TELUS CEO: Don’t Expect Price War with Verizon, Not Their ‘Style’

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If you thought Verizon’s entrance into the Canadian wireless market would trigger a price war, you may be wrong, according to Telus CEO Darren Entwistle. That’s typically not their style, he says, which makes us wonder what their style is. But Entwistle has an answer for that as well.

“That’s typically not Verizon’s style,” chief executive Darren Entwistle said Thursday in an interview with The Canadian Press.

“Their philosophy has been more on premium pricing,” he said, adding that Verizon’s focus would be on its business clients that have operations in Canada in the Montreal and Toronto areas.

“So I think that mitigates the probability of a wider price war within the consumer market segment.”

Entwistle now thinks the possibility of Verizon coming to Canada is now 50–50. His words strengthen the Big Three’s position, as the rumours of the red US carrier’s interest in the market has caused a cumulative loss of $14.7 billion on the capital markets.

In line with the Big Three’s marketing campaign, which highlights the importance of rural areas, Entwistle points to Verizon’s strategy in the US. The carrier has turned down money from the American telecom regulator to develop network infrastructure in rural areas, saying it has its own strategy within rural domains.

In other words, Verizon will be focusing on large markets such as Montreal and Toronto, he suggests.

But Entwistle isn’t the only one thinking that there won’t be a price war if Verizon steps into Canada. A recent study published by Moody’s suggests the same.

What would you expect from a fourth national carrier?

Technology enthusiast, rocker, biker and writer of iPhoneinCanada.ca. Follow me on Twitter or contact me via email: istvan@iphoneincanada.ca

  • curious

    What would you expect from a fourth national carrier?

    I would expect some sort of a reason to switch 🙂
    Not sure how they expect customers if they dont lower prices …. good luck with that.

  • Pat Daigle

    Well Verizon wouldn’t be introducing a “everything included” for $30-$40 range like Wind and Mobi have now. I expect them to be on par with the Big 3. If they do focus mostly on business, it means the margins on the residential side aren’t high enough for them (isn’t that a scary thought? Imagine a company thinking that the profit being made by the big 3 ISN’T BIG ENOUGH to bother investing). Just my 2 cents.

  • JP

    Well there is one factor missing here. All customers are not equals… A lot of people, mostly business people, do a lot of cross-border stays and currently pay a LOT of mone for their US roaming. I personally had cell phones bills in the 250$/months for more than 2 years while having a project in the US. These customers are the most profitable anVerizon can steal a solid part of them with one simple plan: North America voice & data, no roaming, included long distances.
    There will be no race to the bottom on entry level / promo plans, but a fierce battle on the most profitable segments.
    I think this is the major fear Robelus have. Verizon can make a true NA plan with no roaming and they can’t, well not without loosing a huge part of their profits.

  • Lukas

    I would expect Canada & US wide calling and data for same or similar price as LOW3 (Robellus) have for Canada only.

  • this cant be right

    are you suggesting verizon doesnt care about some 3 billion dollars? (that’s rogers alone)

  • speedracer99

    Anyone ever wonder if the BIG 3 would simply become the BIG 4 aka from Robellus to Robelluszon

  • Pat Daigle

    What $3 billion are you reffering to? Where does Rogers come into this? $3 billion is the estimate that it would COST Verizon to build out a Canada wide network similar to the big 3.

  • Pat Daigle

    Interesting strategy, hadn’t considered that one.

  • whatever
  • Pat Daigle

    Well that’s what I mean… If the Revenue for Rogers Wireless was $3 billion last year (I’m assuming this figure is correct as I have no idea myself) and Verizon decides to focus on Business customers in Toronto and Montreal only, it means the cost of that Canada wide network is too high for that $3 billion/year revenue! (it would be smaller as the market is already saturated). That’s the thought that scares me.

  • oops i was wrong

    i misread the report it was just a quarter.

    just for wireless, just for rogers in 2012 they made 9.4 billion

    2012 annual report : (http://downloads.rogers.com/IR/2012-annual-report/index.html)

    im guessing the other 2 are similar.
    anyway, that’s no chump change, in my opinion.

    my only point is that i cant believe that it is not worth to chase a piece of that pie.

  • Al

    Free Canada/US calling/texting/data roaming IS their most powerful ace in the hole and I’m really hopefully they use it to gain customers, as opposed to just raping – I mean reaping – profits from customers like the big 3 currently do. It would even garner them a few extra US customers who visit Canada with some regularity.

    Time will tell.

    I’m not sure I buy the business-only strategy. Especially since it just sounds like more fear mongering from one of the big 3. It doesn’t exactly make sense to me.

