Are cellphone users ready for satellite radio? CATHERINE MCLEAN AND GRANT ROBERTSON Globe & Mail
07/07/06 http://www.theglobeandmail.com/servlet/story/LAC.20060707.RTELUS07/TPStory/Business Wireless carriers have found another way to transform the cellphone, this time cramming satellite radio into the increasingly complex device. Telus Corp. yesterday became the first Canadian wireless company to make the jump into satellite radio, offering XM Canada's service to its cellphone customers. Radio is the latest in a number of new wireless entertainment features launched by the carriers that could tempt consumers into spending more on cellphone services. Long gone are the days when the cellphone was just used for talking. As more and more Canadians sign up for wireless service, the carriers are looking for new ways to drive revenue. As a result, Telus and rivals Rogers Wireless Communications Inc. and Bell Mobility Inc. keep rolling out new data services, ranging from picture messaging and Web browsing to TV and radio. "We want your cellphone to be as indispensable as your watch and your wallet and your eyeglasses when you leave the home," said Robert Blumenthal, Telus's senior vice-president of products and services. So far, however, it's more of an experiment than real revenue generator, one analyst said. According to Yankee Group surveys, less than 10 per cent of cellphone subscribers in Canada use entertainment services. "For the carriers, it's really a matter of experimentation at this point to see what's going to stick to the wall," Yankee Group analyst Jeff Leiper said. "The services are just too new. I don't think people know they want them." Messaging is the most popular non-voice service, followed by downloads and ring tones, according to Mr. Blumenthal. Radio lets Telus expand its portfolio of entertainment services for cellphones. "It will simply provide lots of choice for users on their cellphones," Mr. Blumenthal said. But they're going to have to fork out a significant premium for that pleasure. The 20-station radio service on Telus will cost $15 a month, or $25 as part of a bigger entertainment bundle. That compares with XM's 100-channel offering for $12.99 a month on its receivers. For now, the wireless companies have time to figure out what functions, other than calling, consumers will want, Mr. Leiper said. Down the road, however, he believes cellphone carriers will need to offer these entertainment services. "People aren't going to choose a Telus phone today because it has XM radio," Mr. Leiper said. "Five years from now, do Bell and Rogers have to have some sort of compelling music offering? Absolutely." One big obstacle for these new services is technology. Wireless TV, for example, tends to be more choppy than on the big box at home, though quality is improving. And Telus's new radio service works on just two of its cellphone models. A small percentage of Telus's customer base has those devices, so users who want the radio service will have to buy a new cellphone. Then there's the danger of consumers balking at their increasingly voluminous bills. However, XM Canada chief operating officer Stephen Tapp said the company isn't worried about contributing to consumer fatigue from too many add-ons with their cell bill. "It's a totally legitimate question in terms of how much more can you fit into the cellphone," Mr. Tapp said. "But this is something that's going to be a premium service for a premium subscriber willing to pay that amount." ================================ George Antunes, Political Science Dept University of Houston; Houston, TX 77204 Voice: 713-743-3923 Fax: 713-743-3927 antunes at uh dot edu Reply with a "Thank you" if you liked this post. _____________________________ MEDIANEWS mailing list medianews@twiar.org To unsubscribe send an email to: [EMAIL PROTECTED]
