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Disagreeing with Mark

Speaking as a consumer, I have to respectfully disagree with some of Mark Goldberg's points in his latest posting about the Canadian wireless market.  He is reacting to a Montreal Gazette piece titled Canada's wireless policy is clueless.

Mark writes:

"More than one such device per person" makes no rational sense. It is a statistic driven by customers arbitraging aberrant pricing plans. Canada should not strive to have disfunctional European pricing models that lead to supra-normal penetration rates. The Gazette apparently thinks that it is good to have multiple phones so that when you call someone on the Bell network, you use a Bell phone; have another phone for your Rogers-based friends and a third for TELUS calls. That is one of the phenomena that drives European penetration in excess of 100%. People holding onto foreign country pre-paid SIM cards is another contributor.

Today I already carry two phones in Canada.  I'm a heavy business user and a heavy personal user of the telephone.  Carriers provide generous evening and weekend plans, but punch users in the pocketbook on daytime minutes.  A plan like Cingular's $99 / month with 1600 minutes of airtime plus evenings and weekends free would suit my needs very well.  Instead I carry a 1200 minute Blackberry plan ($150+$100 for data), plus a separate phone with an unlimited evening and weekend plan ($60 or thereabouts). I am paying 3x the price for less service than my American friends are.

In addition, I also buy pre-paid SIM cards to roam on the US networks because Rogers' $.95/minute roaming charge is so outrageous when I travel.  I travel just often enough to be outraged by their price, but too little to justify their $.22/minute North American roaming plan.

On the topic of phone subsidies, Mark writes:

Europeans typically receive no subsidy for their phones. Would the Gazette also want each of us to pay upwards of $150 more for our phones as well?

As the old commercial use to say, "you can pay me now, or pay me later." Canadians like to pay later. We also like to be able to call local numbers for free from our home phones. Europeans get gouged.

Give me the option Mark.  My current favorite phone is the Nokia N95 with it's 5 megapixel camera and fabulous media capabilities. Not available in Canada.   In fact, you can already buy unlocked phones (including the N95) without contracts from TigerDirect and other retailers.  It's just not widely known. Subsidized phones are the means that carriers drive greater penetration, and also the means by which they lock customers into long term service contracts.  This Canadian would prefer the freedom to cancel service without a contract penalty.  But you know what? When I activated that phone on the Rogers network they demanded a one year contract… because they can. I brought my own phone, and my own SIM card.  It cost Rogers absolutely nothing, except five minutes of a technicians time to get that service running. But I had no choice.

And on wireless data fees, Mark writes:

…blaming high data plan pricing for the delay in iPhone's launch is just not credible. The iPhone hasn't been launched in Germany or any country other than the US. Other countries are said to have better suited data prices; their markets are bigger. But no iPhone. Why is that?

Could it be that Apple is rolling out the product on their own schedule?

Canadians continue to buy the latest versions of Blackberry. Carriers have introduced special plans for Mobile TV that don't charge by the bit. Canadians are continuing to buy wireless services for the first time increasing our penetration rates, and add new enhanced multi-media features which speaks louder to affordable prices than repeated rantings from opinion pieces in papers.

I agree that Apple is rolling out on their own schedule.  However, it's still true that Canadian data rates are outrageously high.  Each and every time I take a photograph with the wonderful 5 megapixel camera on the N95 I want to immediately upload it to the internet.  Each picture is close to 1 megabyte in size because of the resolution.  However, with the consumer data package I have on that phone, I have a limit of 5 megabytes of data per month.  That's five photo uploads.  Thankfully the N95 has WiFi as well, which means I can upload from any hotspot. Now… I COULD upload those photos using MMS service, but how do I upload to my favorite photo sharing site, Flickr?  Can't.  They don't have an MMS interface.

Most of what I want is choice.  When carriers try to maximize their profits with new product offerings that constrain my choice, I get upset.  I don't want to pay them for their Mobile TV.  I want a decent price on a connection where I can choose the content — the Internet.  I don't want their phones.  I want the choice to use any phone that I desire.  And most of all I want all of this on terms and at prices that carriers in the rest of the industrialized world seem to have figured out how to deliver profitably.

Viewed through the lens of the telecom business, Mark is dead on when he writes about increasing market penetration, etc.  But viewed through the eyes of the consumer, the industry is out to lunch.  Most people hate the wireless industry's gouging contracts, would like to use more data services but are afraid of the prices, and want the cool and sexy handsets they see our US friends sporting. 

{ 3 comments… add one }

  • Jason Yeung July 27, 2007, 11:36 am

    Slowly, carriers are lowering data rates – or at least giving more bang for the buck. Bell has a promo right now where $99 nets you 1GB of data…

    – Jason

  • Alec July 28, 2007, 3:48 am

    Argh. And I just renewed my Rogers contract in exchange for a cheap BlackBerry.

  • Robert July 29, 2007, 8:46 pm

    You, sir, nailed it. I have no desire to watch tv on my cellphone…and if they can afford to stream video to my handset, why does it cost so much just to check e-mail?

    I'd go so far as to say data plans in Canada are flat-out discrimination against small businesses. $25 for for 4MB? Give me a break…and that's Telus, I think Rogers' base data plan is like, 500k.

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