Thursday, July 29, 2010

Why Chatr will kill Rogers Wireless

Why Chatr will kill Rogers
If you haven't heard rogers has launched a new brand called chartr. This is good news for consumers but rogers is going to pay long term for this bold move. A cheaper offering is going to cannibalize their other brands, Rogers & Fido.
  1. Consumers are going to expect lower prices and rogers would not be able to sustain it's other brands, due to how much expensive they are.
  2. Managing 2 major brands is expensive. Now a third brand will add additional cost. 
  3. Hopefully the chatr brand offering is different.
On the plus side,
  • The new entrants profit will be delayed or much much smaller
  • Mobilicity taken Rogers to court is great move because if mobilicity plays the PR game very well, they will attract people who will be glad to join the underdog fight. MCI (merge with Worldcom) did this to AT&T during their start up years. 
  • Another example, Porter and Air Canada. Air Canada tried but failed to crush Porter Airlines.

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