Primus Canada primes for greater competition with WSPs on LD front

Competition in the Canadian wireless long distance (LD) services market is heating up as Primus Telecommunications Canada Inc. has unveiled a new offering that promises to provide business users savings of between 25% and 50% over their current wireless long distance (LD) charges. Introduced last week, the Wireless Access Service has already garnered significant attention from the company’s existing customer base, according to Joe Parent, Primus Canada’s VP commercial marketing. "We’ve had some very encouraging results in the last couple of weeks that we’ve been out … and we’re finding that anyone that does any kind of significant cell phone traffic is quite excited about this," he tells Report on Wireless. Toronto-based Primus Canada, the largest alternative provider of consumer LD services in Canada, plans to market the service to a wider business audience, not just its existing customer base. The service works by providing cell phone subscribers who register with Primus Canada with an access code for the region they live in. The user dials into the access switch that authenticates the user and offers a second dial tone. The cell phone subscriber is then free to dial the number, which is routed through the company’s landline network. The launch of the business-oriented service in Canada marks another phase in Primus Canada’s parent company’s strategy to secure a larger portion of the global wireless LD market. Last July, McLean, Virginia-based Primus Telecommunications Group Inc. introduced a similar service designed for the residential or consumer user. Primus Canada went live with its service last October. Parent, while not fully versed on the consumer side of the business, says interest has been surprising and uptake of the service has been considerable. At press time, Primus Canada hadn’t provided any figures reflecting the growth rates on the consumer side. Shake up in wireless LD market? Canadian competitive LD providers have been under enormous pressure to bolster their bottom lines as landline LD prices have plummeted to among the lowest in the world since the late 1990s. In the past, some providers have been victims of their own strategies by offering extremely low long distance rates in a move to gain subscribers. These strategies have only bled away potential LD revenue and increased the red ink on their balance sheets. But the introduction of this service could represent a new frontier and a new potentially lucrative revenue stream for competitive LD providers. The question remains, however, whether Primus Canada will be able attract enough users to make the service profitable. Parent says that Primus Canada can offer the service on a cost-effective basis. The costs involved in offering the service are minimal, he says, because the company can leverage its existing network of 67 gateway switches to provide the service. Billing isn’t a problem either as the long distance charges are applied to customers’ existing Primus Canada bill, he adds. Primus Canada developed its service pricing by comparing various LD pricing plans of different wireless operators both in North America and internationally, Parent notes. The 25% to 50% savings mentioned in the company’s news release announcing the service are conservative estimates and savings are likely to be much greater, he adds. "Our intention is to position this as a wireless long distance call is the same as a landline long distance call," Parent says. "We’re really not going out and promoting this head-to-head with the wireless companies. We’re not trying to take over the wireless market. It’s a different value proposition. "I’m certainly not going to be presumptuous and say that ‘we’re going to bring them down.’ I’d be quite happy and flattered if we could have that kind of impression. And quite frankly, it’s a great value that we can bring to the market, a great benefit we can bring to wireless users if we could introduce some benefits of competition in that space as well." The national wireless operators, with the exception of Microcell Telecommunications Inc., may be in a position of losing minutes of use on the long distance front. Bell Mobility, Telus Mobility and Rogers Wireless Inc. all offer packages aimed at providing savings on long distance calls, but their occasional user rates begin at approximately 30 cents per minute. Microcell, on the other hand, offers LD rates of 10 cents per minute.

Primus Canada primes for greater competition with WSPs on LD front

News | February 18, 2003

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