Tuesday, June 24, 2008

Why Can't We Just Buy Phones Direct?


The ongoing debate about how Canadians pay too much for mobile phone data services, how we lack competition, and how we always get locked into long-term contracts, has begun to heat up again with the upcoming launch of the iPhone next month. A CBC News report just pointed out that, while customers of the 3G iPhone in Australia will be able to buy the phone outright and carriers like AT&T in the U.S. ask customers to sign-up for a two-year agreement, Canada's Rogers Wireless is requiring that you purchase a lengthy three-year plan if you want the highly coveted device.

From a business perspective, the reasons for this decision are obvious. Why not? There is currently no competition in the GSM arena in Canada, and, with the wireless spectrum that's currently underway, there just might be in the near future. We recently employed number portability in Canada, which lets a wireless customer take his number and port it to a new carrier, should he so desire. Of course, if you're locked into a contract when a more desirable carrier pops up, you're out of luck. You have to either wait for that contract to finish, or pay through the nose to cancel it early. Naturally, anyone I know who wants an iPhone is gritting their teeth at this news, and actually considering foregoing the device based solely on principle. Why should they have to lock in for three years, the longest term reported anywhere in the world thus far, if they want it?

What would make things so much easier would be to simply start selling mobile phones directly to consumers. Sure, their sale prices would no longer be subsidized by the wireless carriers, but customers would be 100% untethered, able to purchase whatever data plan and options best suit their needs from their desired wireless carrier. Contracts are contracts, and if they are still to be offered, than so be it. But carriers should not be able to essentially hold a mobile device ransom in order to tie a customer to their services for a set period of time. I can't think of any other media and entertainment offering that works in such a manner.

I've long talked about a day when we'd actually buy the SIM card itself outright, load it up with desired options and features, and slap it into any mobile phone we like. We're a long way from that sort of open source landscape, but it really would be the most ideal option for the customer. Not only would it have the potential to improve customer service on the provider side, but it would also make it much easier (and likely!) for more people to get involved with the latest and greatest mobile phone options; and even to purchase that brand-spanking new phone as a gift for a loved one.

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70 comments:

Rory said...

Oh do your research.

Business is never that good and evil. Rogers Sells every phone they have free of contracts.
They also offer 1,2, and 3 year contracts as well as month by month ones.

The best deals are on the three year contracts which is a no brainer.
You don't get something for nothing!! Give them more business and they give you better deal. PLUS Rogers has the best upgrade program in Canada. they offer you nearly 40% off the price of a new phone after one year.

The ONLY phone that needs to be purchased on a 3 year contract is the up coming iPhone.. and that is something that APPLE is requiring because they don't want a heap of unlocked phones going over to countries where the iPhone hasn't been released yet.

I agree that Rogers charges to much for Data.. fine we've established that, but we need to get over this Big Bad Corportate Wolf stereotype. Everyone in the world who has a job or a business strives to make the most money they can. It's called BUSINESS!

if the majority of the customers are happy then they are doing their job well. and the MAJORITY of people who buy sell phones use them to make calls text, and surf a bit, and maybe listen to some music.. and that they can get at ANY service provider.. even Virgin who offers NO CONTRACTS.

Fight for cheaper pricing.. yes great, I'm always up for a better deal. But get your facts straight and stop trying to turn these big companies into horror stories, they're are run by normal people trying to make the best for themselves and their families, just like you and me.

Marketnews - Christine Persaud said...

Hi Rory,

Thanks for your comment. I am definitely not trying to pit the corporations as being the "big bad wolves" but, in some cases, they are. As mentioned, the reasoning behind certain decisions is indeed made in the best interests of the business, and anyone can understand that. You are correct that including a contract with the iPhone might help deter "grey market" phones. But is three years, the maximum contract, really necessary? I would think that three years from now, they'll be another "hot" iPhone (or even other device) out there, and grey marketers would have forgotten all about the first-gen 3G iPhone.

My commentary about a future where phones would be sold independently of contracts isn't meant to be a blast at Rogers (or any carrier, for that matter), but rather a look toward what COULD be the scenario going forward. Just because we've been doing things one way for so long doesn't mean that there aren't other ways to look at the situation that might be beneficial to the customer while still remaining profitable to the carrier. Whether I buy the phone on its own or not, I still need to go to the carrier to sign up for a plan. Perhaps if the phones are purchased elsehwere, and therefore the plans can be picked up anywhere as well, this CAN lead to better pricing all around for everyone. THIS is my focus, not in pointing the big, bad finger at anyone.