  • Al

    It’s a distinct possibility.

  • jumped to wrong conclusions

    ill just shut up 🙂 i misread the annual report too… lol.
    sorry! my fault. done.

  • PRSHAN

    about 30 million visitors cross the border every year from the United States into Canada
    and 5 million Canadians cross U.S to each year

    i dont paying same price

    VERIZON OFFER NORTH AMERICA PLAN THAT WHY BIG 3 AFRAID OF
    All Canadians have different view

    let me break it down
    some people want low price
    and some want more better PACKAGE same price

    WORLD BIGGEST MOBILE PLAYERS

    Vodafone Controls (Europe Market, Australia, India, South Africa) ROAMING FREE

    América Móvil Controls (Mexico and Whole Lanita South American Market) ROAMING FREE

    Verizon Wireless will be first time to Controls North American Market (USA, CANADA 2013) ROAMING FREE SOON

    VERIZON JUST COMPLETED ROLL OUT 98% THERE 3G/4G LTE ACROSS U.S THAN INCLUDE THE SMALL CITIES COVERAGE
    THEY WILL DO THE SAME FOR CANADIAN URBAN CITES ALSO

  • PRSHAN

    THE BIG 3 CAN NOT OFFER NORTH AMERICA PAN
    THAT WHY VERIZON CAN

    THAT WHY BIG 3 BRING PRICE DOWN VERIZON DON’T HAVE DO ANY THING ADD MORE PACKAGE SAME PRICE

  • A new decepticon character??

  • taguntumi

    New arrival from UK. Obviously shocked at the price of many things in Canada but not sure I understand the focus on Verizon. if the market opens up which is what the government are suggesting it could be Telefonica, Orange, Vodafone or even Hutchison who as ‘Three’ in the UK certainly kept iPhone prices down – all you can use data, 600 minutes, 1000+ texts for $50 inc tax.

  • That’s a decent plan for the price. All you can eat data is nice.

  • PRSHAN

    VERIZON NORTH AMERICA PLAN IS THE KEY BREAK THE BIG 3 MONOPOLY AND BRING THERE PRICE DOWN

    OTTAWA KNOWS IT

    WIND/ MOBILITY KNOW IT

    AND THE BIG 3 KNOWS IT

  • PRSHAN

    VERIZON WILL BE THE KING NORTH AMERICA TELECOM INDUSTRY HERE WHY

    ONCE VERIZON ENTER CANADA THEY WANT BOTH SIDE BE HAVE FAIR PLAN PRICE

    VERIZON WILL NOT BRING THE PRICE DOWN

    THE BIG 3 HAVE TO

    INSTEAD GIVING OF CANADA PLAN AND U.S PLAN WIL NORTH AMERICA PLAN BOTH SIDE OF THE BORDER

    AT&T & SPRINT AND T MOBILE WILL BE AFRAID TOO (U.S SIDE) WIL LOSE A LOT OF COSTUMERS FOR THIS

    THE BIG 3 ROGERS BELL AND TELUS (CANADA SIDE) WIL LOSE A LOT OF COSTUMERS WILL

    THAT WHY VERIZON HAS THE UPPER HAND BOTH SIDE BORDER

  • Al

    One can only hope.

  • Al

    That seems like the most likely scenario to me.

  • Al

    That’s the scenario I’m giving the most weight, given the players involved. Fingers crossed.

  • Al

    I would looooove to see a UK company (assuming they have the capital) in this deal instead of Verizon. What Verizon brings to the table is somewhat minimal (certainly not better pricing), but it may be the best option out of all the North American companies due to coverage and deep pockets.
    I feel for you with regard to the insane cell prices you must pay over here. At least some other things are cheaper than in the UK.

  • Johnny Appleseed

    This is the biggest crock of bull of ever heard. If what he is saying is true, that Verizon’s into premium pricing, then why go and launch an aggressive campaign to keep them out of Canada?

    Where is the aggressive threat to the big three if this is true?

    This is the telltale sign of a very nervous CEO trying to suggest that there will be no savings if Verizon comes in the Canada. As the famous saying goes, watch what they do, not what they say.

    A new competitor into the marketplace, and they’re going to focus on premium pricing to get more customers? What an absurd conclusion.

    The real question is what is premium anymore? Texting is going to go the way of the dodo bird, as there’s many apps that handle texting without charges. There are even apps for your own voicemail. Bottom line, there’s an app for almost every premium service that charges nothing, or next to nothing.

    As the whole world moves over to VoIP, the only thing that telcos will be selling the future is data plans.

