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Winnipeg Free Press - PRINT EDITION

Canadians ready to ring up relief

Wireless rates to fall like long distance did

By: Murray McNeill

15/12/2009 1:00 AM | Comments: 0

WINNIPEG FREE PRESS PHOTO ILLUSTRATION (CP)

Increasing competition will drive down cellphone rates by more than 30 per cent in Canada over the next three to five years -- and consumers shouldn't lock into any new service contracts in the meantime, an industry analyst said Monday.

"The fact of the matter is that competition drives innovation and drives prices down and drives service up," Toronto-based independent analyst Eamon Hoey said in an interview.

"If you want to look at the future of cell, just look at what happened with long distance," he said, noting long-distance telephone rates in Canada went from about 85 cents a minute in the early 1990s to as little as three to five cents a minute today because of increased competition.

"I think you're going to see the same thing in this (the cellular) market. I think you're going to be seeing some very vigorous plans coming out in the next year and a half and beyond. So don't sign contracts. Just stay loose... and you'll be able to march from one (cellphone service provider) to the other."

Hoey said Canadians generally pay 30 per cent more for wireless than Americans, but that once the price-cutting is done, our plans will be cheaper.

The Canadian government gave Toronto-based Globalive Wireless Management Corp., the go-ahead on Friday to launch its new Wind Mobile wireless service in Canada.

On Monday, Globalive announced it has partnered with Blockbuster Canada and will use the retail chain's stores to sell services. It will start by introducing the service in Calgary and Toronto as early as today, but the plan is to use Blockbuster's national retail network to expand the service to every province except Quebec.

A Wind spokesman refused to comment on when the company is likely to enter the Manitoba market, saying a news conference will be held Wednesday in Toronto to outline the company's plans.

Hoey said he has no doubt Wind will be coming to Manitoba because it's already acquired the necessary licences. But Manitobans won't have to wait for it to arrive to see rates fall, he said.

"I think just the threat of entering into the Winnipeg and Brandon markets will put downward pressure on pricing."

It's also going to force the three big cellphone service providers in Manitoba -- MTS Allstream, Telus and Rogers -- to become more aggressive in introducing new products and services, he said.

MTS Allstream spokesman Greg Burch refused to speculate Monday on what Wind might be doing, nor would he comment on Hoey's prediction of a 30 per cent drop in phone rates.

"All I can say is competition is not new to us... and we'll be proceeding with our plans to unveil our new (high-speed wireless packet access) network in 2010."

Wind CEO Ken Campbell was tight-lipped Monday on what consumers should expect for pricing and products. Wind will have HTC, Samsung and BlackBerry handsets to start, he said. It will also sell broadband-only sticks that plug into laptop computers and allow wireless customers to access the Internet.

The CEO said more handsets were coming, while the company is testing its network in Vancouver, Edmonton and Ottawa, the three cities Wind hopes to have services in next. Outside the startup's coverage area, it holds a national roaming agreement with Rogers.

Dvai Ghose, analyst at Genuity Capital Markets, says he expects Wind to undercut the incumbents' main brands. He said Wind could offer a $40 flat rate for unlimited voice services, and an additional $20 for unlimited mobile web for smartphone users.

murray.mcneill@freepress.mb.ca

-- With files from Canwest News Service

Cellular seer

TELECOMMUNICATIONS industry analyst Eamon Hoey predicts increased competition from new cellular telephone service providers like Wind Mobile will lead to substantial rate cuts and new services over the next few years. Here are some of his predictions:

ON RATES -- Reductions of more than 30 per cent over the next three to five years as average cellphone rates in Canada become even cheaper than in the United States, where they're about 30 per cent lower than here.

ON SERVICES -- Some of the new cellphone services that could be available in Canada in the future are being able to use your cellphone and global positioning system technology to track the whereabouts of your pets on your property or to see if there are any bears in the area where your family plans to have a picnic; or using it to check up on your property while you're away by downloading images from your home's security cameras.

Republished from the Winnipeg Free Press print edition December 15, 2009 B6

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