CANADA’S BIG THREE wireless carriers have been repeatedly quick to say that they expect a minimal impact on their businesses when wireless number portability takes effect on March 14th.
The Bell-to-Bell free calling deal announced last week by Bell Canada is meant to mitigate the negative effects, as are the myriad contracts that Telus, Rogers and Bell force customers to sign for terms of up to three years.
So while they are all expecting some increased churn, on the surface Canadian wireless executives seem pretty calm about the removal of the most significant barrier preventing customers from switching providers unless they wanted to change their phone number.
But grumbling’s afoot.
New research from Solutions Research Group suggests that close to two million Canadians, thanks to low satisfaction rates, will reconsider their wireless provider once WNP happens. According to the company’s "Fast Forward" independent syndicated research, only 36% of Canadians report they are "very satisfied" with their wireless company, as compared to 52% of American customers.
And with 41% of customers aware WNP is coming, young adults are out in front saying they plan to look at other providers. In fact, 13% of the 20-29 demo say they are very likely to consider a new wireless company and overall, 40% of Canadians say they are either somewhat or very likely to switch companies when WNP happens. The public piece of the report doesn’t say if it’s the rates that customers are unhappy with. (The research covered nationally representative samples of over 3,500 Canadians aged 12 and older by telephone (1,203) and online (2,302) with interviewing completed in early October 2006. The U.S. market data is drawn from SRG’s Digital Life America study of over 2,500 American consumers. The results cited in this release are accurate to plus or minus 2.1%, 19 times out of 20.)
The SRG research comes hot on the heels of a widely circulated report on the Canadian wireless industry earlier this week from the Seaboard Group saying Canadian wireless rates are too high, limiting penetration here. While that may or may not be a valid statement, the Seaboard report uses some peculiar comparisons to support its thesis that the upcoming spectrum auction should be tightly controlled by the feds so that additional players can be brought to the fore.
The Seaboard report bizarrely compares Canada’s wireless penetration rates to African nations Botswana and Gabon, saying those two countries’ wireless penetration rates are "nipping at Canada’s heels" while failing to mention that the two countries have less than 10% wireline phone penetration.
In Canada, just about every home at the end of every dusty dirt road has a phone line running to it and rates for that basic wireline phone are among the lowest in the world.
The report goes as far as to call Canadian wireless adoption "a national disgrace" which is a patently ridiculous charge – over-the-top hyperbole on the level of comparing the Canadian communications system to Africa’s.
The report also compares Canadian wireless penetration to that of Europe, where many countries are in the 90% range (some say they are over 100%). But the report fails to mention that Canadian wireline phone rates are very low compared to Europe (meaning many Canadians may be quite happy paying very little a month for their old phone), or that many Europeans have multiple SIM cards or multiple wireless subscriptions to try and get around expensive roaming charges.
As well, the Seaboard report insists: "The cost to use a wireless phone in Canada was significantly higher than in other parts of the world," but then it also shows that light cell users and prepaid users both pay more in the U.S.
While media reports this week of course concentrated on the absurd comparison of Gabon and Botswana to Canada, Seaboard did offer some food for thought for the carriers, such as introducing U.S.-style big bucket service plans, killing off long distance and heating up the competitive fire among the big three rather than the genteel "rational pricing" dogma espoused by each of Telus, Rogers and Bell.
So upheaval is on the horizon and maybe prices could be lower, but when the lead message is "Botswana is better" any helpful information is lost.
