Hell has frozen over: Canadian carriers to let subs walk over contract changes
A day we thought would never come is upon us as the Canadian Wireless Telecommunications Association, whose members include all of the major Canadian telcos and their subsidiaries (including all new entrants other than DAVE Wireless), have agreed to a code of conduct that benefits not themselves but their customers. Just like in the US, Canadians will now be able to walk away from their contracts penalty free if a carrier makes material changes to the terms of the contract. If the customer doesn’t wish to leave their carrier, he or she will have the option of staying on board at a grandfathered rate. Other new rules state that charges and contracts must be more clearly explained, privacy must be more fiercely protected (remember a few years ago when hundreds of pages of Rogers subscribers’ personal information were found in a dumpster?) and customer service must, well, be of service. All in all the new rules sound amazing, but only time will tell whether or not they actually have an impact on the Canadian wireless market.
Hi AZ,
Great comment and I’ll try my best to answer it
Concerning BB msg and sms … what most people don’t know when it comes to BB is that BB msg (or pin-to-pin)uses a direct peer-to-peer transport system which does not temporarely store the msg on any of the carrier’s systems where sms do get stored on the SMSC (message center). It’s the same as if your phones was directly connected together via cable even if there is no cable. Using the same principle, emails on a BB are pulled from youe email provider by a RIM owned server and sent straight to your phone. The information still goes through the carrier’s network as data but it is a “straight-through” passage that does not require storage space. If you are curious about this go read this very nice article on http://www.messaging.telecom2.com/articles/sms_trends_future_of_sms_messaging_tekelec_solutions.htm called the future of sms and read the section about “First delivery attempt”.
For the “best deals” part, you have to understand that all public companies are mostly rated on 2 things by the shareholders/investors; the amount of net new clients they acquire per month and their CHURN factor (client lost to a competitor). So the game is “get new clients” by any means and try to keep the actual ones happy as best you can. New possible clients will always get better promotions to attract them. This has become a business rule applied to ALL domains (not just cellphones) of services and we have the stock market to blame for it. The best way to get “the deal” is just before your contract ends (renewal time), shop around and call your carrier with competitor’s offering details and your carrier will match it or do better upon renewal. Every user has different needs, if carriers slims down on plans or grandfathers too much, it makes his potential market smaller thus losing clients and unable to acquire new ones. Yes plans changes all the time based on those 2 rules. If the neighbor changes something … do the same thing yourself.
Another thing people don’t know is the real reason behind contracts and cancellation penalty fees; As an exemple the BB phone you buy between $200 and $600 (or even free) depending on contract or not is not the real cost. The manufacturer will sell it to the CDN carrier between $1000 and $1500 a unit becaue we have less users (smaller population so we buy less units from them)so if you leave after 3 months or ask for a free replacement in mid-contract they lost/lose $ with you thus needing you for 2-3 years to make sure a profit is made. Don’t subsidize you say? Who will pay $1500 for a phone? very few people will.
For the $51/MB data roaming charges (see my first post). Let’s say that a CDN carrier wants his users to roam in Germany but there are 8 carriers in Germany. They start a bidding process to see who will charge less to their users to hop on the network over there and do a “partnership” with them. The consensus by most countries on the cheapest rate seems to be around $51/MB. Why? too many reasons but population, geographics, cost of operations (salaries in countries like Pakistan are ridiculously low compare to us) just to name a few… Let’s not mix politics and business, Pakistan people should rebel against their government to get clean water instead of buying cellphones
In short … It’s all A LOT more complicated than people think!
Yes, companies are there to make $$$ and yes PDGs are making ridiculous salaries and some indivudals scams and end up in prison when they get caught but it doesn’t mean that big “companies” first purpose is to rip off people. Talk to a business economics teacher if you think otherwise … lol
Bliz,
Your response was educational for sure. However, I am still a bit off with the numbers.
Text msg. I am actually aware on how it works. Did some research on why my text msgs used to get lost time to time. On any given day, what is the storage requirements for text msging (for which 15c a msg is charged outside bundle). In the basic bundle, a 2c charge is understandable). I think, bell would have been much better off just adding the 5 bucks to their line rent, and saying they are throwing in 250 free text msging. 15c incoming msg charge comes across as forcing people to buy a package. I wonder how people will react if they had to pay for emails unless you subscribed to a 10 dollar bundle. Made no sense at 15c each and maybe you can give some numbers based on storage costs these days. Personal issue was that Bell could unilaterally change their terms and I had to abide or be hit with 400 dollar fee. I am glad the industry has acknowledge this, but the fact they had this power will open them to abuse.
