DARRYL DYCK/The Canadian Press
Rogers appears to have a third "flanker" brand up its sleeve to deal with the surge of new wireless players in the Canadian market.
A flanker brand, for those who may not know, is a budget alternative owned and operated by a large incumbent, such as Fido (Rogers), Solo (Bell) and Koodo (Telus).
Now, let's be clear. This, we know: Rumours, circumstantial evidence and common sense indicate that Rogers will be coming out with a new, deeply discounted wireless brand to complement its Rogers Wireless and Fido brands, and that this will likely be called "chat.r." This would likely be a pre-paid service with unlimited talk and text, though not unlimited data - which would not make sense given Rogers executives' public statements on the we-won't-do-unlimited-data front and the necessity of maintaining market share against the discounting new entrants, Wind Mobile, Mobilicity and Public Mobile.
However, this, we don't know: Whether these rumours are definitively true. I've put a request in for comment from Rogers, but have yet to hear anything. It's doubtful that they would confirm something like this before an official launch, anyway, but I'm trying.
Blog posts here and here provide nice summaries of the rumours, with screen grabs. I'm not pretending, at all, to be the first with this.
But a note from Scotia Capital telecom analyst Jeff Fan on Monday morning sort of cemented the rumour for the Bay Street set and those of us who have been on vacation (in gorgeous Newfoundland, if you're wondering), rather than those who frequent Canadian blogs about wireless technology.
"We believe at least one of the wireless incumbents, beginning with Rogers, will be launching a new prepaid unlimited talk and text service in the summer," Mr. Fan wrote in a note. "For Rogers, we expect it will be launched under a new brand called chat.r."
In the note, "Getting more cautious on wireless," Mr. Fan warned investors of the potential dangers of increased competition (price wars are great for consumers, not so great for people who hold stock, given price cuts can erode revenue and profits). Other analysts have recommended staying away from Bell Canada and Vidéotron parent company Quebecor's stock, given the potential volatility and discounting that will go on as the two duke it out for supremacy of la belle province. In his own note, Mr. Fan is becoming less enamoured of Rogers.
This is an industry-changing move, marking one more step down the ladder for the incumbents in terms of picking up subscribers who are less willing to pay for wireless services. But given the massive heft of the national Rogers network and the even more massive heft of Bell's and Telus's combined national network, a new discount flanker brand(s) with better coverage than the new entrants could be earth-shaking. Why move over if these new players aren't the cheapest around? That question prompts this one: How will companies like Public Mobile or Mobilicity react to a new discount brand from the incumbents? Even more aggressive offerings?
It's unlikely many in the industry will be surprised. Rogers doesn't want to pollute its Fido and Rogers Wireless brands with hugely discounted plans. And Dave Dobbin, who heads Mobilicity, said at the Telecom Summit (at a panel I was moderating) that he thinks it likely an incumbent will come out with a new "flanker" brand to compete with wireless providers like his.
What will be interesting is how Bell and Telus react to whatever Rogers is cooking up. In the past, wireless providers have proven extremely agile as they wait to see what their competitors are doing. A great example is what happened with long-distance pricing among the new entrants. Mobilicity came out with unlimited long distance at launch and pretty soon afterward Wind and Public Mobile had offerings to match.
Did they say, "Oh my goodness, unlimited long-distance? Quick! To the planning and marketing ramparts!" No. They had plans up their sleeves, arranged in advance.
Which sounds a lot like what Rogers appears to be up to now. The only thing missing here are the official confirmations and the details. Or denials, of course. But here at the GlobeTech HQ, we're betting on the former rather than the latter.