TbayTel to face tough competition from Bell in Thunder Bay, analyst says

TBayTel will face “serious” competition from BCE Inc. as the competing telco offers third- and fourth-generation mobile broadband services in Thunder Bay, Ont. for the first time, said analyst Roberta Fox, chair and chief innovation officer at consulting firm Fox Group. Bell launched its 4G LTE and HSPA+ network services in Thunder Bay on Oct. 3, 2012, and opened a Bell store and a kiosk under its Virgin Mobile brand in the city’s Intercity Mall. Claire Gillies, vice-president of marketing at Bell Mobility, said in an interview that the wireless broadband service will operate on 1900 MHz spectrum and will power mobile devices and smartphones as well as Internet hubs and sticks. “It increases the amount of competitiveness and it offers folks who live in Thunder Bay more choice for their Internet and their wireless options,” Gillies said. She said voice plans are available at the promotional price of $30 per month while voice and data plans are available for $50 per month. Pricing for Bell’s Internet hubs and sticks start at $22 per month, she said. Fox said TBayTel offers wireline and voice over IP services and that its main competition now will be on the wireless side of the market. “They’re now going to have serious competitors,” she said. TBayTel announced in June that it increased its HSPA+ network investment to $9.2 million from $5.8 million. In a release dated June 28, TBayTel said it constructed additional cell sites, made updates to hardware and software, and modified its antenna site structures. The additional capital expenditures rose TBayTel’s total, two-year network investment to more than $35 million, the company said. “These changes have established an improved baseline for future changes that are required to continue to improve call completion rates, data speeds and coverage,” the company said in the release. Gillies said Bell's new mobile broadband service offers average speeds of 12 Mbps to 25 Mbps and that LTE device owners can access Bell’s mobile TV service. “We’ve seen a great demand in the first week and a half of our launch,” Gillies said. “We’re excited to be in the market and we’re seeing a great response and interest from the consumers.” Gillies said the launch is Bell and Virgin’s foray into the Thunder Bay market and that Bell is offering its services to retail customers as well as small and medium-sized businesses. When asked about whether the company aims to take subscribers from regional incumbent TBayTel, Gillies said she couldn't comment. She later added that Bell is dedicated to delivering quality wireless service. “We always aim to do that in whatever community we launch in ... Thunder Bay would be no different.” In an emailed statement to The Wire Report, Iain Grant, managing director of the Seaboard Group, said TBayTel is now a partner of Rogers Communications Inc., which caused Bell to become “more active” in the market. “TBayTel may appear as a smaller company when viewed from Ottawa, but when viewed from Port Arthur and Fort William, it is the incumbent and has the largest market share and best coverage,” Grant said. According to 2011 census data, Thunder Bay has a population of 108,359. Fox said Bell’s push into the northern Ontario market could be motivated by the area’s growing mining industry. She said a valuable mineral deposit area known as the Ring of Fire is drawing mining companies. According to the Ontario Nature website, the Ring of Fire is a crescent-shaped chromite deposit about 240 km west of James Bay, Ont. Chromite is a metal used in the production of chromium, which is used to make heating units, ovens and other appliances, as well as coatings for auto parts. “The Ring of Fire is driving all kinds of investment and growth, and that particular segment of natural resources is very much driven by massive files,” Fox said. She said mining companies need data services to send topographical maps and surveys to one another, and that the companies use terabytes of data on a regular basis. “They are big data users, which means they need lots of bandwidth,” she said, adding that this is another reason why Bell is paying attention to the Thunder Bay market. Gillies said Bell’s new service is limited to Thunder Bay and a few surrounding rural areas. Bell will continue to expand its coverage and offer improved service during the 2013 fiscal year, she said. William Gasteiger, president of Vianet Internet Solutions, an independent Internet service provider operating in Northern Ontario, said in an emailed statement that TBayTel created a “monopoly” on cellular services from the north of Sault Ste. Marie, Ont., to the Manitoba border. Gasteiger said TBayTel provides roaming services to Bell and Telus Corp. using CDMA network technology and to Rogers using GSM technology. “It appears that Bell/Telus have not reached any agreement with Thunder Bay Tel to upgrade their Bell services to GSM, which has made that part of Ontario a black hole for most Bell/Telus users,” he said in the email. Gasteiger said it “makes sense” for Bell to fill the gap in its network as Thunder Bay is the largest community between Sault Ste Marie and Manitoba. TBayTel did not respond to requests for comment by deadline. Barry Streib, director of corporate relations at TBayTel, told northwestern Ontario newspaper The Chronicle Journal on Oct. 4 that he would not comment on the company’s business or marketing and sales strategies. “Our commitment is to ensure our customers have the best products and services,” he said. dgrenier@thewirereport.ca

TbayTel to face tough competition from Bell in Thunder Bay, analyst says

News | October 22, 2012

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TbayTel to face tough competition from Bell in Thunder Bay, analyst says

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