Line on new business

Just three days before Christmas, the federal government gave Canada's beleaguered ad agencies something to look forward to in 1993.On Dec. 22, Communications Minister Perrin Beatty officially sanctioned an emerging public cordless telephone market that could see annual sales activity in...

Just three days before Christmas, the federal government gave Canada’s beleaguered ad agencies something to look forward to in 1993.

On Dec. 22, Communications Minister Perrin Beatty officially sanctioned an emerging public cordless telephone market that could see annual sales activity in the area of $1 billion.

After a lengthy competition, four telecommunications companies were granted licences permitting them to set up a pct transmitter system and to become service providers to the public.

It is estimated each company will spend several million dollars a year on marketing and advertising to build and maintain a customer base.

For the agency community, the good news is that the companies are all in need of ad agencies, since they are only now beginning the process of establishing marketing departments and worrying about their advertising needs.

The newly licenced concerns are:

- Rogers Cantel Mobile, part of Rogers Communications;

- Mobility Personacom Canada, a consortium created by 12 monopoly telephone companies;

- Canada Popfone, a consortium of investors from the cable-television and telecommunications industry;

- Telezone, a consortium of six investors led by Toronto’s Robert Koven, president of the radio paging company Telezone.

The pct transmitter system, which will consist of thousands of small base stations sprinkled throughout high-traffic urban centres, will enable subscribers to place and receive calls in public areas using pocket-sized handsets.

Public service is expected to be in place in several cities by the end of the year.

As well, the transmitters can be bought for installation in private homes and businesses with no service charge for air time.

The handsets, which use digital technology, have a range of 150 metres to 200 metres, making them considerably more powerful than current household cordless phones, but less effective than the cellular variety, both of which use analogue technology.

Although pct has less range than cellular, it is also less expensive.

Consortium executives say the first handsets to hit the market will cost in excess of $300, but the cost will eventually drop to about $100.

Cellular phones start at several hundred dollars and run into the thousands.

pct air time will also be less expensive. Average monthly cellular bills are $80 to $90. Comparable pct air time will cost about one-third of that.

An advantage of cellular is that, because of its longer range, it works in a car, while pct does not.

Some direct competition is expected to erupt between pct and cellular, but for the most part, cellular will continue to serve the high end of the market, while pct addresses the low end.

Robert Koven of Telezone estimates as many as 10 million handsets will be in use by 2000.

The majority of the phones will be bought for non-network use in homes and businesses, but Koven says it is believed about ‘two million subscribers will sign on with one of the four public service suppliers within the same period.’

Representatives from each of the four companies say that in the days since the announcement, they have been working furiously to ready themselves for what is expected to be a brutally competitive market share battle.

Canada is the first country in the world to license a pct network with two-way communications capabilities, so the consortium marketers will have to blaze their own trails in selling their services.

Koven says he hopes to establish a marketing department over the next few months and begin advertising by year’s end.

He says Telezone’s immediate goal is to ‘build name recognition and set up a distribution system to the public.’

‘We want to get people to think about Telezone when they think about personal telephones,’ Koven says.

David Annan, general manager of Rogers Cantel Mobile, says he has the shell of a company in place and is still in the process of assembling a full marketing team.

Annan’s director of marketing is Walter Kowal.

Kowal, a four-year Cantel employee on the cellular side, has been working on the development of the pct business for the last year.

Kowal says he will hold an agency review in February and launch an ad campaign by the end of the year.