Primus Canada Inc. is breaking into the wireless business armed with a marketing strategy built around what it describes as the lowest stand-alone wireless long-distance rates in Canada.
Primus Canada, a wholly-owned subsidiary
of McLean, Va.-based Primus Telecommunications Group Inc., which offers voice, data, Internet, voice-over-IP, wireless and Web-hosting services, said the wireless service will be provided through the network of Microcell Solutions Inc., and positions the company as a full-service telecommunications service provider.
Adding different products gives Primus Canada a “”substantial increase to our addressable marketplace,”” and lets it compete against other telco players that offer consumers bundled services,”” explained Ted Chislett, president of Toronto-based Primus Canada.
Though it may seem unusual that Primus Canada entered the country first with a VoIP service, Chislett said it had to complete a number of contract negotiations for its wireless business, in contrast to its experience with VoIP, which was provided directly over its own network.
“”It just took a bit longer to do,”” he explained. “”Our IP was first, the local came second and the wireless came third.””
Although Chislett admits his telecom firm lacks the same powerful brand of other wireless providers in the marketplace, its overall phone services have “”over a million customers in Canada.””
More than 90,000 consumers and businesses are already enrolled in Primus’s Wireless Access long-distance service, the company added.
“”I think with some of our other alliances — the Air Miles (partnership) where we offer people great awards and a little extra — I think that will provide additional customers as well,”” said Chislett.
Primus Canada is betting that its wireless offering in the domestic and international arenas will appeal to customers who value its low wireline long-distance rates. “”(Our) rates tend to be in the nine- cents-a-minute (range), as compared to 20 cents or 25 cents from a number of the other players,”” said Chislett.
He wants to capitalize on consumers who avoid making expensive long-distance calls on cell phones and prefer to “”wait until they get home”” to a landline phone. Long-distance callers, aged 19 years to 50 years, comprise the bulk of Primus Canada’s business, Chislett said, adding it will look at additional niches as it expands.
“”Primus has a fairly loyal customer base, and what this represents is another tool in their kit to offer their customers,”” particularly the post-secondary school market that has embraced its affinity programs, telecom analyst Mark Goldberg, president of Mark H. Goldberg & Associates of Thornhill, Ont., explained.
University and college campuses represent “”a very logical place”” to begin offering bundles of wireless and VoIP services, said Goldberg.
Primus Canada can also pursue other markets: The many people without cell phones, and cell-phone users who every few years re-evaluate their service “”because the handsets die or the handsets simply aren’t fashionable anymore or whatever,”” he said.
Although Primus Canada refuses to divulge its wireless-growth predictions, Chislett hopes its market share will be “”a meaningful portion of our business.””
Primus Canada estimates the wireless industry is valued at about $4 billion, as is the local-phone market, and long-distance services generate about $2.6 billion.
Wireless leaders include Rogers, which this year acquired Microcell and owns about 35 per cent of the market, said Goldberg. He added the Bell Wireless Alliance, made up of the Aliant companies in Atlantic Canada, MTS in Manitoba and SaskTel, has roughly the same share. Telus has the remaining portion of 30 per cent.
All in all, Goldberg believes Primus Canada has managed to launch several innovative products, even though the debut of its VoIP service earlier this year saw a lot of customer-support and technical problems.
“”Have they worked all these things out? I don’t think anyone of us will know until it gets out into the marketplace…with some scale behind it. But I don’t think any of the challenges are like putting a person on the moon for the first time.””