Greg Enright: How deep will the hatchet be buried?

From the Editor

It was a curious scene at the recently held Communications 2001 trade show in downtown Toronto: the leaders of Canada’s biggest wireless players sitting so close together they were literally rubbing elbows. The occasion was a hastily convened press conference to announce that Telus Mobility, Bell Mobility, Microcell and Rogers AT&T Wireless would be opening up their networks to each other’s short messaging service.

What was curious was the thought that as they sat there, smiling and joking about their newborn agreement, each one must have also been reaching for their figurative dagger and wondering how best to use it on their new SMS “partners.”

Bell and Telus might have been gripping their weapons a little tighter than the rest, considering that they had also concluded another cooperative deal with each other and Aliant Telecom a couple of weeks earlier. It allowed for each carrier to use their two counterparts’ CDMA networks to reach new subscribers in regions where they did not have their own infrastructure already in place.

While it will be interesting to watch these grudge matches develop throughout the coming year, it’s hard to imagine either Bell or Telus in particular gaining any kind of significant upper hand on the other. Yes, each company will gain new market share in each other’s backyards. Yes, both firms will be significantly closer to making third-generation wireless services a reality for Canadian businesses and consumers.

But while profits and subscriber lists might grow significantly, it’s hard to believe that one carrier will see significantly more growth than their competitor.


Because once all the technology is place and once all the agreements are signed, the battle will come down, as such battles always do, to marketing. It doesn’t appear that either company has yet attained any kind of clear-cut superiority in this area. Both are savvy, and both have lots of marketing money. But there has yet to be any evidence that either will soon deliver a knockout blow with a stiff marketing uppercut; we’re not seeing a marketing mismatch like that of Microsoft versus Novell in the late ’90s.

If both Telus Mobility and Bell Mobility keep slugging it out with no noticeable chance for either to attain a definite victory, what then? If market conditions dictate that a merger makes sense, don’t be surprised if that’s what starts getting bandied about.

If it gets to the point where the brain trusts of both companies realize that more profit can be made by combining their wireless efforts, by spending less on staff, less on marketing, and by finding other synergies that can reduce costs, there’s not much reason to believe they might not move in that direction.

Of course, the regulators in Ottawa might have something to say about such a proposal, and the intense competition of their parent companies, BCE and Telus Corp., in other areas could ixnay such talk.

But these carriers have proven that they don’t mind burying the hatchet when it makes economic sense to do so. They displayed that willingness on a relatively small scale this past month; it could happen that they eventually display it on a bigger one.