Subject: [NEXTEL-1] Wireless Carrier Gets Aggressive In Telling Consumers To Drop Landlines

From: [email-masked]
Date: Wed, 08 Oct 2003 09:05:16 -0400

Wireless Carrier Gets Aggressive In Telling Consumers To Drop Landlines

Contributed by mmasnick on Tues, Oct 7 2003

There have been plenty of stories about people deciding to ditch their landlines
and go entirely with a mobile phone. However, this is one of the first cases I've
heard of a wireless carriers specifically advertising the idea that you should
drop your landline and go entirely mobile. Up in Canada, Microcell is
experimenting with just that advertising campaign, telling people they can switch
their phone numbers and go completely mobile with Microcell with a $40/month
unlimited calling plan. As the article points out, they may have an advantage in
doing so, since their larger competitors are all tied to landline phone companies,
where getting such a campaign approved is going to be difficult. Once number
portability is in place in the US, it will be interesting to see if the
independent wireless carriers adopt a similar advertising strategy.

=====================================================================================

Microcell aiming to get people to abandon fixed-line phones
By DAVE EBNER
TELECOM REPORTER
UPDATED AT 8:59 AM EDT
Tuesday, Oct. 7, 2003

TORONTO -- Mobile telephone company Microcell
Telecommunications Inc. launched a campaign in Vancouver
yesterday to encourage Canadians to dump their fixed-line phones
in favour of going solely wireless.

"It's a new breed of service," said André Tremblay, Microcell
president and chief executive officer. The Montreal-based
company, marketer of the Fido brand, said its new offering is "the
first true alternative to traditional phone service."

Beginning on Thursday in the Lower Mainland of British Columbia,
Microcell is going to offer customers unlimited talking time on a
mobile phone for $40 a month. Potential customers can shift their
fixed-line number to their mobile phones. Should the offer prove
successful, Microcell said it will expand it to other cities, although it
did not say when.

The trend to abandon a fixed connection for a mobile phone is in
nascent stages. Young professionals in large cities and students
thus far have been among the few segments of the population really
interested in the option.

Microcell, however, could have much to gain by selling the service, observers say.
Its larger competitors, Bell Mobility and Telus Mobility, are both owned by
telephone companies whose financial results rely on the large cash flows from
fixed-line connections. They are unlikely to match such an offer.

"It's quite aggressive," said Brian Sharwood of telecommunications consultancy
SeaBoard Group.
Mr. Sharwood said Microcell has to be careful to ensure it doesn't overload its
networks if the offering is too successful and call volume outweighs capacity.
This will be a factor to consider if the service is expanded to Toronto and
Montreal. "If it does really well, they could be in trouble," he said.

Johanne Lemay of consultancy Lemay-Yates Associates said the price of Microcell's
service is "attractive" and could draw new customers.

The company has struggled in the past several years. This spring, it completed a
major financial restructuring under court protection from creditors. It has far
less capital to spend than its much bigger competitors. In the first six months of
this year, it lost 68,088 customers, taking its total down 6 per cent to 1.1
million. It is the smallest of four national mobile phone companies, with about a
third or fewer customers than the others.

Telus Corp., the local telephone company in Vancouver and owner of Telus Mobility,
fired back at Microcell's incursion.
James Goliath, Telus vice-president of marketing and multimedia solutions, said
many customers will be hesitant to switch to Microcell because of fixed-line
connection's "ultrahigh reliability."

Microcell defended the quality of its network. "We're very comfortable with the
coverage," Mr. Tremblay said.
The Vancouver service has been planned for more than a year. The city was chosen
for several reasons, Microcell said, one being that its network there is strong.
The company has spent money to improve the network in Vancouver, although nothing
above its planned capital expenditures this year of about $80-million.

A Bell Canada spokesman said the Microcell announcement was "proof" there is
competition in the local telephone market. Bell controls almost 100 per cent of
the local residential market in its home region of Ontario and Quebec and has been
busy trying to change its image as a monopoly.

Bell is owned by BCE Inc., which also controls Bell Globemedia, owner of The Globe
and Mail and the CTV television network.

Bell said it has no plans as yet to respond to Microcell if the company moves its
new plan east.
"At this point, we're competitive, even with [Microcell's] offer," the spokesman
said.

Microcell's initiative is just one of a number of new pushes various players in
the mobile phone industry have made.
Rogers Wireless Communications Inc. of Toronto yesterday announced its
"Totalphone" offering. It combines attributes of what the industry calls
prepaid--no monthly bills--and post-paid--monthly bills. At a press conference,
Rogers Wireless chief marketing officer Rob Bruce called it "a major
breakthrough."

Bell Mobility recently introduced "all-in-one" rate plans. Rather than advertising
a $25 plan that also charges a $6.95 "system access fee," Bell has combined all
such charges. Microcell's Vancouver offering does the same.
Bell has also introduced bundles of services. Customers who also buy high-speed
Internet or satellite television and fixed-line long distance from Bell are
eligible for discounts on their mobile service.

Investors barely reacted yesterday. Class B shares of Microcell closed unchanged
at $17.45 on the Toronto Stock Exchange as only 1,100 shares traded. Telus stock
rose 4 cents to $24.40. BCE stock fell 19 cents to $28.85.
One technical aspect underpinning Microcell's offer is the ability to take a
person's current fixed-line number and make it their mobile number

http://www.theglobeandmail.com/servlet/ArticleNews/TPPrint/LAC/20031007/RFIDO07/TPTechnology/?mainhub=GT

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