The opinions expressed in this editorial are those of the author and do not necessarily reflect those of Decima Reports. A failure by Microcell Telecommunications to emerge from its current precarious financial position, and the resulting three-player wireless market in Canada, would undoubtedly have some significant benefits to the remaining players. But it would also present some draw-backs for Canadian consumers. Carriers would be afforded a greater sense of stability since the average revenue per user would likely rise and they would be able to reduce their reliance on handset subsidies to attract new subscribers. While the carriers are now posting EBITDA-positive cash flow, the industry in general has yet to post a profit. The emergence of a three-player market would be a big step towards achieving profitability. Carriers have longed to be able to increase airtime rates and reduce their reliance on handset subsidies, but have been unable to do so with Microcell in the market. The Montreal-based wireless operator was very aggressive out of the gate in attracting new subscribers through subsidies and attractive pricing plans. Even in the face of failure, the company hasn’t backed down and introduced an aggressive 15 cents per minute plan to attract more pre-paid subscribers (RoW, Aug. 19/02). A market without Microcell, however, and the prospect of a three-player market presents some obvious drawbacks to consumers. The first is the disappearance of 15 cents a minute for pre-paid. But also with less competition comes the possibility of higher prices. The carriers may feel more at ease in raising post-paid airtime prices and reducing the level of handset subsidies. All this would hit consumers’ pocketbooks. Despite the possibility of higher prices, consumers can expect the carriers to be reasonable in their hikes. Canadians have already shown that their appetite for wireless devices and anywhere, anytime communications isn’t as large as the carriers might have hoped. Hovering around the 37% penetration rate compared to the American penetration rate of approximately 50% demonstrates that Canadians are a lot more discriminating in their willingness to pay for luxury items. And for the majority of Canadians, a cell phone is just that: a luxury item.