I do appreciate your comments, Rory!

Anonymous said...

I 100% agree Rory, If you want your open and unlocked phone then suck it up and pay the extra cost. Rogers is doing us a favour by saying "We'll make it cheaper..just stay with us for three years". That's not a bad deal plus Rogers plans are not overly expensive. To use the phone you're going to need a plan from someone (bell, at&t, fido rogers) so what's the big deal about making a commitment. I am on Fido in Canada and I picked up an unlocked Blackberry Curve (because Fido does not carry them)for about $460 which was pretty decent. And now I am not tied to any one carrier. Good deal in my books.

Anonymous said...

near the end of the article, and idea is suggested that would allow users to slap features to their sim, purchase their sim out right and slap it to any compatible phone and enjoy wireless.

this comment is directed @ rory.

due to the high prices of wireless services in canada, there are a couple things we lack.

#1. go to any 3rd world country, infact i recommend countries such as India and Pakistan. with wireless markets growing at unprecedented levels, users are free to purchase a simcard for a few bucks. they then pre purchase any services they want to use and slap that card to any phone. and they're off. and because there's so much competition facilitated by their governments, prices for mobile usage is so low, that users when making international calls dial directly to anywhere in the world. WITHOUT having to worry and shed hair about how massive their next bill is going to be.

2. premium services such as data usage is NOW going to become affordable through rogers. Upon the launch of the iphone. countries in europe, south america, middle east and asia have had massive amounts of data services available at minimal prices. and they've had this for months if not years now.

running monopolies on wireless services or even oligopolies is in no way the best method to provide high paying clients and users their due services. That is why the canadian government has now reserved 40% of our airwaves for further licensing to new companies willing to partake in the wireless industry in canada.

we need more competition, and we need more providers. its the best solution for users (low competitive prices) and good for providers (forced induction of world class services)

having gone to other markets, i find canada's wireless industry laughable. in other countries average people can sometimes own up to 5 sim cards, where as canadians feel as if their giving time in destitiution under the word "contract" for their wireless services.

thank you

Anonymous said...

As a consumer you should always look after yourself. PERIOD

If you justify behavior as an accepted business practice then you are a fool.

I will never sign a 3 year agreement no matter how good the apple is.

Anonymous said...

@Rory:

Gee, do ya work for Rogers? Stop crying just because you work for a crappy company.

Andrew said...

Rory,

I don't know where you're doing YOUR research but nobody in the WORLD except Steve Jobs and Ted Rogers know that Apple required a three year contract. There are NO details about the iPhone in Canada that are official as of yet, so there's no way you could possibly know this. And there are unlocked phones in EVERY country in the world, they may have been more prevalent in Canada because we were screwed on the first round of iPhone in the world. In ONE year, there will be a 3rd generation iPhone so why would ANYONE want to lock in a three year contract with a phone that's going to be obsolete in one?

The only reason Rogers is asking for a three year contract is because there's new competition on the market after the spectrum auction dust settles, and if Rogers doesn't do something to maintain customers, they're going to lose them all because Rogers is a terrible company.

These are business models that are looking out for the business, not the consumer. When you have a oligopoly on the GSM market in your country, there should be a little give for the consumer.

EVERYONE BOYCOTT THE ROGERS RELEASE! THREE YEAR CONTRACTS ARE JUST A WAY TO GET YOU TO SIGN YOUR LIFE AWAY!

Evan said...

The biggest thing the CRTC could do is introduce some transparency legislation around all these contracts and terms etc. so that consumers could make informed decisions.
Would purchasing an iPhone without a contract (at a higher retail price) be offset by a lower retail price, but with a contracted escape penalty added on? I guess it all depends on how much you have to shell out to get the subsidized phone in the first place. Rogers is pretty good about allowing hardware upgrades within an existing contract for a moderate fee and (of course) extending the contract. But you have to call them and they often give conflicting information and make it more confusing than it needs to be.
I suspect that those of you wanting to upgrade to a newer iPhone when it appears will be able to do so within your contract - but you'll pay for it.
I agree: do away with mandatory contracts. Contracts should provide some incentive to the consumer such as lower per minute rates or some such. Basing it solely on initial hardware costs is so '90's!

