Canada’s mobile wireless industry appears headed toward another stage of accelerated growth as the country’s three national operators reported gaining more than 400,000 new net subscribers in the second quarter alone. Q2 2005 now ranks as one of the quarters with the most net subscriber additions in the history of the Canadian wireless industry. Rogers Wireless captured approximately 124,500 subscribers; Bell Mobility gained 146,000 net additions; and Telus Mobility added 131,100 new subscribers (see chart below for more details on pre-paid and post-paid mix). "There has certainly been no discussion here that we feel we pre-bought any of the quarters or a rollover from a previous quarter. I think we’re just seeing an acceleration of growth," noted George Cope, president and CEO of Telus Mobility, during the firm’s Q2 conference call. Telus Mobility announced during the call that it will revising upwards net subscriber additions to more than 525,000 for the entire year. Bell Mobility rebounded in the second quarter from a horrible January-to-March period where the one-time king of Canadian wireless lost approximately 5,000 post-paid subscribers, but was bumped into the black by 42,000 pre-paid additions, largely from the then-recently launched Virgin Mobile Canada. The second quarter was significantly better for Bell Mobility as it bested Rogers Wireless by a slight margin to record the highest number of post-paid subscriber additions of the three national operators. BCE Inc. executives said during the firm’s Q1 conference call that the poor subscriber results were primarily due to aggressive pricing from its rivals and the "billing hangover" resulting from the massive billing system change fiasco (RoW, May 17/05). But now the tables appear to have turned for Bell Mobility as Rogers Wireless and Telus Mobility complained of steep discounts and irrational wireless data services pricing on the part of the number two player. Rob Bruce, president of Rogers Wireless, noted that the second quarter was "very competitive" and was witness to some "very intense pricing activity largely by Bell." He was particularly concerned with the $0 phones and BlackBerries Bell was offering, and the move to extend per-second billing to business customers, "something we hadn’t seen in the category for sometime." Both Rogers Wireless and Telus Mobility are especially concerned about the slippery pricing slope Bell Mobility may be heading down with the recent re-introduction of a revamped Solo Mobile youth-oriented service. Available in both post-paid and pre-paid plans, the service is aggressively priced compared to other offers in the market (see box below for more details on Solo Mobile).  On the pre-paid side, there is no doubt it is taking on greater importance in the market due to the advanced stage of penetration, but the number-one and number-three carriers still believe in rational pricing.  Bruce said, "I think it’s disturbing anytime we see stuff being given away. We know that SMS has an incredible value...our SMS growth is over 120% year-over-year in Q2. When I saw I was puzzled. But clearly we continue to be very focused on playing our game on pre-paid which growing the higher value customers within the pre-paid game. Clearly others have different approaches to that ."  Telus Mobility noted that it had to lower prices for its pre-paid product to a certain degree to compete with the lower-priced offers from rivals, resulting in some change to the pre-paid/post-paid mix in the quarter. "We have seen some incremental growth on the pre-paid area and that is primarily driven, we believe, by the fact that we lowered price — not as far as the new entrant had, but had to lower prices to stay competitive with both Bell and Virgin. Therefore, some clients were taking pre-paid that we think previously would have taken post-paid on family plans," Cope noted. Solo Mobile pricing doesn’t seem to concern Bell, though, as it believes the $1 per day for 10-4 services more than makes up for the free wireless data services it is including with the service. "When we look at the users that we have on text messaging charging $1 a day... does enable us to make an interesting gain," Pierre Blouin, Bell Canada’s group president of consumer markets, said during BCE’s Q2 conference call. He admits that wireless data services represent a huge growth opportunity for average revenue per user (ARPU), but Blouin believes other measures the company has taken will help in this regard. "...We have increased from 10 cents to 15 cents a minute the text message price that we are charging throughout Mobility. So, we are following rational pricing in our opinion," he said. The impact of this type of aggressive pricing does have at least one carrier concerned going forward. Telus Mobility suggests that its ARPU could be flat for the remainder of the year due to the widening gap between it and one of its competitors. While Cope didn’t mention the rival, he noted, "once you get over 20% we’re just concerned that we can’t keep growing that gap. When we see text messaging included in new rate plans by our competitors that we don’t think are required, we think that can have some impact on accretive ARPU...It’s a 100,000-foot comment that says in a competitive marketplace with three players, the gap between you and one of your competitors can only be so large, so we have to therefore make sure we maintain competitive responses."