This article on Canada’s wireless providers grabbed my attention. Addressing a combination of topics that have been covered both in my Comm 101 class and my Econ 101 class, I thought it would be a good article to blog on. Both the issue of oligopoly and high barriers to entry associated with the wireless industry are mentioned, with the main focus of the article on how the big three firms (Bell, Telus, and Rogers) don’t use cost as a Point of Difference. Instead of cost leadership these companies, especially Telus, focus on customer experience. This is somewhat unfortunate for consumers because due to the high barriers to entry in the wireless provision industry, mainly the lack of infrastructure and towers, smaller providers have a very hard time matching this quality of experience. As a result, most consumers pay very high phone bills, and don’t have an alternative.

This photo shows just how dominant the big three are; over 80% of the market is controlled by 3 companies.

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This dominance, combined with the fact that almost all cell towers are owned by Telus or Rogers allows the big three to ignore cost leadership as a potential defining POD. They can basically charge whatever price they want. Personally, I think phone bills are far too high; I would immediately switch to a provider such as WIND if they had the same coverage and customer experience as the bigger firms.  I know the government has already become involved in an effort to reduce the oligopolistic nature of the industry, but I still think there is a large amount of room for improvement.