Jim V said...

That's the thing Rory I can't say I've met a happy Cellphone user who hasn't complained about the phone or the price involved can you say Corporate Spin trying to humanize Rogers what it boils down to is they're (the company you work for) is squeezing as much out of consumers as possible, I guess cellphone users (sheep) enjoy paying more than their share and then some. One of the main reasons why I refuse to own a mobile phone is the high price involved, my coworker has a 3 year plan and she regularly pays in excess of $120 per month for use because of tacked on charges and then the unthinkable happened it broke leaving her to deal with the countless CSR's, she's currently under going cellphone withdrawl.
As for paying $460 for a phone that has the equivalent value of less than $50 in parts and labour sounds plain idiotic thank you for subsidizing the rest of the users a good deal for them.
The idea of swapping out the simms sounds great even to a non user like myself but as usual we allow big business free reign and as Christine mentioned we won't see it for a while.

Anonymous said...

Only in Canada do people actually defend Rogers and wireless monopoly in place.
Try going to another developed country and you'll see how 3rd world our wireless industry is.

Anonymous said...

Hopefully the market will tell Rogers that their data rates are too high and contract lengths too long. I was super excited about being able to buy a legal iPhone in Canada, but when I heard about the 3 year plans I decided to pass. I'm also very concerned that Rogers has yet to publish data rates less than 20 days away from the iPhones's release, especially knowing how much consumer unrest their is over their data plans.

I have a Blackberry that my work pays for, so I am personally immune to their data rates. But when I had my own data capable phone, I was raped like the rest of their customers and I have never forgotten that. When it comes time to buy a new personal phone, it likely won't be from Rogers unless they offer UNLIMITED data (like mosy third world carriers) and prices on par with their competitors.

Eventually another GSM operator will appear in Canada and I will then be able to buy a non-Rogers iPhone. But int he meantime, if enough people shun their product, maybe we will see a reduction in the contract length and data rates.

Anonymous said...

Rogers service is garbage and if you have any issues with the crap they sell you they give you an option to buy more garbage from them. I used to sell this junk for them, anyone who signs up with them is making a mistake

Rory said...

No I don't work for them, I just also work for a successful company and I'm sick of people whining cause they aren't successful so Im suppose to do worse to make them feel better.

I apologize though Christine, I re-read my original comment, and although it said what I wanted to say I didn't mean for it to sound so horribly hostile.

But again 3 years seems long but since they are the only company offering decent service on the phones people want, it really isn't that big a deal anyways. You are still gonna need a phone in 3 years. Plus as you seemed to miss THEY HAVE THE BEST upgrade program in Canada. and if they offer a better price plan you can take it at anytime.


To the second anonymous, you're deffinately right, alot of other countries have cheaper pricing at different plan terms, but you can't compare Canada's market to other countries. Every country and market is different. Take India.. how many more millions of people are their in India? not to mention how many more providers.. Plus in a poverty stricken country, for a company to make any profit the margins need to be lower. The average Canadian can afford 30 - 40 a month. No they can't all afford $80 for an iphone or blackberry but remember, these are not standard cellphones.. they are high end all in one devices that require extra service. Most people don't NEED these in any way shape or form.. most people already have an MP3 player, and the internet. It is a toy, if you really want it be willing to pay for it. It's like staying in a hotel. Most people only need a &70 room with one bed, but if you want the luxery amazon suite then be willing to pay for it!

Again, for those who cry Data prices are to high I 100% agree, Rogers needs to get with the times in that department, and truth be told they are making the changes. The new data prices ($30 for 300MB up to $100 for 6GB) aren't the best in the world, but they are not to shabby and it can only get better.

No contracts at a low low monthly price would be ideal for everyone who wants a phone, but is just not realistic from a business perspective. As soon as the next company offers a plan at $2 less are your clients are gone.. stability is lost, and prices all go UP.

The real issue is that most people are just never happy. Rogers or any other company can offer everything they have with a free iPhone for $20 a month.. give it a year for people to get use to it, and they still aren't happy.. they need it for $15!!

It's a nice thought but it just isn't realistic.

