BCE Inc. is launching a third wireless brand, dubbed Lucky Mobile, that will target low-income and budget-conscious customers with inexpensive monthly plans focused on voice calling and texting.
The company planned to announce the name and plans for the brand on Friday after signalling during recent earnings calls that it intends to get more aggressive in the market for basic prepaid wireless services, which don't require customers to pass a credit check or sign a contract.
Canada's national carriers, BCE, Rogers Communications Inc. and Telus Corp., tend to focus most on postpaid customers, who typically sign two-year contracts and purchase expensive smartphones that they pay for in increments over the contract term, along with monthly service charges that often include expensive wireless data packages.
Most of the Canadian industry has shifted from prepaid to postpaid customers in recent years and even the so-called flanker brands of the Big Three (Virgin Mobile for BCE in addition to its main Bell Mobility brand, Fido for Rogers and Koodo for Telus) heavily promote their contract-based options.
But there is still a market for prepaid products – among new immigrants to Canada who have not established a credit rating, as well as customers who want to carefully control monthly costs – and BCE has grown concerned that it is not winning as many of those potential subscribers as it could.
Its main rival, Rogers, has been dominating the prepaid market, taking advantage of its Chatr brand (which absorbed all Mobilicity clients after Rogers acquired that startup in 2015). Even Telus, with its own discount brand, Public Mobile, has been wooing more prepaid customers than BCE.
In the most recent quarter, Rogers added 97,000 new prepaid customers while Telus attracted 9,000 and BCE lost 10,200. Shaw Communications Inc.'s Freedom Mobile, which only operates in British Columbia, Alberta and Ontario, added 12,000 prepaid customers in the period.
"It's a new growth area for us," Claire Gillies, vice-president of marketing at Bell Mobility, said in an interview. "It's really about looking at the market, what the potential is, and looking at segments that we're not in that our competitors are participating in. And we thought we could do it much better than they are today."
Lucky Mobile will launch on Monday to customers in certain parts of Ontario, B.C. and Alberta, with monthly plans starting at $20 (the cheapest plans do not include any wireless data). Customers can either bring their own smartphone – which will be easier as of Friday, when a new regulation means carriers must unlock devices at no charge – or purchase one from a selection of lower-end handsets.
BCE says it will offer the service in 17 "zones" covering most big cities, and Ms. Gillies said the company would consider expanding to other provinces next year.
BCE will save on certain costs associated with Lucky Mobile by not selling the service in its own branded stores, but rather by phone or in certain retailers – such as Walmart and Wireless Wave. The company will also use a web-based self-service model for customer support and only offer 3G service, reserving its LTE (4G) network for clients of its more expensive brands.
In the third quarter, BCE reported the highest average revenue per user of the Big Three at $69.78, with Telus second at $68.67 and Rogers, which has the largest prepaid subscriber base, at $63.70.