July 9, 2010

Chatr, new discount wireless aims to stifle competitors

TECHNOLOGY - Rogers Communications has launched a new discount wireless service called Chatr, offering unlimited calling and texting overseas for flat-fee plans ranging from $15 to $65 (almost identical to Mobilicity plans).

Rival Mobilicity is accusing Rogers of being a “$20-billion bully” aiming to destroy the competition and create a virtual monopoly. CEO John Bitove says his company is pursuing legal action under the Competition Act if Rogers launches Chatr.

“You look at the markets they’re targeting, they’re our markets. You look at the plans they’re offering to the consumer, they’re basically ripping off the plans that we’ve put in place,” says Bitove, noting that Rogers could have made discount plans years ago but only changed now when Mobilicity entered the market. “What they’re basically being is a $20-billion bully to try and destroy the competition as quickly as they can.”

If Chatr goes forward it will be in addition to Rogers Wireless and Fido, all of which are owned by Rogers Communications Inc. The new Chatr service won't even be profitable for Rogers and will have to be subsidized in an effort to kill the competition.

If Rogers goes forward with this plan it will be a clear violation of the “abuse of dominant position” section of the Competition Act which makes it illegal to use "fighting brands introduced selectively on a temporary basis to discipline or eliminate a competitor.”

Once Mobilicity is driven out of the market, Rogers will cease advertising Chatr and eventually drop the brand due to it unprofitability.

This is not the first time companies have introduced discount wireless brands... Telus has Kodoo and Bell Mobility has Solo, but they were launched years ago and were attempts to gain market share and not the result of new competition.

Start up companies Public Mobile, Wind and Mobilicity are threats to Rogers' majority of the market share. There's also Quebecor's Videotron and another discount wireless coming out in the coming year from Shaw Communications.

And last but not least, Google is hoping to release a SmartPhone carrier service sometime in the next 2 years... which could spell trouble for Rogers' stranglehold on the Canadian market.

It would make much more sense if Rogers simply offered more discount offers to existing customers so they can retain them. And boosting their customer service would be nice too. Rogers has a bad reputation for its computer-voice operators, long wait times, shoddy customer service, billing errors and huge phone bills when customers go roaming.

If they spent more time trying to make their customers happy and less time being pricks to both customers and the competition they wouldn't need to worry about the competition because customers value good service.

Give customers a break and treat them with respect and they're more likely to stick around.

1 comment:

  1. There are a total of 6 MOBILICITY stores that have been shut down during the past one week. I just saw another one in Brampton which is shutting down next week. If you don't believe me go and see it for yourself. The proof is in the pudding!

    The one on Queens and Brittania in Mississauga was the first to go.
    Wind may be, just may be, able to stand up to Chatr but Mobilicity is history! They will be better off suing Rogers and living off any money they get from them. Don't burn your money on these jokers!


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