The real reason that Canada’s new wireless mobile carriers are underperforming – it’s not the Big Three

When the federal government hosted an auction to sell for a slice of the “advanced wireless spectrum,” or AWS, Canadians were thrilled with the notion that multiple new companies were break into the oligopolist telecom industry.

The three that won AWS licenses and survived to actually become a mainstay company are, as you’ll know, Wind Mobile, Mobilicity, and Public Mobile. All three have essentially the same model: to offer as cheap a plan as possible as simply as possible. Because that was why Canadians hated Bell, Telus, and Rogers: they’re too damned expensive and their contracts are too damned complex.

But the performance of the newbies, now over a year in, has been lacklustre. Combined, they only account for roughly half a million users, a mere drop in the proverbial bucket compared with the Big Three oligopoly. Of course, they’re new, and traction must be earned. But Canadians have been so eager for new hope—represented by these three startups—that they should be flocking to Wind, Mobilicity, and Public like there’s no tomorrow. Let’s consider a few possibilities of why that’s not the case.

1. As startups, they have had some customer service hiccups.

2. As startups, their networks have been a little inconsistent.

3. Many consumers are still locked in three-year terms with Bell, Telus, and Rogers.

4. The Big Three have countered the newbies with aggressively discounted subsidiaries.

The first two can be forgiven; nobody is perfect is out of the gate, and they’re all improving. The third is definitely likely, and will diminish as a factor over the next year. The fourth is true enough, although the foul scent of the Big Three still lingers even on discount brands like Koodo and Fido.

But my belief is that the single most contributing factor in why the New Three haven’t impressed is phones. Yes, phones. None of these guys have the new Torch. They don’t have the iPhone. They really don’t have many cool phones at all—and isn’t that what the consumer wants?

The reason these guys don’t have cool new phones is because their wireless network, the AWS, isn’t supported much by big names like Research in Motion and Apple. Not yet anyway. So they’re stuck with inferior devices, such as those made in China, that really don’t draw much love from Canadians.

It’s certainly possible for iPhones and Blackberrys and their kin to run on the AWS, but in order for this to occur, AWS has to be a priority for these companies—and with just half a million users in Canada involved, why would it be? In the U.S., T-Mobile uses AWS and is the country’s fourth largest carrier with 34 million subscribers… and it’s not even a big priority. Fortunately, it’s at least a priority at all, and as phonemakers decide to satisfy T-Mobile’s needs, by default they will also benefit our three babies.

There’s very little Wind Mobile, Mobilicity, and Public Mobile can do about their AWS situation; to be cliché, “it is what it is.” Unfortunately, all they can do to gain market share is what they have been doing thus far—however ineffective it is.