CRTC Questions Telus Over Monthly Pricing at Draft Code Proceeding

On the second day of the CRTC public hearing, Telus wireless plan pricing was in the focus of the regulator, one of the biggest issues noted by Canadians in their replies to the working draft of the Wireless Code.

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Telus was asked to answer the uncomfortable question of why it doesn’t lower monthly fees after the expiration of their contracts to customers who don’t upgrade their mobile phones.

As you may already know, smartphone subsidies are blended into the monthly rates you pay on your three-year plan. Although the CRTC has previously said it doesn’t want to actively regulate wireless pricing, the question was timely, as the carrier has recouped its costs while keeping the subscriber locked to its network for 36 months.

“I don’t get that because it has been amortized. Why are they paying past the 36th month? If you’ve said that you’ve recovered your costs in that 36 months to subsidize it – and I get that is sort of a way of helping folks get into this and you want to keep it. But assuming that somebody does not want to upgrade because the phone is great (and) meets their needs, why doesn’t the cost go down?” CRTC chairman Mr. Jean-Pierre Blais asked.

Turns out Telus offers a 10% discount for subscribers who decide not to upgrade, and even spends “marketing dollars” to advertise it. Yet CRTC chairman Jean-Pierre Blais questioned the incumbent’s policy of presenting consumers the option of keeping their devices and saving money.

“We find the vast majority of our customers upgrade at that point (upon the expiration of a three-year contract) and move into another contract term with another subsidy,” Dave Fuller, Telus’s chief marketing officer said. “In the event that you decided that you wanted to keep the device because it is fine … then you can move to a new rate plan at 10 per cent off.”

As the comments submitted on the CRTC Wireless Code draft show, monthly pricing is among the top complaints of Canadian wireless subscribers. Even the Competition Bureau has told the CRTC that three-year contracts hurt market competition, pointing to other countries such as the US where the norm is the two-year contract.

Incumbents, however, are suggesting Canadians are comfortable with three-year contracts. Furthermore, Bell’s records show Canadians replace their smartphones every two and a half years, which is the fourth-shortest handset replacement cycle in the world. How often do you replace your device, and is there any specific reason for not choosing an upgrade?

Technology enthusiast, rocker, biker and writer of iPhoneinCanada.ca. Follow me on Twitter or contact me via email: istvan@iphoneincanada.ca

  • bbbwww

    My contract ends in a month and I am not going to upgrade. I bought a 4S on kijiji and sold my 3GS and the 4S works just fine. I will definitely take advantage of this 10% off feature that I am sure not many subscribers (including myself) knew about.

  • http://twitter.com/bertinio_7 Roberto Felgueiras

    wow, that’s crap…

    We are NOT happy with 3 years. The US have almost the same cost of subsidy (lets just say for iPhones, as this is the site we are on) for a 2 year contract as we do for a three year.

    As far as upgrades go, the sell products that last less than their contracts. People upgrade early to get a new device because the are sold a free one that breaks half way through the contract. They need a new phone and upgrading is the only way to get one, since the carriers won’t care if your phone is working or not to continue to gouge you on your contract. So you upgrade, only to get stuck with the same carrier.

  • wahgee

    I guess the only problem is we don’t have the same population base as the USA. There are way more people to get money from. However, it is not an excuse to have three year contracts and more expensive price plans in Canada.

  • K3

    Didnt think of that one– Why when I’m running a 3gs LONG PAST contract am I required to pay the same amount every month that another person is paying to own the latest equipment??!? ????????????????????

    Where’s the Rogers customer rep that was here the other day??

  • Jon

    Keep in mind folks that 10% is not the same amount, it is variable based on your plan. If you have a 20$ plan, you get 2$ off but you get 6$ off a 60$ plan. The subsidy in the other hand, is allegedly a fixed amount (about 6-7$ on an iPhone). So you SHOULD get 6$ off whether you have a 20$ plan or a 60$ plan. It’s proof there’s no deduction after the subsidy is paid. Furthermore, it isn’t true that Telus ” offers” 10% off, they give it to you at retentions when ASKED. I hope someone points this out during the hearings.

  • 1His_Nibs1

    Unfortunately “Canadians” pay more for EVERYTHING not just phones. We pay more for groceries……gas…….OTC medicine……….laundry detergent……..cars. The list goes on and on. Why? Because big multinationals like Proctor & Gamble etcetera can and DO charge us more because we’ll pay it without bitching (unlike our neighbours to the south). Don’t believe me? Then check out this past weekends CBC’s telecast of Marketplace and see for yourself. It’s a bloody crime that we pay more and our dollar has been on par with the U.S. (yes it wasn’t long ago that it wasn’t but that was one of the excuses they’d use as to why we had to pay more) now for a few years AND none of this crap is being produced/manufactured in the U.S. anymore like it used to be. They’ve outsourced in an effort to save $$$$$$ at Canadians expense. If something has to be “shipped from China” the last time I checked it’s the same distance to the Canadian coast as it is the U.S. coast! PS I don’t want to hear any BS about the difference in population. It’s made overseas at a fraction of the cost it once was so it should be CHEAPER not the same or in pretty much all cases MORE!

  • kenevin

    My contract just ended, I’m waiting for the next iPhone (after rumours of a June release!). Currently using a 3GS which is slow but I figure it’s worth the wait. Thanks for the info!!! I’m on my way to Telus now!!!!!!

  • Paul

    This is bs. I was “off contract” for two years. I actually called Telus to see if I could lower my bill at all. They said there was nothing they could do without a new contract! Even a friend of mine that works for Telus had no clue this was possible!

  • SV650

    You could have gone month to month on any price plan. I moved my 3GS to pay & talk. It now costs less than $20 per month for my use, including data & voice.

  • fruvous

    I currently have a plan with Rogers and got a new Nexus 4 so I needed to get a micro LTE SIM card. Walked in to a Rogers store and they wanted $10 for me. Obviously I walked out and refused to pay. Their excuse: “You didn’t buy the phone from us so you have to pay for the SIM.” So… Let’s see. I have to pay $10 to give them the opportunity to bill me every month and you would think that since I’m saving them money by not using a subsidized device they could pass out a SIM for free. Also, these things probably cost them next to nothing.

  • http://twitter.com/bertinio_7 Roberto Felgueiras

    not an excuse since being as we have less people, they have less data to manage.

  • Paul

    That’s not the point. If you read the article, they said that they offer 10% off. I’m saying this is not the case when I contacted them. I love my plan, it’s unlimited data. Wouldn’t drop it for any reason, sine every new plan would cost me more.

  • JC

    “Canadians are comfortable with three-year contracts.”

    At today’s plan prices, that’s the most ridiculous assertion I’ve ever heard. The incumbents are either out of touch or outright lying.