Loading ...Bell the sleeping Giant!
Can Bell dominate the Cell phone market in Canada?
Currently Rogers dominates the wireless space largely due to a GSM/HSPA based technology advantage, one of the largest distribution networks along with an advertising power horse made available with their integration with cable and TV assets. Bell has consistently lagged Rogers and TELUS in industry net additions, in the last 9 quarters Bell came in third 8 times. Bell lags the industry in churn, ARPU and with a lower mix of postpaid net adds over the last 9 quarters.
| Net Adds | Q1/07 | Q2/07 | Q3/07 | Q4/07 | Q1/08 | Q2/08 | Q3/08 | Q4/08 | Q1/09 |
| Rogers | 86 | 138 | 243 | 183 | 68 | 100 | 239 | 199 | 72 |
| TELUS | 91 | 128 | 135 | 167 | 88 | 176 | 177 | 147 | 48 |
| Bell | 13 | 63 | 137 | 195 | 34 | 83 | 117 | 117 | 30 |
| Bell’s Rank | 3 | 3 | 3 | 1 | 3 | 3 | 3 | 3 | 3 |
While the situation looks grim for Bell I will argue that they have the largest upside and will make the greatest strides over the next few years and they are making all right moves. With a change in leadership, former TELUS mobility CEO George Cope at the helm, Bell has made a number of strategic moves which set them up for success in the future:
- Today’s announcement (May 7) of the full acquisition of Virgin Mobile Canada
- Announced a joint partnership with TELUS to build a next generation HSPA (GSM based) network that will level the playing field with Rogers
- Recent acquisition of the Source and full Bell products in their stores by Jan 2010
- Aggressive acquisition of top Smartphones, Palm announced in early May that the Palm Pre will be coming to Canada through Bell in the second half of 2009
- Ongoing cost cutting and efficiency moves
What these moves represent is a concentrated effort by Bell to close the gap with its Industry peers. Bell is closing the gap on Rogers superior distribution network with the Source acquisition (750+ stores) while removing tens of thousands of acquisition potential from Rogers and shifting them to Bell.
Its full acquisition of Virgin Mobile allows Bell to further expand its multibrand, multi-segment go to market strategy. Virgin Mobile is arguably the youngest, hippest brand in the market place. J.D. Power and Associates, November 2008 wireless survey listed Virgin Mobile number 1 for customer satisfaction in the prepaid market and number 2 behind Koodo Mobile in the postpaid segment. This acquisition also allows Bell to further capitalise on economies of scale/scope with its other brands in the market for devices and operations.
2010 will be an interesting year, with Bell and along with TELUS upgrading their networks to offer next generation GSM/HSPA devices and features, Rogers distinct advantage will dissipate and the playing field, to some extent will be levelled (though it will take a few years for Bell to full ramp up to a full GSM/HSPA lineup of phones).
With Bell becoming leaner and more stream lined with its cost cutting efforts, a new management team at the helm, increasing its distribution network, further enhancing its mult-brand strategy, and upgrading its network all in a relatively short time, look for this “sleeping giant” to once again become a dominant force in the Wireless game.
