WIND Mobile, Mobilicity & Public Mobile withdraw from CWTA

[Igster]

After careful consideration, WIND Mobile, Public Mobile and Mobilicity today announced their withdrawal from the Canadian Wireless Telecommunications Association (CWTA). The three mobile service providers say the move is a direct result of their long-standing, mounting frustration with the CWTA's consistent bias in favour of Rogers, Bell and TELUS on a wide variety of issues. From this point, the CWTA does not, and cannot claim to, speak on behalf of the Canadian mobile wireless sector.

http://www.newswire.ca/en/story/1143...ns-association

Welcome to the protectionism that is Canada

[OldDutch]

Originally Posted by Igster

Welcome to the protectionism that is Canada

I think this is an association, rather than government body. This is like a private club that isn't treating some of the members with respect. So they quit.

Doesn't show protectionism per say, rather that the rich old guys are running the private club, and the junior new guys are walking away.

[Igster]

Originally Posted by OldDutch

I think this is an association, rather than government body.

The Association represents the industry before governments and various regulatory agencies. While primarily involved with the activities of federal agencies such as the Canadian Radio-television and Telecommunications Commission (CRTC) Industry Canada and Health Canada, the Association is increasingly active at the provincial and municipal levels.

http://cwta.ca/about-cwta/advocacy/

So yes, you are correct, they are an association, they do seem to try and work alongside government bodies and represent the industry on a whole, which in turn would help dictate policy and how these corporations present themselves to the general public, etc.

Seems to go hand in hand IMO.

[Igster]

And here's where it all starts to go south for the consumer once again:

TELUS reportedly in talks to acquire Mobilicity, plus Public Mobile is looking for a buyer

http://mobilesyrup.com/2013/04/12/te...g-for-a-buyer/

[Dorkmaster]

What does this mean for these companies? What impact will it have?

[Igster]

From what I can see, these alternative companies are fed up with Canadian government regulations protecting the big three. They are fed up with the very association that was seemingly put in place to help them, but seems to protect the big three as well. They finally are realizing it's a losing battle and will end up selling to the big three, which will in turn do nothing to help us, the consumer.

[I_H8_Crawford]

I can't speak for Wind, but Mobilicty IMO was built to be bought out.

Yeah they offered great plans, and yeah they were David vs Goliath, but seriously the only time they move the needle in getting activations is when they offer their 50% off plans - and frankly, having a customer base with an ARPU of $12.50/month is NOT a way to build a strong, sustainable business.

It is a fine line to walk between making sure the consumer is happy with your pricing/product and making money, and Mobilicity went wayyy too far one way, and can't get themselves out of it. Cell towers and spectrum are not cheap. Neither is the OPEX of a cellular company with 200+ employees. Having the majority of your customer base paying the price of 2 starbucks coffees a month isn't going to pay the bills - especially when those customers can up and leave at any time they desire.

I will feel bad for the dealers who fronted money to open Mobilicity stores only to see them likely shut down once Telus buys Mobilicity.

[OldDutch]

So here is a question. If you could get a plan for $12.50/month why on earth would you pay $50-$80 month?

I think a combo:

1. 3 year contracts lock in consumers.
2. The AWS technology and home model these guys use.
3. No iPhone.

I'm pretty sure those were the downfalls. Mobilicity are large volume to make money models and that does not work when either you can't switch for their first 3 years of operation, and you can't get the most popular handset.

[MrMastodonFarm]

As of today you can get an iPhone compatible with AWS.

[CaramonLS]

Originally Posted by OldDutch

So here is a question. If you could get a plan for $12.50/month why on earth would you pay $50-$80 month?

I think a combo:

1. 3 year contracts lock in consumers.
2. The AWS technology and home model these guys use.
3. No iPhone.

I'm pretty sure those were the downfalls. Mobilicity are large volume to make money models and that does not work when either you can't switch for their first 3 years of operation, and you can't get the most popular handset.

I think it just boils down to one thing - quality of phone service. Lots of these guys just weren't reliable enough and didn't have coverage for the entire city.

I drive around a fair bit for work too - there is sometimes 1-2 hours where I am outside of their network, even though I don't leave the city limits. Kind of sad.

[I_H8_Crawford]

Originally Posted by OldDutch

So here is a question. If you could get a plan for $12.50/month why on earth would you pay $50-$80 month?

I think a combo:

1. 3 year contracts lock in consumers.
2. The AWS technology and home model these guys use.
3. No iPhone.

I'm pretty sure those were the downfalls. Mobilicity are large volume to make money models and that does not work when either you can't switch for their first 3 years of operation, and you can't get the most popular handset.

Yep, those were all major issues that plagued Mobilicity.

