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3 Year Contracts Dominate Initial CRTC Draft Wireless Code Feedback

Screen Shot 2013 02 04 at 2 17 36 PM

At the end of January the CRTC launched its draft wireless code and asked the Canadian public for its feedback. Exactly one week later, out of the top 10 ‘liked’ comments in English, 9 of those comments are related to three year wireless contracts, which aren’t mentioned within the draft wireless code. The top comment is the following, from user scottk04:

I am disappointed to see that the Draft Wireless Code does not contain any regulation pertaining to contract length. I believe this is one of the largest issues that plague the Canadian mobile telecom industry and was brought up by many in Phase 1. The “3 year standard” is ridiculous and costs Canadians hundreds of dollars in the event a device is damaged. Insurance for accidental damage is sky high with large deductibles. Three years is a long time in the current technology industry and only providing Canadians with this option is unjust. We should follow in the footsteps of many other countries and limit these contracts to two years maximum. I believe this issue should be the most fundamental policy implemented by this code.

Three year contract lengths are seen as a double-edged sword. For customers, they get top of the line smartphones such as the iPhone for a subsidized price, compared to buying it outright (the iPhone 5 starts at $179 on a three year term). For wireless carriers, this contract ensures they are able to recover subsidies plus extras over the course retaining your business for three years.

The issue here is the contract length. Other countries such as the USA and smaller wireless markets such Australia offer two year contract subsidies on the latest devices, whereas in Canada it’s three years. Many have said three year contracts are soon to disappear in Canada; we saw a hint of this when TELUS offered two year contracts on older iPhones a while back–normally the iPhone has always been linked to a three year term.

You can comment on the draft wireless code by visiting here if you haven’t already. Wireless users have until February 15th to do so. What do you think is missing from the draft wireless code?

Founder and Editor-in-Chief of iPhoneinCanada.ca. Follow me on Twitter, and @iPhoneinCanada, and on Google+.

  • http://twitter.com/erikkappel Erik Kappel

    I’m glad to see people are voicing their opinion on this matter! I’m off to like those comments and add one of my own! Death to the 3 year contract! Seriously. I think it’s clear Canadians have had enough of it.

  • Jon

    Yet no one mentions the true plague: data costs are inconsistent across devices! Data whether in an iPhone or iPad is used exactly the same way so why does it cost differently? Service costs are identical, maintenance is identical. Administration is identical and so costs are identical yet the fees don’t reflect that. Also it is illegal to charge by the bit and byte according to the units & measurements act so WHY is no one talking about this?

  • http://www.iphoneincanada.ca Gary

    Yeah, three years doesn’t make sense here when smaller markets like Australia can get away with two.