The firm notes:
New entrant cablecos will do well in the wireless consumer postpaid market, as they have recently done with wireline telephone. By year-end 2008 Canadian cablecos will have 24% of residential wireline telephone subscribers, up from less 1% in 2002.
New entrants cablecos’ competitive advantage comes from their ability to up-sell wireless especially to their large and ever growing multi-product customer bases, competitive bundle pricing (which will see a deeper wireless discount) and convenience. We expect both new entrant cable and independents will introduce MetroPCS-style pricing and packaging.
Based on its models, the group forecasts that Vidéotron Telecom Ltd. will represent 30 percent of the Quebec market, and Shaw Communications Inc. will take 23 percent of the Alberta/British Columbia market and 14.5 percent of the Manitoba/Saskatchewan market by the end of 2015. Eastlink, meanwhile, could take as much as 19 percent of the Atlantic market.
The interesting twist in the story is that the largest Canadian wireless incumbent, Rogers Communications Inc. (NYSE: RG; Toronto: RCI), is also the nation's top cable operator. MSOs Shaw and Rogers were big winners in Canada’s Advanced Wireless Services (AWS) spectrum auction this summer. So much for cable industry collegiality.
— Michael Harris, Chief Analyst, Cable Digital News