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Wireless upstart Wind Mobile has filed a formal complaint with the Competition Bureau against Rogers Communications Inc. (RCI.B-T) for advertising related to its new discount brand, Chatr Wireless Inc.
The move against Rogers follows another existing complaint with the bureau from new wireless company Mobilicity, which alleges Rogers is abusing its dominant market position with a so-called flanker brand that features prices and plans orchestrated specifically to cull the new crop of competitors.
Flanker brands, such as Rogers' Chatr and Fido brands, Telus Corp.'s (T-T) Koodo Mobile or BCE Inc.'s (BCE-T) Solo Mobile and Virgin Mobile Canada are used by the incumbent wireless companies to address shifts in the market without repricing their vast, millions-strong base of existing wireless subscribers.
In a keynote address to the Toronto Board of Trade on Thursday, Wind chairman Anthony Lacavera said Rogers' advertising for Chatr was based on information the wireless giant could not possibly know: Specifically, the network metrics at Wind and how many calls are, or are not, dropped on Wind's relatively young wireless network.
"There is absolutely no solid or objective technical basis for Chatr's claim to have more network reliability and fewer dropped calls than Wind," Lacavera said, according to a transcript of his speech. "The truth is that Rogers doesn't have access to our network stats and we don't have access to theirs, which makes it impossible to accurately compare networks."
In an interview on Thursday, Lacavera stressed his Competition Bureau complaint was different from Mobilicity chairman John Bitove's, which many legal experts and wireless executives had dismissed out of hand because Rogers' prices did not undercut the new entrants' pricing, but rather matched it.
Lacavera said he wasn't "whining" about competition, but merely wanted to address Chatr's marketing material, which has built a campaign around the fact that it has the same prices as many new entrants, such as Wind and Mobilicity, but has a much more stable network with "fewer dropped calls." The influential Canadian telecom consultancy SeaBoard Group, among others, has previously criticized Wind for having a spotty network, though many in the industry say this is normal for a new wireless network and it is, in fact, improving with time.
But these dropped calls, Lacavera said, are the result of a "regulatory loophole" related to a "hard" hand-off, where calls are dropped when Wind customers roam from Wind's network territory onto the network of a big incumbent. He said this is in contrast to other countries where a "soft" hand-off is the norm, whereby the call is seamlessly transferred back and forth from one network to the other without the call ending and annoying the consumer.
In cases such as this, the Competition Bureau will first investigate and may, eventually, choose either to mediate an arrangement between the two companies or strike up a formal tribunal, during which the bureau can subpeona documents from the various parties involved. The process, sources say, can take up to several years to be resolved. It is also possible, however, that the two companies could strike some sort of out-of-tribunal arrangement, or Rogers could simply abandon that aspect of its marketing to address the complaint.