I agree with the “best deal” part. But when a company is trying to please their investors over their clients, it is short term thinking where the rates have to be higher eventually. You may have contradicted your earlier posting. Phone companies are giving you financial incentive to call in and complain/threaten. How can you customers toto stop doing so.
Blackberry costs. Can you verify your numbers? My understanding is the Blackberry 9630 is a 650 dollar phone which bell subsidizes by 400 dollars on a 3 year plan with Data. As for not subsidizing, I believe most European countries do not do so and people do buy phones a lot more there. I would think most people would buy a phone they can afford and there will not be cross subsidies going on. However, as per my other suggestion, amortize the subsidy if you want to be fair. If I was to quit 2 years into a 3 year contract, I should only have to pay a 133 dollars. This 20 dollars a month is back loaded which is what I consider entrapment. Almost seems like US style mortgage crises. Helping people buy stuff they cannot afford and then trying to recoup the cost in the form of higher rates.
Roaming charges, I have been unable to find such high rates in the west. You can blame it on any factor you want, bottom line something is not right. As for Pakistan, the salaries may be lower there, but the billions you quote bell is spending on infrastructure will drown out the difference. I would attribute it to “because they can”. There is no incentive to lower the charges. Interestingly, Rogers now has some new international data roaming packages. Maybe Bell will follow suit.
I never believed the purpose is to rip people off. I believe that Bell and Rogers priorities are for short term benefits to themselves (investor relations tops customer relations). They can get away with this because, hey, where am I going to go? Hopefully meaningful competition will lower price forcing these companies to try and get some efficiencies internally. I think they are probably huge job creating machines right now resulting in the costs being passed down.
Does Telus’ November 5th change to their U.S. Roaming fee count as a change that would allow a customer to leave their contract?
TO AZ ….
Because of my work I am a little bit limited as to the information I can provide here so I can’t be more precise when it comes to numbers … but I will answer your comment about “I wonder how people will react if they had to pay for emails unless you subscribed to a 10 dollar bundle”.
That is exactly what is happening but strangely enough people don’t seem to see it. If you have a data phone, you HAVE to be on a data feature (integrated in your main plan or added as a feature) to have emails/internet services. If you insist not to pay for a monthly data feature, the carrier will put you on a “pay-per-use” type of data feature which means “you don’t use it = you don’t pay monthly but if you use it = you pay huge (between $20 and $40 per MB).
Anyway, I think the main point is this … nobody is forcing people to be on a contract. You can very well not take a contract and still have a phone or take a small 1 year contract without renewing it at the end and still use your phone … the only difference is that you will have to purchase your phone at full retail price (no rebates) and you won’t get promotion pricing on a rate plan BUT you’ll be free to leave at any time without fees if you want to! Ain’t that great? YOU have the choice! All you have to do is decide between getting the advantages and being tied down or paying a bit more and be free … can’t have both but like I said it’s YOUR decision and nobody will force you. There is no point in playing the victim all the time. All you need to do is take a decision AND ASSUME IT
To Richard …
Please give details as to what you mean by “change to their U.S. Roaming fee” … but (I’m going by pure logic here) like I explained in another post, CDN carriers are legally bound and will abide by the rules of their contracts for service WITHIN Canada. Once again, if YOU DECIDE to use your phone while roaming in the U.S. you have to pay whatever the U.S. carrier is charging. Your carrier receives the bill from the U.S carrier and simply applies it to your invoice. If you don’t like it, leave your phone home and buy a cheap U.S pre-paid phone over there or use a Long Distance calling card with a landline phone (2c per minute).
Best way to answer your question though is to read the contract you signed when you bought your phone (IF you still have it, it will be explained somewhere in it) or call your carrier’s customer service and ask them. Asking anyone on the net will not garantee a true answer
The change I am refering to deals with the per minute rate that Telus is going to change for U.S. roaming calls, where in they are proposing a $1.95 per minute flat fee. I will get a copy of terms of service to review, but it was my understanding that this would be the same as changing the local per minute rate (which i thought would be grounds to leave a contract under the new code of conduct)
Richard,
Like I said, CDN carriers are legally bound and will abide by the rules of their contracts for service WITHIN Canada. Anything outside of canada is not affected by the law because you are using a network owned by a different company (U.S. carrier or others) and thus the CDN carrier cannot control what carriers in other countries are doing. Service outside of canada is not an obligation and is provided more as a “courtesy” than anything else. Before thinking of breaking off the contract, have you at least checked with other CDN carriers what are their roaming rates and if they will change it the same way?
Hope this help …
I see a lot of txt but nothing shocks me. Im surprised this many people didnt see it coming