Anonymous said...

two years ago I purchased a mobile phone in the UK for 20 pounds (about $40) with this phone it was a pay as you go service and it included 10 pounds airtime so the actual cost of the phone to me was 10 pounds ($20. You can't get anyphone in this country that cheap. BTW Virgin only wanted me to use the phone at least once a year to keep it active. After my first holiday in the UK there was some money left in the account and I figured like here it would be gone the next time I went to use the phone a year later. NOPE Virgin left my account active with about 6 pounds left in it.

Jango said...

Rory-

Apple is not requiring Rogers (or any cell phone provider)to sell the iPhone 3G with a minimum 3 year contract.

Apple has never been concerned about unlocked iPhones because the only way to purchase an iPhone without a contract was from Apple. They were getting paid either way.

Purchasing an iPhone from an AT&T Store required immediate sign up and activation right in the store. AT&T would not sell an iPhone without a contract which makes total sense. They make their money from monthly bills.

With the iPhone 3G, this is the business model we will be seeing. There is a very good chance that purchasing an iPhone 3G without a contract will be impossible.

Apple will be releasing the iPhone 3G in every country in the world soon, so your theory about unlocked phones going to other countries is incorrect.

Jango

Djoe2 On YouTube said...

Virgin is probably the only carrier (in Canada at least), thats beating all the cellphone competition. Lots of the features are included and they don't believe in contracts.

I'd say although Shaw Cable does not have a CellPhone service... Yet!

Virgin and Shaw Cable would be very competitive in the Cell Market.

Anonymous said...

I used to live in a third world country and when I came to Canada I was amazed by how little options you have in wireless services. Even in my home country where there are only three providers you can buy phoenes, SIM cards and thousands of different plans. And the price? Close to 80% cheaper than Canada. What I have found here is that companies charge so much because customers pay...

Anonymous said...

What is bad about Rogers? They are the only GSM carrier in Canada, operate in the 850 / 1900 MHz band (850 good for in building penetration) whereas Bell and Telus are use CDMA. I'd rather pay a premium to use the latest and greatest technology than be stuck with a phone that doesn't even have a SIM card! Remember, Canada is a very large country, we have a massive geographic area to cover yet have just around 33 million people. These other countries that you speak of are much smaller and have a much higher subscriber ratio thus costs can be cheaper.

Anonymous said...

i'm not going to lie to you guys, i used to sell rogers. that being said i haven't for a few years and as such, know nothing about the iphone release.

what i do know is that rory was mostly correct about how rogers works. rogers gives the best deals on phones when they are activated on a 3 year term because that means that you'll be with them for awhile... which is good business sense. however, they do offer 1 and 2 year contracts as well which give less of a subsidy on your handset of choice. they give some and take some.

personally i knew that i was going to stay with whichever carrier i went with for at least 4 years (because of school), so it didn't make sense for me to pay more for my hardware when i knew that i would be with them for at least three years anyways. but rogers does give you the choice between 1 2 and 3 year contracts, and 3 years made sense for me. if it doesn't make sense for you to be in a three year contract then by all means don't sign up!

as for the SIM card switching complaint, what it comes down to is lack of competition, which most of you have identified. to clear something up, if you have a rogers phone and you buy another rogers phone or an unlocked GSM phone off ebay or wherever, you CAN just switch the SIM between them. you're still getting service from rogers because it's a rogers SIM (and as you've all pointed out there is no other GSM provider in Canada), but you can use any GSM phone you like as long as it's unlocked or a rogers phone to begin with.

now after all of this i want to point out that rogers IS taking advantage of the market and that they probably aren't the BEST cellular provider out there. however, all of you out there that aren't coming from saskatchewan, rejoice. because here, the alternative is much much worse.

Vlad The Inhaler said...

Rogers and Apple, Two proprietary parasitic companies I detest. I rode out my contract with Rogers and I am just waiting for Shaw to get spooled up and running and then it'll be GOODBYE ROGERS AND KISS MY ENTIRE ASS.

Anonymous said...

I just can't understand one thing about Canada, if Canada stands for free market economy, why are they so terrified of competetion from outside and why do they go to any length to shut out competetion from outside the borders??

Anonymous said...

