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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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