I would also add a:

4. No subsidies on handsets

Funny thing about Canadians is they bitch about the contracts, but the majority of the average consumers bitch even MORE about paying $500+ for a decent phone. Virgin Mobile realized this fact too a couple years into operations and launched their own post-paid service (before Bell bought out Branson's share).

Mobilicity really lost customers looking for a decent handset when they realized that instead of getting a "free" or "$150" superphone, they would have to shell out $500 or more.

This really limited Mobilicity to the low-income, low usage customers. Buy a cheap $50 phone, get the $12.50 plan and you're set - unfortunately for Mobilicity having say, 200,000 users with 70% of them paying $12.50 (numbers pulled out of my ass) you are not going to generate the income needed to increase your network coverage, which leads to the whole issue Caramon alludes to RE: poor coverage/service in and out of home zones.

Just a downward spiral for them.

[Igster]

Originally Posted by I_H8_Crawford

Funny thing about Canadians is they bitch about the contracts, but the majority of the average consumers bitch even MORE about paying $500+ for a decent phone.

Uh huh. While Americans pay even less for the same phone on not a 3 but 2 year contract. Maybe Canadians have the right to bitch while they are getting screwed?

[I_H8_Crawford]

Originally Posted by Igster

Uh huh. While Americans pay even less for the same phone on not a 3 but 2 year contract. Maybe Canadians have the right to bitch while they are getting screwed?

I would bet any amount of money that even if Canadians got the same pricing as Americans on 2 year contracts, they would still bitch.

Fact is the average consumer doesn't like being tied to a contract, but they hate paying full price for a phone even more.

Hell, the average consumer likely isn't even aware of the fact that Americans get the same pricing on a 2 year that we get on 3 years...

[Igster]

Well, the fact of the matter is, Canadians have longer contracts and end up paying more for their phones. Even those that don't really pay much attention to this stuff have commented to me and I've overheard conversations.

Just seems that Canadians get screwed left and right. More for phones, more for cable, more for satellite, meanwhile these corporations in Canada get richer and richer.

[TurnedTheCorner]

Not defending the entrenched telecom companies/providers by any means - but Canada's a vast country to do business in. Regardless of other systemic flaws that drive up prices and drive down value for consumers, I don't think there's any way around the geography of Canada making it an expensive place to run this kind of business in.

[CaramonLS]

Originally Posted by TurnedTheCorner

Not defending the entrenched telecom companies/providers by any means - but Canada's a vast country to do business in. Regardless of other systemic flaws that drive up prices and drive down value for consumers, I don't think there's any way around the geography of Canada making it an expensive place to run this kind of business in.

It's a nice excuse for the telcos, but try going 5 minutes off a major highway and you will quickly find yourself out of cell range.

Have you seen Roger's coverage map for Alberta? I doubt you're going to find a bigger lie on the internet.

[Aleks]

Originally Posted by I_H8_Crawford

I would bet any amount of money that even if Canadians got the same pricing as Americans on 2 year contracts, they would still bitch.

Fact is the average consumer doesn't like being tied to a contract, but they hate paying full price for a phone even more.

Hell, the average consumer likely isn't even aware of the fact that Americans get the same pricing on a 2 year that we get on 3 years...

No way. I'd probably go back to subsidized phones on 2 years

[SebC]

Originally Posted by TurnedTheCorner

Not defending the entrenched telecom companies/providers by any means - but Canada's a vast country to do business in. Regardless of other systemic flaws that drive up prices and drive down value for consumers, I don't think there's any way around the geography of Canada making it an expensive place to run this kind of business in.

I could see that being a lot more true if they're having urban customers subsidize rural ones, but then an urban-only network should be able to have success in a competitive market.

[Rathji]

I think you guys are seriously under estimating what American's pay for their phones/plans.

These are just some random examples:

Galaxy S3
Verizon:
$99 on a 2 year plan. No early upgrade.
Rogers:
$49 on a 3 year plan, with the ability to hardware upgrade after 30 months.

Note 2:
Verizon:
$299 on a 2 year plan. - No early Upgrade.
Rogers:
$149 on a 3 year plan. Early upgrade after 30 months.

IPhone 5 (16 GB)
$199, 2 year plan, no early upgrade.
$179, 3 year plan. Early upgrade after 30 months.

So realistically, you have 6 months of extra time with a phone, and are playing less across the board, from $20 with the iPhone 5 (Apple's fault though) to $150 less on a Note 2.

Sure, we might have it a little worse here since those extra 6months do have some value, which might be more than the difference in what you paid for the phone, but not enough to kick up a huge stink over.

On plans, I think we are much harder off. A basic $70 plan here is a $50 plan there, but I have no idea how hard it is to negotiate your plan down there. For example, my current plan would be about $80 on Verizon, and I pay $60 here.

[To Be Quite Honest]

WIND Mobile, Public Mobile and Mobilicity should just combine networks and client base and move redundant towers to make bigger networks.