Does anyone has a comparison of prices among developed countries? I feel we, in Canada, are paying the highest prices for cellphone market. Four years back I spent six months in Hong Kong, which is as expensive a place to live as Toronto. For Canadian equivalent of under $20.00, I got a free phone, no contract, and about 400 minutes of air time. Even today you can get about 2500 minutes for less than what we pay for a land line. Many companies compete in this business. How come we are unable to provide a competitive market for better prices and, where business will have to work harder to win customer!!!

Anonymous said...

All those waiting for Shaw....Shaw is in bed with Rogers. My parents signed up for Rogers phone service and got a discount on their Shaw cable. No way to do that without some relationship. As my Dad explained, but I am unclear as to the extent, Rogers owns at least a percentage of Shaw. So Shaw isn't going to undercut Rogers by any great extent. I suspect that any future, potential Shaw network will travel over Rogers infrastructure.
We don't have enough competition in Canada -- all the players are hiding behind other names (Rogers and Fido are the same for all intents and purposes as well). I haven't determined who Koodoo is owned by yet, but I imagine one of the big players is tied in somewhere.
We won't get cheaper rates and more flexible contracts until there are more players.

Anonymous said...

I do know that Rogers automatically renews your contract if you upgrade a phone, or change your plan for any reason. Meaning, if you took out a 3 year contract and had six months remaining, but needed to upgrade your phone because you lost, broke or just simply wanted a new phone, they will automatically restart your contract from scratch. Not sure about the other companies out there, but this does not qualify as a great upgrade plan from Rogers.

JeffryD said...

First off, you CAN'T buy a phone from Rogers and then use another network, say in the US.
You can buy a Phone in the US or in Canada for that matter - unlocked - and try to get Rogers to sign you up for a plan. You'll have to jump hoops, a lot, think 24/7/3days.
Rory, I think your focus on "complaining" is like the bestseller who hates competition. So be it, but at least compare apples to apples - Rogers will not sell you an Unlocked Phone for full price. For even less you can buy an unlocked one from Tiger Direct. Buyer beware I gave up Rogers after 4 years, I have friends who work there and they have all applauded me for the same.

Some will follow blindly, some of the blind will see with sound.

Marketnews - Christine Persaud said...

Re Koodo: they are owned by Telus. Please see previous blog entry at http://marketnewsblog.blogspot.com/2008/04/koodo-is-new-mentos.html

Re comparison pricing: there have been tons of anecdotal studies online that have compared Canada with other developed countries. The gist is that, when it comes to rates for standard phone calling and text, we're pretty much in line with everyone else. It's when we factor in high data usage that Canadians pay much more. True, many consumers never use their cell phone for data purposes, and just want something they can use to make and receive phone calls and send the odd text message. But arguably more and more consumers WILL be utilizing on-the-go data, especially as the generation-Y'ers get older, get jobs, and become the working public. So it's in this area that we need to lower rates significantly.

Anonymous said...

You could just goto Pacific Mall, they've had iPhones that are unlocked and cheaper since the first revision was released. I don't know why people think they're limited to Rogers in getting cellular devices. Even if you don't buy the iPhone, there are hundreds of phones there that are unlocked from asia that are far more advanced than the crap phones we have here.

Rory said...

Wow I peaved alot of people off!!

I dunno guys, keep fighting for what you believe in, at the end of the day it's the consumer who keeps any market going. Just make sure you are fighting out of integrety and the best interests of everyone.. not out of cheapness.

Remember if Rogers cuts their prices they cut their profit which means they cut most other things including jobs, bonuses, salaries, etc.. then its everyday hardworking people who suffer, which is something much bigger to think about then an extra 10 bucks out of your pocket.. im sure prices will come down.. but gradually. Canada's market is nowhere near as fast paced as the US, India, the UK.. well most other countries really. Maybe it's becuase we are not as impulsive. We think about what we buy first.. we think about the future of those purchases like most of the people commenting on this blog are. But again Canada is it's own market its really not logical to compare it to others.

Rogers isn't a company full of warlords and gouls. They are all people just like you and me. If you wanna make money then so do they. I want a big house you want a big car, they want a big office, So who's right?

I'm gonna buy an iPhone, I enjoy rogers thus far (minus their Phone reps) I'm going to compliain a bit about my bill every month but realistically its not actually that bad. You all keep screaming and shouting and maybe you'll save me $5 bucks next month.

