I have long known that the Canadian Mobile phone industry is gouging its customers – even before I owned a cell phone. Until I moved overseas I never had a need for a mobile phone, and I worked with the fantastic long distance plan offered by Sprint Canada (now defunct after being purchased by Rogers).
When I moved to Singapore last January, it was impossible to operate socially without mobile phone (AKA a Handphone in Singapore), and I immediately bought a used, and basic, mobile phone capable of sending/receiving text messages and phone calls.
The phone was 50 dollars Canadian, and still had 8 months of warranty left. Here it is worth noting that the rate of cell-phone replacement for the demographic of roughly 14-28 is a new phone every 10 months.
I bought a SIM card for the phone for 18 Singapore dollars, which came with 18 dollars of credit, and topped it up roughly every two weeks for another 18 dollars (at the time, 1 singapore dollar was roughly 70 Canadian Cents). My monthly bills in Singapore were about 30 dollars Canadian – cheap by Canadian standards.
What was fantastic in Singapore though, was that *ANY* incoming call was free, no matter where it originated from. Additionally, any incoming SMS was also free. Imagine how happy my family was when I said "call anytime, it’s free for me." (in fact, all carriers I know of in Asia and Australasia did not charge for incoming anything, regardless of the time of day).
After living in Singapore my travels to China saw me buy a new SIM card for about 100 Yuan, or 15 Canadian Dollars, which I used in case of emergencies, and was perfect for me.
Moving to Australia my plan was a 50 dollar ‘cap’ from Vodaphone, which gave me 240 dollars of credit I had to use in a month (note: 1 Australian dollar was about 90 Canadian cents). For 50 dollars I actually received 240 dollars of credit – that is unheard of in Canada. Where is the bonus for your customers?
I used my Australian credit aggressively, and I even used my mobile to access a local telephone number to call internationally. You would be surprised at how hard it is to use 240 dollars worth of credit with only local phone calls and SMS.
The return from my journey saw me in a state of flux, in need of a mobile phone, and in search for a carrier. My dilemma was that there is only ONE GSM carrier in Canada, and it is Rogers (Rogers owns Fido, there is Bell, Telus, and Virgin – who rent lines from Bell – all of which are CDMA networks). Not only is Rogers the only carrier, but it is impossible to get a ‘starter’ plan for less than 40/45 dollars a month with all the services fees and levies, unless you are on a pay-as-you-go system.
Customers, with a lack of choice of carriers are being overcharged in a market that has two carriers controlling the market: the essence of a monopoly. Canadians are pushing for market deregulation to lower their costs. According to this article in The Globe, "The average cellphone bill is one-third more in Canada than in the United States". Do you see a problem? I do!
Recent articles in The Globe And Mail note that carriers are not anxious to market deregulation (and the loss of an iron-fisted monopoly), but it is clear that Canadians are getting screwed. Thomas Purves, in a recent article I picked up from my friend Sameer, paints a gruesome picture on the present state of the mobile market in Canada. In the graph below one can see how outrageous data costs are for Canadians when compared internationally:
For many, employers pay for cell-phones and their respective data plans, but end-users are getting creamed. BlogTO, a local Toronto blog, has also posted an article, highlighting that once you are locked into a contract you can not argue with their automated system (and I have heard some horror stories about being charged, a few of them involve myself). In fact, I have blocked all internet access on my phone for fear that I might press the wrong button and get charged exorbitantly for a mistake. I keep track of my bills and rates, paying careful attention to this fantastic RedFlagDeals post highlighting how to get the best bang-for-your-buck with your plan. (log in to view the post). In an age where customers are communicating with each other it is no doubt that we are getting smarter at dealing with these big companies. But will it change?