Rogers’ flinch potential source of the $60/10 GB plan standoff: analyst

Rogers Communications Inc. appears to have blinked — which caused a cascade of $60 for 10 GB bring-your-own-device wireless plans — in its ongoing battle for Toronto-based wireless subscribers, according to Canaccord Genuity analyst Aravinda Galappatthige. While the new plans from Shaw Communications Inc.’s Freedom Mobile were attractive for subscribers, overall subscription numbers were still low and “nonthreatening,” so “a reaction of this magnitude (albeit limited in terms of duration) from the incumbents was a surprise to us,” said Galappatthige in an analyst note. In his note, Galappatthige explained how he thinks Rogers, feeling the heat from increased competition for the highly-valued Toronto area, introduced the reduced rate plans in Alberta and British Columbia, regions where Freedom has a weaker presence and is more vulnerable to disruption. Since that’s Telus Corp.’s home turf, the west coast service provider quickly matched the offer on its Koodo flanker brand and also launched it in Ontario. Rogers, through flanker brand Fido, followed suit in Ontario and with each side of the country in play, BCE Inc. had to respond, Galappatthige theorized. It began offering the same rate through its Bell Mobility brand as well as its flanker, Virgin Mobile, in B.C., Alberta and Ontario. To support this, Galappatthige did have some historical basis to his speculation, noting the incumbents don’t wait too long to respond to legitimate market threats from Freedom. “We saw a little bit of this in late 2016 when Fido and Public Mobile temporarily matched Freedom with $40/4 Gb offerings, resulting in a poor net adds quarter for Freedom in its FQ1/17,” he said. According to reports from social media, the plans have been immensely popular and have attracted much attention, causing customer support line wait times (and even busy signals) as people are trying to change their plans. At the end of the day and flurry of competitive activity, Galappatthige still expects the country’s incumbent carriers will come out on top due to strong subscriber number trends and increasing average revenue per user (ARPU). “We are currently looking for 2.7% ARPU growth in Q4/17 from the incumbents, in line with the 2.8% in Q3/17,” said Galappatthige.

Rogers’ flinch potential source of the $60/10 GB plan standoff: analyst

Brief | December 18, 2017

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Rogers’ flinch potential source of the $60/10 GB plan standoff: analyst

Brief | December 18, 2017

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