Canadians Pay Extra For Their Wireless Hardware

Todd Alivoy writes "Looks like Canadian wireless subscribers have been getting hosed when looking to get new hardware. This isn't the first time Canadian carriers have managed to charge far more than thier US conterparts for the same services. Anyone up there know why? It sure isn't the exchange rates." The linked article shows the price disparity for 14 phones available in both markets.

Comments

Re:50lu710n

[Mitreya]

Solution: Buy phones in the US.

I am not familiar with the way cell phones work in Canada, but I would guess your suggestion would not work. If I purchase a phone in US, I cannot transfer it to another US company because of the so called provider optimization (a.k.a. cell phone lockdown). I had two absolutely exactly same cell phones, one AT&T, another non-AT&T from a friend. Once my AT&T phone died, they would not switch my service to the other phone, claiming that it has been optimized for another provider. So I would not be surprised if cell phone companies found a way to block US-to-Canada phone transfer.

Rogers Wireless

[va3atc]

I have a Rogers AT&T (Canada) phone (Pay as you go) and I get charged airtime when someone calls to leave me a message on the voicemail.

So I called up Rogers and asked them to deactive the voicemail, so they did. Now whenever someone calls they get "This costumer needs to setup there voicemail etc etc" and I still get charged airtime! (even when the phone is powered down)

I've called around to all the other cellphone carriers and none of them are this freakin' crazy.

Basically my plan of attack is sell the phone (brand new which seems like a waste) and go with someone like Bell or Telus.

Anyone want a phone ;-)

We get hosed ...

[serialdj]

Because unlike the U.S. we here in Canada have only four cellular carriers, and if you want to 1X, or GSM then there are only two carriers.

No Competition means higher rates, no reason to lower them, who else are you going to go to.

Interesting Stats for Canada

[JumperCable]

I don't know the answer but here are some interesting stats on Canadian wireless:

http://www.cwta.ca/industry_guide/facts.php3

...maybe it's because the Canadian phones need to include both French & English?

You know you could really save a lot of money if your country went ahead and consolidated to using just French.

Re:50lu710n

[Lehk228]

Subsidy lockout exists because cell phones don't actually cost $50-$100, they are alot more and the provider pays most of that price counting on customers using their service long enough to make up their investment, if you buy a phone at it's actual cost you will be able to use it on any compatable network, but with the mess that is the current cell network in the US i'll stick to subsidy locked cheap phones for now.

Access Fee Insanity

[RedSynapse]

I live in Canada and the one thing that made me give up my cell phone plan was the dreaded monthly "Access Fee."

I had a plan that was $20 for 200 minutes any time, but on top of this EVERYONE is required to pay a $7.95 access fee regardless of what plan they're using. So if you're a businessperson with a $100 a month plan you end up paying what amounts to an 8% tax, but if you are a po' ass student like me you end up paying an insane %40 tax (plus you also have to pay %15 tax on top of the total amount). INSANE.

All providers in Canada charge this fee. It seems to be governemnt mandated, although I think I read once that the individual providers are allowed to set what the fee is but they all decided to make it 7.95.

IMHO this is why we don't have wider adoption of mobible phones in Canada.

Also I'm not sure how it is in other countries but every text message you send with SMS costs 10 cents. So if you want to send a text message to your friend's mobile phone that says "Hi Jane how are you?" that's ten cents.. then if she replies "I'm good, yourself?" another ten cents, and on and on. My carrier (fido) had a "introductory period" where they gave away the text messaging for free and a lot of people were using it. Now that it's 10 cents per message (I think it's max 256 characters) NOBODY USES IT. I mean come on, does it really cost them 10 cents to transmit a 256 character max plain text message? I think if they charged 1 cent per message they would make more money because people would actually use the service.

I work for a Canadian wireless provider...

[RhetoricalQuestion]

...a fact of which I am deeply ashamed.

And the short answer is "it's more expensive because they can get away with it."

But yes, it does come down to basic economic, with the corporate greed angle tossed in. Canada is a smaller market, with fewer competitors (4 national, plus a few regional). So the wireless carriers CAN charge more because the consequences of doing so not as great. Plus, the major carriers tend to follow each other quite closely. If one finds a way to charge more for something and get away with it, the others will quickly follow -- why should the other guy be the only one to make more?

