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Carriers Respond to CRTC Wireless Code, Hint Higher Handset Prices Coming

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Earlier today the CRTC unveiled their Wireless Code, which aims to change the way wireless services are provided in Canada. Users will now be able to cancel contracts after two years without penalty and also get phones unlocked after 90 days into a contract (which already exists).

The biggest part of the code is the section on two year contracts, which means customers won’t be tied into plans for as long. But those shorter terms might come at a cost, based on the reaction sent to the CBC from our wireless incumbents. Here’s what they had to say…

TELUS

“Telus replaced contract cancellation charges with a device balance some years ago,” the company said in a statement. “We also already offer phone unlocking for our customers, and we already have a cap on international data roaming.”

It said the new code will “give Canadians a strong and friendly set of protections.”

Rogers

Rogers responded, like TELUS, the company already fulfills numerous requirements outlined in the code, but said to comply by December is going to be an issue to put all the necessary system changes in place:

“None of this is rocket science, but it all takes time,” Ken Engelhart, Rogers vice-president in charge of regulatory issues, told the news agency.

“And when you’re a big company with big IT systems — or for that matter, a small company with small IT systems — these things typically take 12 to 18 months to implement, and the CRTC has given us six months.”

But what is most interesting are Engelhart’s words noting shorter contracts could result in smaller subsidies–which means your iPhone on a two year term could cost more up front:

Shorter contracts could also mean cellphone companies might offer smaller subsidies on devices — meaning customers might pay more up front for their phone, Engelhart said.

“I’m not sure that this will be something that consumers are necessarily going to be positive about, but time will tell,” he said.

Bell

Canada’s third largest carrier by subscriber base similarly warned two year terms could result in “less flexibility for consumers”:

Bell spokesman Paolo Pasquini told The Canadian Press that the company already provides customers with a number of ways to avoid signing a long-term contract and warned a two-year time frame could end up limiting their options.

“Most have chosen three-year contracts because of the big price reductions they mean on the latest smartphones,” he said. “Restricting to two years means less flexibility for consumers, so it remains to be seen how they’ll respond.”

The Canadian Wireless Telecommunications Association (CWTA) also warned in a statement these changes by the CRTC could mean up front purchases on two year terms could be more expensive:

“This requirement does limit consumer choice in the marketplace, and could make a customer’s upfront purchase price of a smartphone more expensive than current offerings,”

The CWTA, a lobby group on behalf of Canadian wireless industry, also went on to say technology development and major costs related to implementing these new changes could mean delays, but the industry “will work very hard” to meet code requirements by the December 2, 2013 deadline.

What do you think? Is it worth it to pay more up front for you phone in exchange for two year contracts? It remains to be seen whether two year iPhone subsidy pricing will match those advertised in the USA.

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  • FragilityG4

    They really can’t stand losing … Not to mention they don’t care what Canadians want and attempt to tell us what we want.

  • WhatdF

    12 to 18 months? Rogers should fire all their IT’s if they can’t make it in 6 months. They will only add new system for new contracts not the old ones. Hello?

  • PCNix Toronto

    I never really cared about 3 year term. I’ve always been on a term for as long as I can remember and yet I get good service and great plans along with heavily subsidized iphone. So why limit option for people who don’t care for a contract?
    I always say I need a phone at any given time whether it was on a contract or not. Hence I never cared, I’ve also never cancelled my account that I’ve had for the last 12 years – I don’t need to cancel because I always get a good plan.
    I simply don’t understand public’s hatred for contracts. If you want to be with a cheap company, there are other options. If people waited out their existing 3 year term, they’d be with losers like public mobile by now. So don’t upgrade your phone, let your contract run out and if you need a phone in middle of your contract, pony up and buy it outright.

  • Flaxx

    What a pile of crap. The US has managed just fine with 2 year contracts offering the same price or less for phones than in Canada. We’ll be just fine.

  • Rio

    I 1000% agree but people want everything for nothing.

    I have never needed to cancel my contract or plan on anytime soon. It is funny I have seen people break their 3 month old phone and then complain ‘these 3 year contracts are horrible, now I do not have a phone cause I am stuck in it’ >.>

  • FragilityG4

    I 100% disagree with you. The rest of the world has survived on two year contracts just fine, so what’s happened in Canada that we can’t? It’s nice that you’ve had great experiences but the fact is a lot of people haven’t. I personally had a situation this year that after signing a three year contract I called in to modify my plan. Well the CSR stupidly ereased my 6GB plan that I’ve had for three years. After a month Retentions finally gave me a replacement plan but now I’m paying five dollars more a month because of the CSRs mistake. Total crap.

  • prybar

    So, In the USA where the 2 year contract exists, with lower monthly rates, and they pay the same (roughly) for the iPhone, it’s all good? But drop the corporations ability (or hinder it) to force us into longer contracts at higher rates, and the price magically will increase? Does Apple charge THAT much more to ship phones across the border? Greed, pure and simple.

  • erth

    you shouldn’t compare the us mobile companies with the canadian ones. there are more people in the usa so their prices will be lower. our prices in canada will be higher because there are less of us. this is basic supply and demand theory.

  • websnap

    That is absurd. Yes they have “more people” per capita, but that also means they need a way more robust system to support them all. In the end we are getting screwed in Canada. In the states, you can get a iPhone 5 (16 gb) on a two year contract for $199, in canada you can get the same phone for $179 on a three year contract. I would gladly pay $20 to cut my contract by a third but I can almost guarantee that a two-year contract for that same phone will come in at $250-299.

