The new wireless entrants have been battling it with the incumbents for over a couple years now. All of them came in swinging, promising no contracts and lower monthly bills (voice and data). WIND, Mobilicity and Public Mobile have all delivered on this, but have also changed their strategy by offering Tab pricing or discounted rates when you prepay several months upfront. On the flip side, to ensure their subscribers base continues to grow, carriers such as Rogers, Bell and TELUS have either reduced monthly plans or have offered up “unlimited” calling in some provinces. Carriers in Canada must prove their worth everyday to customers, competition is fierce and it’s only getting hotter with the upcoming 700Mhz wireless spectrum auction.
For the past number of quarters the carriers have all reported a decrease in voice and increase in data usage. This is mainly driven by the adoption of smartphones. A new report by the Convergence Consulting Group gives some year-end 2011 forecasts: ARPU (average revenue per user) to fall by 1.4%: Rogers reported that their Q2 2011 ARPU was $60.26, Bell Q2 2011 ARPU was $52.99, TELUS blended ARPU in Q2 2011 was $58.88 and WIND was $27.80. Mobilicity and Public are private companies and do not report their numbers.
The Canadian Wireless Telecommunications Association (CWTA) stated that there are over 24.5 million wireless, on target to hit over 32 million by the end of 2014. Convergence states that the data usage trend will continue. Smartphone penetration in Canada will represent 39% of the Canadian subscribers by the end of 2011, then surge to 64% year-end 2014.
The new entrants are mainly operating in Toronto, Calgary, Edmonton, Vancouver, Montreal and Ottawa. Back in April the Convergence group released a similar report that showed lots of promise for the new entrants. “We forecast New Entrants (cable & independent) will capture over 16% of the Canadian wireless market by YE2014 (5.4 million wireless subs), up from 2% at year-end 2010, and 6% at year-end 2011. Canada saw close to 2 million wireless additions in 2010”.
Now in this latest report titled “Canadian Wireless 2009-2014: Assessing the Impact of New Entrants”, dated September 2011, Convergence is lowering their expectations and stated that “Based on our detailed subscriber models, we forecast New Entrants’ will have 4 million or 12% of Canadian wireless subs by year-end 2014, up from 5% year-end 2011.”
1.4 million subscribers is a big change, we’re curious which of the carriers gobbled up all those subs.
Source: Convergence Group, Report (PDF)