A Rogers Communications store in OttawaCHRIS WATTIE
Last year on Sept. 17, a numbered company filed trademark applications for "Chatr Wireless" and "Chat Sans-Fil" at the Canadian Intellectual Property Office.
That same firm also went on to register several slogans - including "Unlimited wireless that works" and "Works without limits" - as well as an orange speech-bubble logo.
The address of this ambitious company, 2217851 Ontario Inc., is identical to a law firm that represents Rogers Communications Inc., Canada's largest cellphone provider, leading many to believe the giant has a new discount brand ready to roll out this summer against new wireless players such as Wind Mobile and Mobilicity.
Analysts said a new brand could "inject confusion" into a crowded market, leading average consumers away from the new entrants, especially since many don't know incumbents own multiple wireless service providers. At the same time, Rogers could lure new subscribers unwilling to pay for the more upscale Rogers Wireless or Fido, the company's existing brands.
On Monday, Scotia Capital Inc. telecom analyst Jeff Fan factored the proposed company into a research note as if it were a fait accompli, saying it was evidence of increasing competition for incumbents like Rogers, BCE Inc., and Telus Corp., and a symbol of risk for certain telecom stocks. However, others cautioned that, if true, it is likely a pro-active move and would be restricted to regions where Rogers competes with new entrants.
Mr. Fan said he expects Rogers to launch a discounted, no-contract unlimited talk-and-text offering under a separate brand, allowing Rogers to compete with aggressive new entrants on price while simultaneously ensuring the company doesn't devalue the vast subscriber bases of its other two brands.
"The objective is to try and ring fence it," he said. "It's not so much Rogers launching this brand, but what others do off the back of this. Do Bell and Telus match what Rogers does?"
Both companies already have discount brands like Fido: Bell has Virgin Mobile Canada and Solo Mobile, while Telus has Koodo Mobile. But these so-called flanker brands are not cheap enough to compete with aggressive new entrants. A new, cheaper wireless product on the incumbents' national, established networks, as the Chatr slogans suggest, could resonate with those unwilling to risk a youthful player.
In a statement, Rogers did not deny the new brand name. "We're always working to innovate and better serve Canadians but have nothing to announce at this time."
A rapid-fire response by competitors is not unlikely, either, since these companies often keep strategies at the ready. In the United States, Verizon Communications Inc. introduced a new unlimited offering on the morning of Jan. 15 and was matched by AT&T Inc. that afternoon.
Rogers, if it even owns the trademarks, may not follow through given they were registered at a time before the real fear of new competition gave way to the rather lukewarm impact it's having today, said analyst Greg MacDonald of National Bank Financial Inc.
"The wait-and-see approach is a smart one," said Mr. MacDonald, who thinks incumbents are now gauging how consumers react to the new entrants' unlimited offering. "In case that product really takes off, you want to have a product prepared to take advantage of it."