Chapter 10: Industrial Organization in Canada

http://www.vancouversun.com/technology/Wind+Mobile+launches+Vancouver/3110612/story.html

Summary:
This article talks about Wind Mobile joining Vancouver to provide lower-cost wireless service. Vancouver is the sixth city where Wind Mobile has launched its network. Wind will add competition in Canada’s wireless market because there are no contracts which allow customers to leave if they don’t appreciate the service that is provided. Wind is also offering features such as unlimited talk and data plans at no extra cost upon signing with them. They are also offering 50% off the first six months with the company prior to joining Wind Mobile before June 30. For each friend that a customer brings to Wind, one month of wireless service is provided for free.

Connection:
With Wind Mobile joining the wireless market in Vancouver, there would be a more competitive oligopoly. Oligopoly is a competitive situation characterized by an industry that is comprised of only a few firms. When Wind joins the oligopoly in the wireless industry, it will create competition between other companies. There will be mutual interdependence in this industry because other wireless companies in Vancouver will have to consider how Wind would affect them when there are cheaper plans in the market now. With Wind in the market now, the other companies will lose some of their market share to Wind. Wind is also using non-price competition such as sales promotion and service to get a position in the market. They offer unlimited talk and data plans at no extra cost and 50% off for the first six months. This would attract quite a bit of customers especially when they only offer plans and no contracts.

Reflection:
Wind coming to Vancouver to join the wireless market definitely benefits the consumers. There would be a cheaper plans provided by Wind and other companies would be forced to gain back some of the market share by making more attractive offers. In my opinion, these cheap plans provided by Wind are only temporary. Wind is only providing these offers to attract consumers and establish a position in the market. It would be quite difficult for Wind to maintain these low plans offer therefore they will eventually have to raise their prices to make a profit. Wind will be no different than the wireless companies that exist now.