Rogers Communications Inc. launched its discount cellphone brand, chatr wireless, in major urban centers across Canada on Wednesday morning.
The move, which was previously announced, is Rogers' way of targeting the cheap, unlimited talk-and-text market, which new wireless entrants such as Wind Mobile and Mobilicity have been focusing on since their launches earlier this year and in late 2009.
In a release, the company said chatr would be launching in Toronto, Vancouver, Calgary, Edmonton and Ottawa, with Montreal to follow, and would offer an unlimited talk plan for $35 and an unlimited talk-and-text plan for $45. chatr will not offer contracts and handset subsidies, and is offering a variety of cheap cellphones, some as low as $60.
These prices are at or slightly higher than other new players in the space, but will be offered over Rogers' national network. This gives chatr an advantage over the other new wireless companies, which are currently spending huge amounts of capital and effort building wireless networks across the country.
The so-called "flanker" brand is supposed to complement Rogers' existing brands, Fido and Rogers Wireless, by targeting a lower end of the market. But some analysts suspect that it is designed to muddy the crowding market with yet another brand, in an attempt to fight back against new competition.
"We believe that Rogers' decision to launch chatr at this time is as much an attempt to regain market share as to pre-empt new entrant success," wrote Dvai Ghose, an analyst at Canaccord Genuity, in a note to clients Wednesday morning.
There has been some speculation that BCE Inc.'s Bell Mobility will reposition its Solo Mobile brand, and analysts expect Telus to do something similar, perhaps with its Koodo Mobile discount brand.
Before chatr even launched, rival Wind Mobile was already offering chatr and Rogers customers a $150 credit if they switched over to Wind, which is also planning promotional events on Wednesday. And Mobilicity chairman John Bitove, after seeing chatr's relatively low pricing, threatened to file a complaint with the Competition Bureau, accusing Rogers of using chatr to kill off new wireless competitors, like his own company, and then phase it out gradually so it doesn't erode Rogers' high average monthly revenue per customer - which crept up further in the last quarter.
Rogers, which is not attaching its name to chatr in the tradition of flanker brands, which consumers often don't realize are owned by huge incumbent providers, has nevertheless used its significant leverage to negotiate a wide retail footprint for its new brand. At launch, the company said in a release, chatr would be available in "hundreds" of kiosk locations in Future Shop, Best Buy, Telephone Booth, London Drugs, Costco, and Zellers.
The actual launch data was the only mystery surrounding chatr, details of which had gradually leaked onto industry blogs and were discovered in trademark filings with the Canadian Intellectual Property Office. However, everyone in the industry expected Rogers to bring out the brand before the crucial back-to-school season, which has gradually become more important for wireless carriers than the Christmas selling season.Report Typo/Error
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