Canada’s going ahead with a new cell phone carrier: Wind! Just a few months ago, the Canadian Connectivity Market (SIM-Card Carriers) was heavily monopolized by no other than Rogers. Just until recently, Telus and Bell entered the game with their new 3G network. And now… WIND of Globalive is also entering the game, launching a network that will be similar to Rogers: GSM and HSPA 3G based.
Of course, the three carriers were disappointed of CRTC’s decision to allow WIND. From the Globe and Mail, Rogers’s CEO said that ““there’s no question in my mind that Canada cannot support more than three national facilities-based players.”
To a certain extent, Mohamed statement is true. Relating to economics, because I have an exam coming up, it’s challenging for a new wireless carrier to enter a dominated market. Ignoring the high startup costs, new carriers cannot achieve minimum efficient scale or long run average costs. WIND, or any carrier, is at a cost disadvantage. Thankfully, Telus and Bell, being the other two Canadian networks with enough capacity to make a stake into Rogers, already saturated the connectivity market. This makes it a little easier for WIND.
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