Anonymous said...

It's really pretty simple... Apple isn't requiring 3G iPhones to be sold on contract, that's a choice the carriers are making. Rogers is requiring the longest contracts of any carrier in the world (and with NO option to pay a higher price upfront with a shorter contract). In so doing, they make it very very hard to justify getting one on the eve of new carriers starting up in Canada. I'm on fido at the moment and actually pretty happy with the price I'm paying and the service I'm getting. And that's the thing: if the service is good and the price is right, I don't have a huge beef with being locked in. Unfortunately, all Canadian carriers have a long history of crap service and extortionist prices (the "big country" argument doesn't hold water. 95% of the country's land is uninhabited and needs no signal). We pay made-up taxes that go right into the carrier's pocket, and the access fees and call-display voicemail charges that add 20-25 bucks to each month's bill have kept me happily on prepaid where I get plenty of minutes and no bullshit charges for $20 a month. I'll pay 4 times that for an iPhone plan that includes that following: 250 anytime minutes, UNLIMITED (I repeat: UNLIMITED) data, voicemail, call display, and all taxes and fees. I'll even sign up for 3 years on that deal. But I don't see that happening, so you won't see me with an iPhone.

Anonymous said...

The device itself is not the problem, real problem is the super expensive downloaded megabyte of data resulting from Rogers GSM monopoly, and the fact that they would like to lock people to subscribe to the most expensive data plans on the planet for three years. Just came from a "third world" country, I was shocked how cheap and advanced wireless services and communications they have over there, they also have four GSM providers.

Anonymous said...

Or how about this?!? Stop thinking an "iphone" is actually a phone. Get a standard, cheap-ass, cell phone with no contract and head out to a wireless coffee shop with your laptop. Case solved.

I hate these stupid 20 in 1 gadgets that are nothing more than an extension to a penis. Nobody cares about you and how you *think* you look with ones of these.

Let me give you a hint. You look like a challenged fanboy who needs gear to look important.

Anonymous said...

Sorry but I travel constantly between Europe and Canada and have always unlocked my phones so I can use them where I want by dropping in a SIM card.

In Europe, the carriers are mandated by law to unlock your phone at you request after an initial period of 30 or 60 days ( I don't remember exactly).

Why can't we have this in Canada?

The laws and policies very heavily favour the Corporations and not the consumer in Canada, they are not even a little bit fair.

Steve said...

Rogers is absolutely terrible. I bought a phone through them and was promised it would work in my area. It did not. They would not let me return it nor would they cancel the 3 year contract.

Be weary of anything Rogers.

Google is coming out with an opensource phone soon. I've heard rumors it may be free to use but supported by ads. Sorta like Skype but mobile. Can't wait for that and the death of Rogers.

jwsteele said...

I hope this wasn't already said a few times (so many posts) but Rogers is not giving a choice of paying a higher price and not having a 3 year contract. The rumour is that they will REQUIRE a 3 year contract for the iPhone. Now that is not fair.

Give different phone prices for a different lengths of contracts, that I can understand. I 3 year only or no iphone is simply poor business.

Anonymous said...

LOL ROGERS FOR TEH LOSS

rogers sucks, etc.

Anonymous said...

Just so everyone knows, AT&T and Rogers will be selling the iphone with contracts, minimum 2yrs for AT&T and 3yrs for Rogers. The contract lengths are not the issue with Rogers at least since you can upgrade after 1 yr. The issue is that a DATA plan will be REQUIRED, along with a a qualifying voice plan which will be minimum 39.99. Rogers will have a special data plan for the iphone for 30$ unlimited data which is great. But a voice plan at a minimum of 39.99? First of all, you should be able to have any voice plan you want and secondly I don't understand why data is going to be required. The iphone has WI-FI, which is sufficient enough for most users. I'll admit $30 for data isn't bad, but when u combine it with a minimum 39.99 voice plan, thats a very steep price to pay each month, especially for students whom have many other expenses.

Vishal Malik said...

Hi Rory,

Please don't disregard this as a hostile message towards your comments.

I do not want cheap stuff for myself. I just want to debate with you on the state of the wireless industry in Canada because your opinion on the subject of "long-term contracts" is contradictory to mine. I am not a customer. I am just a student who is very excited about wireless industry.

