TORONTO – When Rogers Communications comes to market with its new low-cost brand Chatr (which it says it will, soon), it can expect some legal haranguing from one of its wireless competitors.
Mobilicity chairman John Bitove told Cartt.ca on Friday that since the new brand from the big red machine is aimed solely at killing new competitors like his, he will file a complaint with the Competition Bureau when Chatr launches.
“If they were building a whole new company, a whole new network on their own, that’s one thing, but they’re obviously going to use all the leverage they can and subsidize it from the mother ship to try and hurt the competition in targeted areas – and those areas, coincidentally, are the five cities that we’re either launched or going to be launching in.”
After word leaked out on the web about the new brand’s existence, Rogers confirmed its launch was coming – and there have since been other details posted on the web, too.
We’ve mused here about Chatr (aimed at the “unlimited talk and text” crowd) being what’s known as sort of a “loss leader” strategy for Rogers (kind of like how big retailers sell motor oil for a dollar in order to bring you into the store and keep you loyal), but Rogers doesn’t usually create products that lose money – and the pricing details leaked so far appear to be in line with the newcomers, not undercutting them.
“The Competition Act clearly says you can’t create flanker brands to eliminate competition and that’s all this is,” added Bitove.
“It’s unfair competition… There’s no way to make the numbers work unless it’s, as you said, a loss-leader strategy that’s subsidized from the mother ship to try and eliminate the competition.”
According to some, it may be difficult for Bitove and Mobilicity to prove its claims since the wireless market is already competitive, featuring small players and three large ones. If Rogers were the only large player and had enough heft to set all market prices, Mobilicity would have a stronger case, said two lawyers with which we consulted.
But with Bell and Telus in the market, it will be difficult to prove that a new brand and pricing strategy is anti-competitive, they said. Plus, the federal government has signalled repeatedly it wants more competition in the market and Chatr will deliver more of that.
Nevertheless, Bitove is undaunted: “We’ll wait and see if they launch the business and if they do, the lawyers are working away getting ready to file what they have to file,” he said.
– Greg O’Brien
