Quietly, without the fanfare that usually accompanies the launch of a cellphone service in Canada, Telus Corp. has resurrected Clearnet as a discount wireless brand in Western Canada.
The Vancouver-based provider launched the new plan, which includes unlimited calling, as a trial in two markets - Red Deer, Alta., and Kelowna, B.C. But the company chose a very different strategy from competitors that have launched low-price brands, also called "fighter brands": It decided to tell hardly anybody.
The move brings to nine the number of brands now being promoted by the three dominant wireless carriers - three each by Rogers Communications Inc., BCE Inc. and now Telus. These multiple brands are battling against brash new discount providers, such as Wind Mobile and Moblicity, which have upturned market norms and depressed pricing for wireless services across the country.
But in addition to battling the new players, the incumbents see discount brands as a way to dull the sting of consumers cutting their landline phone service with traditional providers like Telus. The number of so-called "wireless-only" households is forecast to double over the next two years as wireless service becomes cheaper and more enticing - eroding a lucrative source of revenue both for traditional phone companies and cable companies offering home phone service.
Clearnet, of course, was the name of the wireless provider Telus bought for $6.6-billion in 2000, which catapulted Telus from a regional provider to the national stage. But until now, it has resisted the urge to fight back against the new entrants or wireless substitution with a low-end brand, as Rogers and Bell have done with their Chatr Wireless and Solo brands. Rogers made a big splash with the launch of Chatr and used its marketing to make claims that other new wireless carriers had shoddy service.
When asked, a Telus spokesman played down the importance of the company's move, and offered few details on how the plan would work. "It's a limited market trial," spokesman Shawn Hall said. "It would be premature to speculate on what elements of the trial might be expanded in the future."
Like fighter brands from Bell and Rogers, Telus's brand name is nowhere to be found on Clearnet's home page, and it is not immediately apparent that it is a trial service.
Analysts immediately characterized the move as a defensive play, pointing out that in the Clearnet service, Telus is offering customers the choice of bundling their wireless and home phone services together - a move that seems designed to stem the erosion of wireline phone cancellations. When Rogers, a cable company with less exposure to the home phone business than traditional telcos, launched Chatr, it was done as an offensive move against new wireless entrants.
"If you price it so you can get wireline and wireless cheaper together, than at least you get something [in revenue]rather than nothing," said Dvai Ghose, a telecom analyst with Canaccord Genuity.
At the same time, with around a dozen wireless brands in Canada offering service, it is unlikely that consumers walking into a mall will know which brands belong to which company. This benefits the largest providers, said Greg MacDonald of Macquarie Capital Markets.
"The offensive strategy is muddying the market with yet another unlimited, prepaid provider," Mr. MacDonald said. "Certainly, that's part of the strategy. At a certain point, there's information overload. And what it's going to do is force the new entrants to increase their advertising budgets."
Another thing muddied with Clearnet coming back is Telus's corporate message. More than one Bay Street analyst sent out research notes this morning thinking Telus had launched a new, national brand. Matthew Kelly, a managing director with the Level5 brand advisory firm, said it was unusual for a large corporation to play down a brand it has ushered into the market.
"It's unorthodox to launch a brand and really not give it support, unless it's a word-of-mouth brand like Starbucks," Mr. Kelly said. "I find it unusual that they are soft-launching. And, of course, they may still be planning a bigger launch."
Rogers wireless: The Toronto-based company's premium brand, with its best smart phones, aimed at the higher end of the market.
Fido: A mid-level brand some think is flailing as it languishes between premium and discount.
Chatr: A new discount, unlimited brand that launched by mocking the new wireless companies' service. The Competition Bureau told it to stop, and is taking it to court, seeking a $10-million penalty.
Bell Mobility: The Montreal-based national provider's rejuvenated wireless brand, with an emphasis on high-tech features such as live mobile TV.
Virgin Mobile: A youth-focused, mid-level brand with bold urban marketing. Advertises to exclusive "members".
Solo Mobile: A once-moribund brand revived as an unlimited talk-and-text service.
Telus Mobility: The top-shelf brand emphasizes high-end smart phones running Google's Android system.
Koodo Mobile: This mid-level brand has done much of the discount-style fighting for Telus.
Clearnet: Telus bought the brand 11 years ago and has launched a market trial in Kelowna, B.C., and Red Deer, Alta. Pricing and features are similar to Chatr and Solo, but is linked to land-line phones.