I have a few points:

1) If Rogers is enforcing a 3-year contract because Apple does not want grey-market iPhones, then why is Apple allowing the sale of contract-free iPhones in Australia?

2) I do not mind contracts per-se. What I do mind is enforced contracts. Today, a Rogers rep told me that the only monthly plan you can enroll in without a contract is a $25/month 250 anytime minutes plan. He also told me that you have to sign up to a 3-year contract in order to get any of the unlimited incoming calls plans. Rory, do you not find that a little unreasonable? Secondly, Bell and Telus seem to offer all their plans without a contract if you are willing to pay the full cost of the mobile device. Is it so unreasonable if it leads one to suspect that Rogers might be abusing its GSM monopoly?

3) Why would a wireless company want to make their customers sign a contract, if not for selling them a subsidized handset?

Please keep in mind that I don't know everything. If I'm missing some facts, please let me know.

I look forward to your reply.



Vishal Malik

Anonymous said...

I just returned from 1 year in Italy and have been shopping for a mobile plan. In Italy, I had pay as you go for 12 euro cents a minute and 1/2 gigabyte of internet for 8 euros a month. All the phones are unlocked by law. Even the subsidized phones are unlocked, they just use a contract to keep you on the plan for the minimum time. The plans over here suck.

Anonymous said...

you need a united states address, then hook up with verizon, friends were paying $600 to $900 per month, now pay less then $600 for 2 cells, no roamong charges, we are getting screwed.

Anonymous said...

Canada is WAY behind in the cellular phone industry due to lack of customer-friendly services. . In most south-east Asian countries, every single person users a cellphone as they are easily available, with no contracts and with a choice to pick the service provider and plan of your choice. It is really as simple as buying SIM card and using the phone. Competition in the wireless industry is the only way to resolve this in Canada...

Anonymous said...

I think this has been said before, but I'll say it again, anyone who thinks our phone plans are good, or our technology is advanced, should go to an asian country.

If your in rural china and need a phone, just go buy a sim card (assuming you have an unlocked phone, otherwise buy a cheap phone too) for five bucks and that should come with enough minutes for most things you need. If you need more minutes, just buy a phone card and add more.

My friend always makes fun of us here in Canada where in our 'advanced' society we always pay more and get less.

earl said...

The problem is the quassy socialist environment in Canada were the average Canadian must subisidize everyone else while corporations are allowed to do what they want. Canada is not a free market and never will be. We will never be allowed to enjoy the fruits or our labour. The government will always share it with everyone else and give a big portion to Canadian corps that provide lucartive jobs for them in the future.

earl said...

The problem is the quassy socialist environment in Canada were the average Canadian must subisidize everyone else while corporations are allowed to do what they want. Canada is not a free market and never will be. We will never be allowed to enjoy the fruits or our labour. The government will always share it with everyone else and give a big portion to Canadian corps that provide lucartive jobs for them in the future.

earl said...

The problem is the quassy socialist environment in Canada were the average Canadian must subisidize everyone else while corporations are allowed to do what they want. Canada is not a free market and never will be. We will never be allowed to enjoy the fruits or our labour. The government will always share it with everyone else and give a big portion to Canadian corps that provide lucartive jobs for them in the future.

Anonymous said...

i went to india last year, with the new phone i got from rogers at 149 with the three year contract and found my phone is out dated there and was selling at same price without contract. i don't know how they make it cheaper with the 3 year contract, if all of us stop buying contract companies will begin selling it directly with reasonable rate.
also an average plan cost $45 a month, which is double than asian contries even though their market just start growing.
i welcome government's move to make it more competitive, but unfortunately none of the bigger player around the world have taken interest in canadian market.

Anonymous said...

Guess we are in the country of beggars can't be choosers..
Roger's suck big time..
Rory is right in his stance on why can't a consumer buy the phone outright.. and chose the plan he needs....
There are a few folks like Rory who think the other way..

rfie said...

I agree that the 3 years is too long. I've never had a phone last that long. I'ver gone through 5 phones in the last 6 years. I purchased my latest phone without a contract because I was always upgrading and perpetually in a state of being in a new 3 year contract. It's not like I'm a cell phone junkie who always has to have the latest and greatest either. These things just do not last that long.

