BMI View: The regulator has blocked attempts by Rogers, Bell Wireless and Telus to acquire the smallerplayers in the market, such as WIND and Mobilicity, resulting in the new entrants struggling to remainafloat and offer challenge to three established operators. It is unclear what strategy the owners of WINDtake but it could become a market consolidator and a tie up with Videotron would be mutually beneficialand create a strong fourth player. In the frequency auction in March 2015, WIND, Eastlink and Videotronall managed to boost their spectrum holdings significantly, but BMI is still sceptical of the emergence of astrong fourth market player. With some of the highest ARPUs in the world, a low-cost strategy would havesome success in attracting subscribers. However, the Canadian market is predominantly postpaid and 3G/4G focused, with customers willing to pay higher rates for better quality, speed and coverage.
The first half of 2014 saw highly variable subscriber growth among the leading mobile operators, withnet losses being recorded by several players. WIND Mobile was the outperformer, although itsachievements remained modest and it remained only a minor player on the market after five years.
That said, considerable progress was made in migrating customers to higher value plans, which hasresulted in a modest uptick in average revenues per user (ARPUs), as well as sales of smartphones. AsRogers, Bell, Telus, MTS and SaskTel have fixed infrastructure they can leverage to upsell additional orconverged services, they are in a largely unassailable position and can therefore justify the considerableexpense in building out their 4G LTE networks.