Blogs & Comment

Competition in mobile phone market heating up

It takes guts to compete against the big three mobile phone servers in Canada: Rogers (which owns Canadian Business Online), Bell and Telus. Dave Dobbin, president and CEO of Mobilicity, a new carrier that launched on May 15 in Toronto, has plenty.
In what is sure to be Mobilicitys most popular plan, users can get unlimited Canadian and American long-distance calling at all times, unlimited global text and unlimited data usage for $65 per month, among other common add-ons like voicemail and caller ID.
Customers of the big three mobile phone carriers often get lured into buying discounted phones on the condition that they sign a lengthy contract. Mobilicity allows its customers to cancel anytime without charge.
Wind Mobile, another recent addition to the Canadian phone carrier market, doesnt lock users into contracts either.
Rogers, Bell and Telus do offer consumers the option of purchasing a phone without signing a contract, but the price is significantly higher than the price offered to consumers who sign contracts.
Lets use the new Blackberry Bold 9700 to compare prices.

Length of contract Bell Mobilicity Rogers Telus Wind
No contract $600 $500 $550 $500 $450
1 yr. $550 $500 $450
2 yrs. $450 $450 $400
3 yrs. $150 $150 $150

Mobilicitys phone selection consists of five different phones, none iPhones. One of the phones, the Sony Ericsson TM506, is available in three different colours.
The Canadian consumer has been trampled by the big guys for far too long, Dobbin says. No kidding.
Formerly known as Data & Audio-Visual Enterprises (DAVE) Wireless Inc., Dobbins company was founded in 2008 by business mogul John Bitove Jr.
Mobilicity is available only in the Greater Toronto Area, but Dobbin says the Vancouver, Edmonton, Calgary and Ottawa networks will have access later on this year. The networks are being built by Ericsson. Were the only new entrant that didnt miss their launch date, Dobbin says. Thats because they didnt set one. Well launch when were ready, Dobbin says. He refuses to give a specific date for when other cities will have access.
Because the company only has licenses for the most densely populated areas in Canada, Dobbin admits that Mobilicity is not a national carrier. If youre a businessman whos constantly traveling all over, making trips to Sault Ste. Marie then no, were not for you, he says. Were not trying to compete in that market.
Phones will work if youre outside of the GTA, but there will be roaming charges if youre in an area thats not covered by Mobilicity. Users will be charged 10 cents for text messages sent and received when roaming within Canada, for example. For every minute you spend talking on the phone while roaming within Canada, youll be charged 20 cents. The cost of data usage while roaming within Canada is five dollars per megabyte.
Whens the last time you left the GTA? Dobbin prods when I question him about roaming charges.
I feel like Im the defendant on an episode of Judge Judy.
Seriously, whens the last time? he repeats.
I have to think about it. Easter, I reply.
He keeps prodding.
Christmas, I think, I tell him.
It costs about $200 to cancel a contract from any of the big three, Dobbin tells me, when I say that changing plans is not an option for me. I have almost two years left on my current contract.
If your bill is $100 a month and you save $40 a month for 24 months, thats a savings of $960, he says, adding that even after paying the $200 cancellation fee, the long-term payoff is significant.
When figuring out whether switching carriers is right for you, consider that the more time you have left on your contract, the higher the cancellation fee is likely to be.
Also keep in mind that when you switch carriers, there is the startup cost of buying a phone that your new network supports.
Though Ive yet to find time to calculate whether switching plans is right for me, as a consumer, Im thrilled to see that the competition in this market is finally heating up. Let the games begin!