Thoughts (19)
February 10th, 2009 · by Heri · Mobile
Number of the day: 58 millions mobile phone subscribers now in France, with 1 million having 3G access. That’s a penetration rate of 91.3%, while Canada is at 51.3%62% (last stats from cwta.ca). So one could think:
- Canadians don’t know about mobile phones,
- OR they are “culturally” attached to landlines,
- Canadian mobile carriers don’t know how to market, sell or package phones,
- handsets manufacturers have all decided that the Canadian market isn’t worth it, so they aren’t releasing the hot phones here,
- there is no true free competition,
- the Canadian market is too small and/or too costly to maintain for mobile carriers
It sure isn’t a good sign for local mobile innovation.
I have owned a Blackberries and Palms, I now only use mobile for calls…no e-mail or data plans. Why? $200+ monthly bills simply isn’t practical. Even my simple calling plan costs $80/mth. When I lived in Boston ten years ago I used to pay $40/mth unlimited calls. Make sense?!
The fact that we pay one of the highest rate in the world for an obsolete and limited service as certainly nothing to do with it.
Just compare Canada’s price with the rest of the world, you’ll get your answer.
From my short years of covering Canadian telecom, I can say that #2 and #6 are the fundamental reasons and others stem from that.
Canada has historically had one of the most reliable landline systems in the world. In a cold and sparsely populated nation where people spend most of their time indoors, the landline was a necessity.
But Finland is kinda like that, and their mobile penetration exceeds 100%. Which brings us to #6. Being a large country, the capex to build a nationwide wireless network is huge. So the barrier to entry is massive, resulting in an oligopoly that doesn’t want to risk a price war. Ergo #5 and #4.
I’m very curious to see what will happen when Public Mobile, Videotron and Globalive launch their services.
I didn’t expect Roberto’s comment about the cold
interesting
but russia has 172 million mobile phones, which is a penetration rate of 121%.
that was in 2007, I’d guess it’s even higher today.
They also have a huge country, huge capex for carriers, and they didn’t have the Bell heritage.
I’ve also thought about the Bell and landline infrastructure, which might slow down mobile phone adoption. But the French also had the minitel, but they are now leading in broadband internet.
if there’s an explanation, I don’t really see it.
#5.
I’m pretty familiar with French and Canadian cultures (both Anglo and Francophone cultures).
1) I don’t think that’s an issue.
2) The French don’t spend as much time at home as do most Canadians (I wished I had the stats on numbers of hours vs minutes spent watching TV to reflect that).
Another is that home and office have two different phones. Keeping the two separate is very important in French culture so many people have two cell phones. The cost of landlines being roughly the same cost of cell phone line it’s easy to see why companies opt for cell phones.
3) I’m not sure it’s so much marketing devices that’s important as how much you make phones a useful tool in every day life. In France banks would leverage phones in every day life. I’d would get daily SMS messages sent to my phone to tell me my account balance, back in 2001. It was easy to send an SMS to pay for pizza or porn (who pays for porn… I don’t know) and seeing it appear on the phone bill.
If anything French carriers are good at marketing their services to other companies and that provides incentives to all phone users to get a cell phone.
4) We have some pretty good phones here. Even if we get them later than our southern cousin doesn’t matter imo.
5-6) No true competition is a factor. It’s much harder for a company to start on a pan-canadian level because infrastructure costs are huge compared to the return.
5.
6 is a joke. You don’t need to provide the same level of service at all geographical locations. Besides SMS fees should be paying for all of these.
I’m waiting for the day when mobile carriers will realize that they are nothing more than ISP’s
Right now, they are just like how AOL and CompuServe were a few (many) years ago (some sort of a fake overpriced Internet)
Mobile carriers only survive because they own big expensive towers. Their offering is pathetic if you really pay close attention.
I’m really sad that VOIP over WIFI hasn’t caught up yet. There are solutions but nothing really idiot-proof. Jajah might change this…
VOIP is where the competition will be. Not in the mobile carrier industry… at least not until they become ISP’s and see their user base melting because of VOIP.
There is NO real competition in Canada.
I agree with j2. 6) is a joke.
1) AUSTRALIA has the same population density as Canada and same type of demographics. Cost to deploy high quality networks are the same in Australia and Canada.
Australia used to have the same cell penetration as Canada, same infrastructure costs and same lame excuses from the carriers. However, after Australian gov forced the carriers to open the market, penetration of 100% was achieved in 2008.
http://www.itwire.com/content/view/1441/2/
2) We get the same treatment when it comes to internet bandwidth. Super inflated costs with third-world country services.
Korea for example is planning universal 1G bandwidth by 2012. http://snurl.com/bov2a
3) This situation is intolerable. When market penetration of mobile technologies increases, so does the PIB (or so say a couple of studies). We can assume it’s the same for bandwidth.
This situation is like a bad joke on us.