  • websnap

    I am in my last few months with rogers. About a year in they made major changes to their towers in my area and now I get less than half my calls (I get a notification that I missed a call and have VM, even thought I was holding/using/beside my phone at the time). I have swapped out the phone, I have swapped out the sim, I have done everything they suggested and when none of it worked, they suggested I buy out my contract if I was unhappy but that they were not going to do anything because “it was not in their best interests”. My only option was to reward them by paying out my contract (the remaining 1.5-2 years) for service I wasn’t getting. This is why contracts need to be shorter, because there is no way to make companies accountable for poor service in an effective timeframe. When I leave them in the next few months they will chalk it up to me taking a deal somewhere else and not that I was holding them accountable for their poor service and they will go on and do it to someone else. ANd to top it off, if I was to STAY on the contract and not upgrade, I will still be paying a subsidy for a phone I will have already paid for and they don’t remove the subsidy from your monthy bill unless you ask them.

  • websnap

    People don’t want everything for nothing, we aren’t all teenagers who have phones handed to them and aren’t careful with them. People are upset because most of these companies overcharge for services they don’t always stand by but make it impossible to hold them accountable for them. Poor service, both customer and coverage yet they pull the same money out of your account. They openly lie to you and then want you to pay them to leave. In my experience, and I KNOW I am not alone – it is the carriers who want everything without having to do anything.

  • Al

    That’s not “supply and demand theory”.
    As Apple price fixes across the globe. They must also cost fix to their suppliers. All things are equal. Therefore, Canadian companies have no valid reason to increase prices.

  • Al

    Interesting how Telus has already decided that they have a loop hole…

    “replaced contract cancellation charges with a device balance”

  • Jason

    I am sick of the big three and their statements. Clearly many of us Canadians want shorter contracts because 1) the phone is outdated or craps out by year 2 and 2) something better comes along. I understand and im all for paying a bit more for the phone i want. But the they should be reasonable with the new two pricing. The Big three should want to retain our business year after year and no charge use so much off the top that we might never want to come back when the contracts complete.

    I hope we pay no more then $200 for a phone up front. For what phones can do for us, the latest technology etc I would be ok with that. But that would be what i’m willing to pay on a contract for the hottest/best phone out there. If its something like Blackberry i would hope the cost would be no where near that price.

    I would also like to see them revamp the plans. I for one use almost no day mins but im a heavy data user. give me 50day mins or even 25 day mins eves and wkds, some texting and more data. 2 and 3 gb dont work.

    Currently im on a plan with fido 30 for the day mins, eves wkds texting and $30 for the 6GB.

  • crosseyed_mofo

    everything for nothing? dude i only buy my phones outright from apple but still have to sign a contract with rogers to get a good plan (and they dont even give me a discount for not having my phone subsidized)

  • I.<3.Rogers

    If you’re sick of the big 3 and hate paying high prices for your bills, then please feel free to switch to Mobilicity or Wind. Do us all favour. Thanks.

  • jon dow

    Wind!

  • HelloCDN

    I recommend taking a look at AT&T offers (the largest provider in US). I then offer to look at other carriers, for example in Europe, what networks they offer and then look in geography book and analyze the population/country size proportions. I also recommend to do some thinking on why certain devices are not available for purchase in Canada, while being on sale in US.
    And generally, I recommend training some of the analytic skills. Helps in life, you know.

  • Flaxx

    I recommend you take a look at the financial figures for the respective telco companies, in particular their net income. I then recommend using the analytical skills you condescendingly mentioned, especially when it comes to their year-over-year trend. I propose then kindly removing your foot from your mouth. Thanks for suggesting a geography book — having travelled to and explored a couple dozen countries, I think I have a small idea of what I’m talking about, perhaps more so about North America. Perhaps.

  • Flaxx

    I see you drink the telco koolaid by the gallon. Of the area that the big 3 cover, which is a fraction of all of Canada, the population is quite dense. In fact, 90% of Canadian’s live within 200km of the border. So you can throw out your density argument. Also, I hope you know that Wireless spectrum is finite, so once a base station is saturated, the cost/user curve shifts because you need to decrease the size of the cells, which is expensive.

  • Russell

    The big 3 are the only companies that will survive in Canada. Unless a smaller company can provide a broader service coverage area, they will all end up like mobilicity and wind. How do they expect to survive when they only have a small coverage area for their services(and government handouts are not the answer).

    How do we expect any changes from the big 3 when they dont have to worry about their competitors due to limited customer coverage. I would switch in a heartbeat to wind/mobilcity but alas they are not available in my area.

  • Annette Rose Giesbrecht

    Of course it would cost more for two year contracts had they offered it in the first place along with the three year contracts. But now more people are using cell phones, therefore the cost of the two year would not be as high as expected. I suppose in the States, they were paying an arm and a leg for a two year contract when they first started, but now it has gone down.

  • Spaz787

    it’s darn obvious that the CRTC created this rule without any limitations or restrictions on the carriers from charging extra for their hardware. it’s all true…it’s just one more way the CRTC is looking out for the big 3 while pretending to listen to the people. basically, it’s all smoke and mirrors. they don’t care about us. in the end, we will get shafted one way or another. personally, i’d rather watch porn and see others get screwed.

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