National Post (National Edition)
IT’S ALL ABOUT DATA. THAT’S WHAT USERS WANT.
a phone drops to $0 — both the best-in-class Samsung Galaxy S8 and iPhone 7 have dropped to this level — Gillies said the market shifts into data promotions, which become part of the ongoing price.
“It’s all about data. That’s what users want,” she said.
Indeed, data was at the centre of the most attentiongrabbing deal in this period thus far — Freedom’s one-day offer of 10 gigabytes of data for $40 per month to customers switching from Telus or its flanker brands. It typically offers 4 GB of data for that noting to clients it is a typical strategy for providers with small customer bases. Freedom has about 1 million customers in a market with more than 30 million subscriptions.
“This aggressive behaviour is not surprising since Freedom’s wireless offering is not yet at the level of the incumbents’, and the company must therefore make itself attractive to customers by competing on price,” Yaghi wrote.
He believes Freedom will continue to offer low prices until it significantly increases its market share.
“In the overall market, we do not expect monthly wireless prices to decrease, but data allowances are likely to grow, in our view, due to the decreasing cost of delivering data wirelessly.”
RBC Capital Markets analyst Drew McReynolds also noted that promotional intensity “remains constructive” even as it picks up for both main and flanker brands. While Freedom is jostling with flanker brands, he views it as balancing subscriber growth and revenue.
For consumers, it can feel impossible to sift through the thousands of wireless options available when considering different devices, subsidy tiers, shared plans, data buckets and other extras — especially when prices tend to move in step between carriers. (For instance, Bell was selling the iPhone 7 Plus for $100 less on Thursday than it was on Wednesday. Its price point now matches its rivals.)
Bell’s Gillies said daily price adjustments at this time of year reflect the level of competition in the industry, which has faced criticism from consumer groups and the Competition Bureau over higher prices in provinces without a regional competitor.
“The promotional intensity, the pricing intensity and the competitiveness of this industry never surprises me,” she said. “It continues to be very, very vibrant.”