This article discusses the risk that small cell-phone service providers are facing in the competitive Canadian market. I remember just a few years ago when a few small cell-phone companies emerged in the market offering substantially lower prices then the market leaders. After several years of existance, some of the reaons why they were able to offer lower prices are beginning to surface.
One person who was interviewed in the article shows his disappointment with the service reception, as well as the customer service he has been provided with by the new carrier, Mobility. Although Mobilicity offers low prices and no fixed-term contracts, they are able to still make a profit becuase they don't have nearly the amount of cell phone towers to pay for as industry leaders such as Rogers. This is one of the reasons why these companies have a sort of economies of scale advantage over the smaller companies.
This makes complete sense, though, as a huge company such as Rogers has lower fixed-costs when averaged out against the amount of customers they provide services to. The Article also indicates that the govenrment has tried to create less market restrictons for small companies such as Mobilicity to enter into the cell-phone market, but this has shown little success as well.
Worth a read, especially if your considering a change of service providers.
Link to Full Article:
http://www.theglobeandmail.com/news/technology/tech-news/canadas-newly-competitive-cellphone-market-at-risk/article2334878/
No comments:
Post a Comment