Que­becor test­ing low-cost mo­bile brand

The Daily Press (Timmins) - - BUSINESS - Emily Jack­son Fi­nan­cial post

Que­becor Inc. is get­ting into the low-cost wire­less game with a new mo­bile brand, Fizz.

The Mon­treal-based com­mu­ni­ca­tions com­pany is beta test­ing the cheaper brand across its LTE net­work in Que­bec and the Ot­tawa area, where it cur­rently of­fers wire­less ser­vice un­der the brand Videotron.

A Videotron spokes­woman said Fizz will be an “en­tirely dif­fer­ent” mo­bile player, al­though she would not con­firm a launch date and de­clined an in­ter­view un­til then. Mean­time, Fizz is look­ing for cus­tomers will­ing to test the ser­vice.

Fizz’s beta pe­riod will last three months, ac­cord­ing to its web­site, which de­scribes the ser­vice as “light­ning-quick … with­out the frills, fees and ex­tras.”

Que­becor’s foray into lower cost plans comes as the Cana­dian Ra­dio-tele­vi­sion and Telecom­mu­ni­ca­tions Com­mis­sion, at the fed­eral govern­ment’s in­sis­tence, pushes for more af­ford­able ser­vice.

This spring, the CRTC asked the Big Three wire­less play­ers — BCE Inc., Rogers Com­mu­ni­ca­tions Inc. and Telus Corp. — to pro­pose low­cost data-only plans to ad­dress a gap in the mar­ket.

The largest play­ers in­sist there’s al­ready am­ple com­pe­ti­tion across price points through their mi­dand low-tier brands Vir­gin Mo­bile and Lucky Mo­bile (Bell), Fido and Chatr (Rogers), and Koodo and Pub­lic Mo­bile (Telus). Still, they pro­posed new plans with 1 gi­ga­byte of data at a dras­ti­cally re­duced rate of around $30.

The reg­u­la­tor also pon­dered whether there’s a need for price ceil­ings or data ca­pac­ity floors in the wire­less mar­ket, sim­i­lar to the so-called skinny TV pack­ages where it man­dated ba­sic ac­cess for $25 per month or less.

Que­becor and Shaw Com­mu­ni­ca­tions Inc. ar­gued such in­ter­ven­tions aren’t nec­es­sary, ask­ing in­stead for a hand­soff ap­proach in sub­mis­sions to the CRTC.

In July, Shaw launched its own low-cost data-only plans through its brand Free­dom Mo­bile. In Au­gust, Que­becor con­firmed a lower-cost ser­vice was com­ing soon on a con­fer­ence call with an­a­lysts.

Fizz launched this week on Face­book. It’s not yet clear what the pric­ing will be, but the web­site stated that users will only pay for what they need. To fur­ther cut costs, Fizz will be com­pletely dig­i­tal with­out any stores.

Des­jardins an­a­lyst Ma­her Yaghi noted that Fizz’s launch comes amidst a re­newed fo­cus on low­er­value cus­tomers with pre­paid ac­counts, a seg­ment that ac­counts for about 15 per cent of the to­tal wire­less mar­ket in Canada.

“The trend among in­cum­bents has been to fo­cus on gain­ing share in pre­paid so that they can con­vert a por­tion to post­paid over time,” Yaghi said in a re­search note Thurs­day.

Post­paid cus­tomers are on con­tract and typ­i­cally have more ex­pen­sive de­vices, larger data al­lot­ments and much higher monthly bills.

“Fizz opens the door for Videotron to be able to grab share in this busi­ness and in due time ben­e­fit by tak­ing those subs and up­selling them into the post­paid mar­ket,” he said.

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