MobileBlog

News and views on the Canadian telecom industry, and tips and tricks for saving on your cell phone bill.

Thursday, November 4, 2010

Power to the People

The winds of change are sweeping through the Canadian Telecom industry, and its monolithic incumbents are starting to feel the chill. We at MobileVantage have been following this story for awhile now, so it came as no surprise when I saw it prominently featured upon opening the Globe and Mail app on my Blackberry. Under the "Popular" section of said app was an article by their "Telecom Reporter" Iain Marlow:
http://www.theglobeandmail.com/globe-investor/rogers-takes-hit-as-phone-wars-heat-up/article1772824/

Anyone see it?

Titled "Rogers takes hit as phone wars heat up", it delves into the oft-discussed issue of how the entrance of new providers like Wind, Mobilicity, and Public Mobile are changing the competitive scope of Canadian telecom. Specifically, it focuses on how Rogers has failed to adequately respond to this "new competitive reality". Here are some key figures for you to think about:

-In the third quarter, Rogers saw a 24% drop in profit. 24%!!! That's quite a precipitous decline, representing $115 million Canadian (the drop was from $485 to $370 million).

-In this quarter, Rogers added 529,000 smartphone users.

-The Rogers stock has dropped 7.7%...Ouch. While not a crippling hit by any means, it's a rather ominous and worrying statistic, considering Rogers' position as the current Canadian telecom heavyweight champ.

Sure, as the strongest performer in the industry Rogers does have "the furthest to fall", but we can all be certain that Telus and Bell will follow suit. And given Bell's absolutely horrendous customer service and eyebrow-raisingly deceptive conduct, I predict that Bell will fall even further in the future than Rogers. We all have our telecom provider horror stories, and at MobileVantage we hear our fair share of them. And I can tell you with all honesty that the stories coming from Bell customers are far more cringe-inducing. But I digress. After reading the article all I could really think about was how MobileVantage fits into the whole picture. Firstly, through negotiations on our clients' behalf we can often help them receive upgrades that they might not necessarily be eligible for yet on paper. These upgrades usually consist of brand-new smartphones, which certainly contributes to that rather large "new smartphone user" number above. However, while the article states that these upgrades are used to get customers to "choos(e) a wireless phone that comes with higher monthly bills", we haven't found this to be the case. In every single smartphone upgrade we've negotiated, our clients' monthly bills have actually gone down! I don't mean to call erroneous on Marlow's claims. I'm simply stating that MobileVantage can help you become the exception to the rule by getting a new smartphone AND reducing your bill.

Another aspect of Rogers' performance that MobileVantage touches upon is the declining average revenue per user (i.e. the monthly bill). Since we have helped hundreds of users lower their monthly phone bills, I'd like to think that MobileVantage has had a part to play (albeit a small one) in this revenue per user change. The plans we negotiate for our customers are on average 45% less than their previous plans (without affecting usage!), which undoubtedly has an effect. Moreover, this number is made all the more significant when you consider that we specialize in renegotiating plans for our clients when they are IN CONTRACT. All of a sudden those aforementioned troublesome performance measures are starting to make a bit more sense...

However, one figure we can't take ANY responsibility for is the "churn rate". The number of customers leaving Rogers is a factor of their displeasure with the provider, and their desire for less expensive plans with carriers like Wind or Mobilicity. This gives us a lot more bargaining clout with providers, as "switching to Wind" is now a viable threat that can be played in trying to negotiate less expensive plans for our clients. That being said, we wouldn't actually suggest a client switches to Wind, in large part because of the cancellation fee and network quality hit they would incur. I personally have a Blackberry 9700 with Rogers, and I'm damn happy with it. I get great reception and network coverage, have a dirt-cheap plan that includes data, and love the new Blackberry that I negotiated with Rogers for. But I realize that I am perhaps an anomaly, as there are a lot of people out there who aren't happy with Rogers, and thus contribute to Rogers' "churn rate" and relatively poor performance. Furthermore, I can say with confidence that there are a lot of people unhappy with Rogers, Telus, Fido, and so on too. Well to those people who are unhappy with their cellphone plan and hardware, I encourage you to give MobileVantage a shout. Or at the very least, check out the website to learn a bit more about how we can save you money and leave you feeling better about that phone in your pocket. The telecom industry is changing, and most of Canadians (save for those who work for or invest in Rogers) say it's for the better. Isn't it about time your cell bill changed for the better too?

-Bye for now, and happy saving MobileVantagers!

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