Forthcoming Chatr Wireless causing controversy: Moblicity threatens Rogers with legal action

logoThe federal government’s wireless spectrum auction in 2008 allowed for startups to develop their own wireless service companies. It was designed to diversify the competition, which was essentially an oligopoly.

But Rogers is planning to launch a new wireless service, Chatr, which will target the same demographics as many of these new startups. And it’s quite evident they are not pleased.

John Bitove, Mobilicity chairman, has stated he will file a complaint with the Competition Bureau and seek legal action if Rogers Communications launches its new discount brand, Chatr, as a direct competitor to the new startups.

“They’re trying to destroy our success,” he said.

Mobilicity is one of many: there is also Wind Mobile, which launched in December, as well as Public Mobile. They offer cheap, unlimited talk-and-text plans targeted at the “urban poor and new immigrants,” according to The Globe and Mail.

But last week, Rogers announced that it was bringing out a discount brand. It’s launching it only in certain urban markets where it is facing new competition. The company had filed the necessary trademarks in September 2009. Images of what appear to be Chatr’s pricing and handset selection have leaked onto mobile technology blogs. They’re roughly the same territory as the discounted new entrants.

“They’re coming in virtually trying to destroy the little guy,” John said. He has already retained legal counsel and is exploring additional legal avenues. He says Rogers was working to destroy his company by mimicking his cellphone pricing plans and selectively launching the Chatr where there is renewed competition.

Specifically, John says Rogers is contravening a section of the Competition Act that deals with the “Abuse of Dominant Position,” part of which seeks to prevent the “use of fighting brands selectively on a temporary basis to discipline or eliminate a competitor.”

Furthermore, John continued his attack against Canada’s largest wireless company by telling reporters at his Bay Street office in Toronto that Rogers’ founder Ted Rogers wouldn’t have accepted this sort of “abuse of power” when he was battling the phone monopolies. 

“He would be doing the exact same thing today if he were in our shoes,” John believes.

He said he would not file a complaint with the Competition Bureau if Rogers stopped “being a bully.”