Canadian telecom and wireless companies declared their financials for the second quarter of 2013 with Telus and Bell reporting a significant increase in the number of subscribers. They also had a jump in average revenue per user (ARPU) but have complained about the impact US telecom company, Verizon, could have if it entered the Canadian market. It has been reported that the American wireless giant plans to acquire Wind Mobile which is a Canadian startup and use it to enter the Canadian market. Telus, Bell and other Canadian telecoms have felt threatened by this move.
In the current financial, Wind Mobile has shown considerable improvement from last year. TechVibes reported that, “Startup carrier Wind Mobile gained just under 19,000 subscribers, bringing its total customer base to 620,000—up 36% from the same quarter last year. The company’s average revenue per user rose 2% over last year to $27.90.” This is an excellent result for a newly started company, especially when it is in a market where giants like Bell and Telus pose fierce competition.
On the other hand, Canadian giant Bell has also shown significant improvements. “Bell lost more than 52,000 prepaid subscribers but gained nearly 97,000 postpaid subscribers, bringing its total wireless customer base to 7.7 million. Its blended ARPU rose almost 3% to $56.85—more than double that of Wind’s,” reported TechVibes.
Telus has also shown promise with a reported increase of 100,000 postpaid customers. So now it also has a wide customer base of 7.7 million just like Bell. However the ARPU for Telus is greater than both Wind Mobile and Telus at a high figure of $61.
However both Telus and Bell have started complaining about how their earnings could be affected by Verizon acquiring Wind Mobile and entering Canada. This would be extra competition for these companies. The telecos are lobbying against Verizon buying Wind Mobile and have even started a campaign to try to stop the government from giving Verizon permission to take this step.
Telus has given a number of arguments regarding why Verizon’s entry could be detrimental for Canadian wireless providers. This statement by Telus sums up what it has to say in this situation: “This entry could impact the competitive wireless landscape in Canada for the existing providers, impact the dynamics and cost of the spectrum auction and potentially impact future pricing and costs in the Canadian wireless industry,” writes Telus, warning investors that Verizon could bring real competition into Canada’s wireless oligarchy.”
Source: TechVibes
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