, there is limited overlap with its cable operations. Telus Corp., meanwhile, only offers wireless.
"It is really sort of a bundled strategy we're going after. The Maritimes are certainly our core area, so we decided to start here," Mr. Bragg said in a telephone interview from Halifax, noting that EastLink stopped reselling Rogers' wireless service about a year ago. "The more you buy from us, the deeper the discounts in a bundle."
In addition to offering multiproduct discounts, EastLink is also expected to "undercut the competition in terms of data and combined voice-data pricing," according to a recent report by Convergence Consulting Group.
"In order to preserve their residential [land line] telephone subscriber base (and gain new subs), we expect that EastLink will offer the largest incentives to its triple/quadruple play customers," said Convergence in its report.
EastLink already has about 150 cellular sites set up across Nova Scotia and PEI with longer-term plans for up to 350, he said.
The company plans to level the playing field with Bell Aliant by concurrently launching Long-Term Evolution and older technology, known as HSPA, while also offering other new services including its new EastLink To Go mobile video service and its home security product.
EastLink is also trying to get a running start against another wireless newcomer, Wind Mobile, which owns spectrum in Atlantic Canada but has yet to launch there.
Additionally, EastLink's upcoming launch comes as larger carriers sharpen their focus on Atlantic Canada. Rogers, for instance, is spending $80-million to expand and upgrade its network across New Brunswick, Nova Scotia and Prince Edward Island to provide faster mobile speeds.
EastLink is owned by privately held Bragg Group. Its cable operations are now in nine provinces with roughly 550,000 television subscribers. But as the industry increasingly moves to a TV everywhere strategy, wireless service, especially mobile video, has become a key driver of future growth.
"We continue to want to grow the business. We find that it is more challenging now," Mr. Bragg said.
Founded by Mr. Bragg's father in 1971, EastLink's cable operations grew quickly by buying other small companies. "Now we find it is harder to buy our neighbours because they are bigger than we are. So now we've had to focus more on what additional products and services can we offer to the existing customer base that we have," he said.
Rita Trichur