Just my 2 cents.
It comes down to cost.
Pay & Go here is not true pay and go. In Europe you can pay $30 for a pay and go credit that will last 6 months - here it’s $20 for a month, which is pretty much a subscription.
So the bottom of the market is not being served well.
There are areas too which have poor coverage so maybe people don’t bother - but most people in Canada do live in urban areas so have coverage.
A question to ask - do you know anyone who’s a profession who doesn’t have a cell phone? What’s the penetration rate for cell phones in Canada amongst this demographic.
Pretty high I would guess.
This is the demographic that contains entrepreneurs, programmers and people with the cash to buy cellphone programs or services.
I don’t think that the relatively low penetration here will effect mobile development too much..
There are a combination of factors here. First, cell phones are not useful enough to be truly required. For something that’s more restricted than a land line, you would expect a lower price. I always grind my teeth when I pay 50$ a month for a phone that does nothing more than my 40$ land line, and counts my minutes at that.
Second, while cells are certainly capable of being more than a mobile phone number, it’s ridiculously expensive. Data rates have historically been through the roof, and they’re still charging for text messages. That alone feels like highway robbery because text messages are so much more simplistic than the rich text communications we’re used to getting for free on the internet.
If the cell phone will ever become universally adopted here, it will be because it’s 20% less than a land line and gives you unlimited talk time and data. Anything less will never work.
Way too expensive, and the contract terms are designed to be unclear and add all kinds of unpredictable fees. Most packages are by the minute. Most overage fees are around 30c a minute. Incoming text messages are 15c a pop. Data plans are even more ridiculous….
A contract is needed to get a good price on a new phone. How many people have signed those 3 year contracts, expecting to pay $60 to $100 a month (still quite a few times more expensive than a landline or voip).. but then the bills ring in at $300-$900 and more… the price of a luxury car, or rent, or food for a month.. FOR A DAMN PHONE!
I’ve seen a pair of highschool kids get after-school jobs just so they can get enough pocket money to have a phone, obviously their (not exactly poor) parents were not inclined to pay for the service… then just after one month of usage the bill was higher than what they’d earn in the next few months. The poor kids had to cancel the contract and work all summer to pay off one month of usage and a huge cancellation penalty fee.
With different providers, no matter which package I would choose, the bills were always huge and unpredictable, and then there are extra fees to change to a different package, which ends up costing the same, or more, so then the contract has to be cancelled, but that costs a few hundred, if not thousand, dollars as well.
We’re basically getting royally screwed by 3 big companies that are running this business like the mob. The CEOs and major shareholders are putting millions into their pockets at the expense of every individual and business in the country.
And there is no CRTC or government intervention, of course not, they’re all chummy chummy with the big wigs of communication… better to keep the media mob bosses’ pockets full when you’re a politician…… f**king pigs.
So add an item to your list…
- Out of control profiteering, corruption, billion dollar business, corporate pigs…
Well I’m from Europe, Portugal to be precise, and when I arrived here I was astonished first by how expensive call were, and second by having to play income calls. This is insane, companies charge you twice and nobody seems to care. In Portugal I think it’s too crazy because people have some times 2 or 3 cell phones, carriers give them away for free so why not take it. We are such a small country and we have 3 major carriers, and 3 or 4 small carriers that use major carriers’ infrastructure.
I think the principal issues are the call’s price and how expensive phones can be.
We are far away from Europe when it comes to telecommunications, even Internet, it’s crazy, here we are still with our “7Mb” with BELL or “20MB” with VIDEOTRON but in Europe, 2 years ago they where operating with already 24Mb.
Helio, it’s the same in every European country. I lived in France a while ago, and my cell phone usage was maybe 10 times more (sms, minutes, etc) than currently, since noone has a cell phone here
Gary, I think you summed it up to 1.
Richard, there are many profesionnals who don’t have a cell phone. I know tech companies only provide a cell phone plan to their directors or executives. They don’t see the use for the other staff.
I think this all boils down to not enough competition, and the legacy carriers just hoarding cash from quebecers.
I just remember there are new operators like Virgin Mobile. This was supposed to shake the market in Canada, but they really can’t since they resell/repackage Bell’s services
The government needs to impose a VERY LOW fare for carrier interconnection and reselling, which is how France Telecom lost their monopoly status (or others in Europe) and got the market started
There’s no real competition in Canada, and consumers are locked into their existing carrier because they all use different technology.
Rogers made $639M in operating profit last quarter from their wireless business alone.
Population density is a bullshit argument. There is some truth in the argument that a smaller market size relative to the US means overhead is higher.
But in that case I’d like to see a Wireless Free Trade Agreement with the US, allowing carriers in each country to operate in the other.
I’m sure some of the US carriers started extending their coverage up north, it would give our these lazy-ass anti-consumer wireless companies a good kick in the butt.
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