IMO, the Canadian wireless industry is not particularly customer oriented -- they are competitor-oriented. It's not so much about "how can I win more customers through my excellent handsets and plan" as it is about "how can I get my ARPU higher than the competitors and my Churn lower, thus sticking it to the competition when the rankings are published." If the customer happens to benefit, it's a nice consequence.

That's why the CityFido plan (you probably haven't heard of this unless you're in Vancouver, but you can transfer your landline number to a wireless number, and you get $40/month unlimited local calling) sent the Canadian wireless industry into a tizzy. The other 3 national carriers began running some pretty harsh Fido switch promotions -- particularly on the East coast, where Fido is based. Makes some sense on a competitor level (take out Fido where they are strongest) but not on a consumer level (Easterners who've never heard of CityFido can't understand why the big 3 carriers are all going after the little guy.)

Mind you, Fido has had financial difficulties lately, so they probably had to pull a gutsy move like this. The rest of the industry doesn't see how Fido's model is sustainable.

But on the other hand, some stuff just costs more here. Hence the people who cross the boarder every month to shop.

Re:I work for a Canadian wireless provider...

[Anonymous Coward]

The model is sustainable because the majority of the CityFido subscribers are not actual Fido customers, they are NEW customers who are switching their landline to a mobile on the CityFido service.

Also, most of them are spending a shitload of money on extras: LD bundles, Call Display, Voicemail, GPRS, etc.

Believe me, CityFido is VERY sustainable for Fido because it doesn't affect another Fido's business, where as Telus Mobility can't really do that because its hurting Telus, Bell Mobility can't do the same because it'd be hurting Bell, and Rogers... well they're planning on launching local phones services too so...

Also, most of CityFido customers don't have only one line, they have 3-5 for the whole house family.

Before CityFido, I didn't encounter that many CONSUMER accounts with 4-5 lines and spending 400-500$ a month. It's quite usual now in Vancouver. (Yes, I'm a Fido CSR)

Re:I work for a Canadian wireless provider...

[RhetoricalQuestion]

From an operational perspective, the wireless and wireline businesses of both Bell Mobility and Telus Mobility are entirely separate. One side doesn't pay much attention to the other. So the sustainability question is not around where the business is going to come from (that's obvious -- who wouldn't want $40 unlimited?) but about how Fido can become increasingly profitable while charging so little.

That is, the big 3 are worried about CityFido pushing the precious ARPU down. Again, attracting new customers is important, but not at the cost of potentially making less per customer. For example, you may have noticed that all the wireless carriers have changed the Evenings clock to start later -- it increases overage minutes, thus increasing ARPU. Customer is screwed over, but hey, higher profits. And since all of them started doing this, competition benefits no one. (I saw a presentation on this a while back; did I mention I'm ashamed of where I work?)

Then again, (just musing here) the sustainability issue may be simply be fear-mongering. Fido, having gone through financial trouble, is probably in the best position to sustain a lower ARPU model since (frankly) they don't need to worry as much about being less profitable than last year. (And with the lowest ARPU in Canada, the CityFido plan probably pushes the numbers up.)

I'm not knocking Fido -- I think the CityFido plan is a good strategy. But the rest of the Canadian industry fear that this will bring profits down.

Oh, just for those who think I flunked geography, I accidentally used internal language, where West Coast = BC+AB, East Coast = ON+PQ, Atlantic = NB+NS+PEI+NF, MB=MB and SK=SK. (It confused me when I started here.)

Re:Simple

[mark*workfire]

Its much simpler to do what I did.

I wanted a Sony T68i phone. Rogers wanted $699 for it, or $399 with a 3 year contract. I don't do contracts since if I'm not happy with the service, I switch. So, off to eBay I went, and voila, for a grand total of $125 Canadian including shipping I bought myself a T68i *unlocked*.

Off to Radio Shack for a Rogers SIM I signed up for an account and have been using it with no problem. Even better, I'm in Europe this month, and simply popped in a SIM from our office over here and have nice GSM service wherever I happen to go over here.

Try that with a Rogers LOCKED Sony phone. Many thanks to eBay!!!