There has been a ton of talk about Verizon entering the Canadian cell phone market. My initial thoughts were those of excitement. If a big US company comes to Canada, they’ll surely bring some price innovations and make the big three lower their prices, right?
Let me point everyone towards Target. Target is a competitor to Wal-Mart in the states, and it has recently come to Canada. It made a big push and set-up stores everywhere. Canadians were excited about the opportunity to have a big competitor because most of our competitors to Wal-Mart have failed. Both Zellers and K-Mart are gone. Sears has been greatly reduced, and when was the last time someone shopped at the Bay?
So Target enters the Canadian market and my fiancee and I go and check it out. What do we find? Some nice looking clothing brands, but otherwise, it was like they looked at Wal-Mart’s flyer and price matched everything.
It quickly dawned on me that they did what makes sense for their business. Their job isn’t to beat Wal-Mart by going into a price war, but just compete for their own piece of the marketshare through sales, and other techniques.
Why do Canadians think that Verizon will be different? Why would they come to a market where we are used to paying high prices, and create a price war that would only cut into their profit margins?
Now that the CRTC has mandated two year contracts, they don’t have any huge potential marketing gap that they could have filled. Had Verizon come in two years ago and gave us two year contracts with a slightly higher per month plan price, Canadians would have been super excited, even if the math showed that over the course of their contract, they’d be paying the same as what they’d pay with one of the three year contract incumbents.
Canadians should probably expect more of the same. Verizon is not our telecommunications saviour.