    At this point if Verizon comes in, customers will be focusing on voice North American wide calling, North America roaming, and data packages. Everything else will be done with apps.

    So how do you focus in on premium pricing with voice calling and data plans? You can’t!

    That’s just my two cents.

  • websnap

    Yes, someone gets it!

  • websnap

    I agree, but please don’t shout…

  • Dave

    Don’t encourage the caps-lock commando 🙂

  • Al

    See the link above the comments section titled “Verizon Investment to Setup in Canada Estimated at Over $3 Billion [Study]”? … Read that.

  • 1His_Nibs1

    So if what Entwistle is saying is true, then why do the big 3 have their panties in a gigantic knot about Verizon’s potential entry into the Canadian wireless market?

  • JB

    Verizon does price at the high end of their market. It just happens that their high end is cheaper that what we’re used to; that doesn’t necessarily mean they’d be coming in here, guns blazing.

  • Al

    “their high end is cheaper that what we’re used to”
    I don’t think so.

  • JB

    Actually, upon closer inspection, I see you’re right.

    Verizon: $40 phone + $80 for 6 gigs data. That’s shared data, mind you, and you can add $40 for additional lines, but still, not too far off of the Big3.

    ouch.

  • Al

    – Control of Canada/US roaming.
    – Other possible features that will make it difficult to compete against.
    – A significant loss in customers as (assuming all things are equal) the population is divided by 4 instead of 3.
    – Perhaps a fear of this leading to a foothold into cable markets? (just wild guessing on that one)

  • JB

    Ungh. And a 48% profit margin. Good thing they outsourced all those jobs to squeeze an extra 2% profit margin.

  • PRSHAN

    that why the BIG 3 is afraid Verizon going offer roaming VERIZON will drain the big 3 turn them in to small 3

    Verizon will than ask government open the for TV sector DISH NETWORK AND DIRECT TV will have there revenge on BELL for them banning them from Canada 20 years ago Canadians will finally have all American channels we want

  • Al

    Wishful thinking perhaps. But wouldn’t it be nice to have DirecTV. Unfortunately the communist CRTC may not allow it. Especially if Bell and Shaw continue to lobby against that.

  • PRSHAN

    you never know Al Verizon could change that when they enter Canadian market we will wait and see a lot of Canadian are influence in American pop culture (movies, music, products tv media, clothing wear, jersey theam, and sporting ) and many more

  • johnnygoodface

    …please! …

  • ward09

    LOL, Well, I don’t know what Verizon’s plans are, but I’m an expert on Telus, Rogers and Bell… collusion.

  • taguntumi

    Only Vodafone is a truly UK company, the rest are multinationals and I would imagine are bigger than any or all of the incumbents. Vodafone is one of the worlds largest mobile companies and owns 50% of Verizon.

    Hutchison is part of a larger global conglomerate from Hong Kong but has form in shaking up markets setting up Orange as UK number 1 before it was bought by France Telecom (who took the name) and then again as Three who have kept a cap on UK pricing.

    As I’m learning the problem with Canada is the small population over a wide area and the entrenched encumbents. The scale of their advertising and campaign is impressive, let’s hope it falls on deaf ears as freeing up the telecoms industry could have wide implications. Cheaper dairy, chicken if Canada signs the Trans Pacific Partnership maybe.…

    Sorry to disappoint but most thing are more expensive over here than in the UK, competition arrived in the UK some years ago. Canada seems to be full on entrenched interest groups. Not at about money though Canada is an amazing country.

  • Al

    You’re kidding! I had no idea that Vodaphone owned half of Verizon! 3 had some great pricing. As a traveler there, it sure caught my eye.

    In regard to UK/Canada pricing, maybe I was shopping for food & clothes in the wrong places, but if you put a CDN $ sign in from of the price instead of the pound sign, you would pretty much have the Canadian price. The same for accommodation (not counting London, which wouldn’t be a fair comparison).

  • taguntumi

    Actually I should clarify, missing one word out can change the meaning. Vodafone owns 50% of Verizon Wireless not the whole of Verizon but of course it is Verizon Wireless we are talking about.

  • taguntumi

    Exactly. I think the Telus CEO/CFO quoted in the press is kidding himself. Price war inevitable as the new entrent tries to achieve scale.

  • Josh

    1. Verizon enters Canada, offers same prices and features as ROBELUS, albeit with unlimited roaming.

    2. ROBELUS lowers prices to compete.

    3. Verizon offers cheaper plans without unlimited roaming, as well as slightly more expensive plans with roaming included.

    4. Happy Canadian customers 🙂