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(Photograph by Lindsay Page for Report on Business Magazine)
(Photograph by Lindsay Page for Report on Business Magazine)

Top 1000

Why the wireless war is good for you Add to ...

Rankings of Canada's 350 biggest private companies View the full table

The stakes are high. Getting into the wireless business is not cheap. Together, the newcomers have spent billions of dollars to buy spectrum licences, build their networks and ink deals with handset makers. That means there will be more courting of customers this summer than Canada has ever seen. Simply put, Canadian wireless customers should expect to start feeling a lot more loved.

It's no accident that Mobilicity chose Scarborough, on the eastern edge of Toronto, next to a Super Sushi House and across from a Chinese Hut, to make its debut. Mobilicity will employ a similar strategy as it expands into nine other markets across Canada, including Calgary, Edmonton and Vancouver, in the coming year. Dobbin knows the downtown core is mostly the domain of Rogers, Bell and Telus, which dominate the corporate accounts and have cornered the iPhone demographic-largely urban customers who choose sleekness of product over lowest price.

Mobilicity and its ilk are targeting a different crowd that includes new and second-generation Canadians. It's a niche that, according to Dobbin, has largely been ignored (though arguably the flanker brands have been pursuing these customers lately). "If you look at wireless markets around the world, there is this thing called micro-segmentation, which really hasn't happened in Canada yet," Dobbin says. "I would classify our approach as looking at different segments of the market in ways that others may not have."

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So, Mobilicity is pushing $20 add-on plans for unlimited long-distance to select Asian countries, in the hopes that prospective customers will drop their home phones in favour of cheap wireless service for dialling overseas. Wind, having spent the past year using its connections with Orascom and Yak Communications, a long-distance reseller that Lacavera also runs, to leverage cheap airtime around the world, is also offering cut-rate international minutes. Public offers unlimited long-distance within Canada and the U.S.

The new guys are also aggressively touting unlimited local calling within their own networks. By catering to cost-conscious families and immigrant communities, they believe they can sell phones to people who don't yet own one-and a new market will be born.

It may not be that simple. Eager to paint a bullish picture, the upstarts claim that as many as 30 per cent of Canadians fall into this uptapped well of potential subscribers. The incumbents counter that a portion of those phoneless Canadians are unlikely to sign up for one-either because they've learned to live without mobile service or because they're simply not realistic customers. (Try selling a handset to a baby.) By some industry estimates, about 85 per cent of Canadians over the age of 15 are already toting handsets, with 8.5 million subscribers at Rogers, 6.9 million at Bell and 6.6 million at Telus (SaskTel and Manitoba Telecom Services have about half a million each in the Prairies).

A breakdown of Canada's telecom industry

The established phone companies plan to use their size as an advantage, subsidizing the cost of pricey handsets like iPhones and high-end BlackBerrys as long as customers commit to multiyear contracts. Bell Mobility president Wade Oosterman argues that customers actually prefer the contract model, as long as they don't have to pay full price for their phones-a notion both Lacavera and Bitove have made a point of criticizing. But Oosterman says it's simple math: "Handsets can cost you $400 each. If you're a family of four, that can be pretty steep," he says. "That's why we subsidize hardware-in return for your promise to stay with us for a while."

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