My hope is that a couple of phones from now I will finally be able to go to the market and look for the best deal. If we all keep ourselves locked in then the carriers have no reason to change.

Kirby said...

When the iPhone launches on July 11 there are going to be a lot of people selling there first gen iPhones. Pick up one of those phones cheap and unlock it. No need for a contract and do with it as you please. Sign a contract or do not, it up to you.

Anonymous said...

Connections and exclusivity make good money!

Apple benefits buy selling lots of phones through a single Canadian channel and Rogers gets to sell more contacts, because only they have the phone.

By Apple making it rare, more people will desire it.

Besides the fact that it's a frigg'n sweet phone.

See it worked on me too...

Andre said...

The problem here is many fold.

One, there is not enough regulation in the wireless industry in Canada. Telecommunications lobbyists hold much more sway with politicians and lawmakers than the average citizen does. It is their interests and ideas that are protected and promoted by the powers that be.

Two, Rogers is the only carrier in Canada offering GSM technology at present. Until someone else puts forth the capital required to create their own network, the best that can happen is someone can start up a company, lease from Rogers the technology that makes GSM wireless connection possible (essentially access to their wireless network) and when said startup becomes too successful (a la Fido with their cityplans from days of old) they will be bought out and all packages that made the cometition better will be phased out.

The bottom line here is Rogers (and pretty well any monopolistic corporation for that matter) doesn't care about it's customers. They operate on a business model that shrewdly calculates; how much customers can afford to pay beyond what it is they can afford to pay, how little service they will accept receiving while still maintaining brand loyalty and throwing as much fine print in as possible to ensure that they come out on top time and time again.

I spent years working for Rogers in a variety of fields. They know you'll wait twenty minutes to talk to someone (they have enough staff to have calls answered almost immediately), they don't care if you're leaving the country because you're on a Red Cross assignment or have been sent abroad with the Military (you will pay that cancellation fee unless of course you die), they know the approximate shelf lives of the phones they sell and get you stuck in a loop of perpetual renewal as your phone almost never lasts as long as your contract. You are trapped, you will not win and they will come after you for their money.

Anonymous said...

i have city fido for number of years here in toronto.
pay around 55 bucks a month and have unlimited calling day in day out. no counting minutes no bs. i got it before rogers bought out the fido company. first thing he did was cancell this plan and introduced variety of crapola long term contracts which give you nothing but screw you if you are a using the phone a lot like i do. lucky for me they cant change the contract i had with fido for unlimited usage for as long as i dont quit the company. and for 55 bucks a month for thousands of minutes i use a month is a deal of a century.
screw you rogers ill use my cellphone till you drop dead or go bancrupt you frikin moron...i hate this company with passion bastard changed the name of a toronto landmark after he bought it from skydom to rogers center..narcystic pig

Darrell said...

I've been in countries where phones can be purchased at a 7-11 and other convenience stores with NO contracts as simply as you would buy a snack... and are better then most offered at Rogers.

North America is so far behind in the mobile phone experience that it is just ridiculous. Yes the companies have a monopoly but we as the consumers gave it to them and foolishly still support them. They suck, we suck.

Anonymous said...

Turkey has the best cell phone system. There is no contracts, no long distance charges. 3 big companies competing with one another, giving customers great deals all the time. Their system is much more advanced than ours, and we call ourselves a first world nation.

The Mound of Sound said...

I wanted a BlackBerry for my all-terrain BMW motorcycle. I like to tour and I enjoy riding in Central America. I needed a bluetooth phone to pair with my Garmin Zumo 550 GPS and my Cardo Scala-Rider Q2 headset.

I don't bother with a cellphone except when I'm on the bike. Then I consider it something of a safety feature. So, beyond the three or four months when I'm touring I don't use the thing. That meant finding a monthly plan.

I checked Rogers prices for non-plan BlackBerrys and they were ridiculous. I was able to pick up one that had every feature I needed (an unlocked 8700g) on Ebay for $130.

When it arrived I went to the Rogers booth at the mall and they slapped in a SIM card, signed me up to a monthly plan and I'm on my way. A $130 phone, a cancellable $25 a month plan and that's it.

Now, when I'm out of Canada, it's just a matter of buying an inexpensive, loaded SIM, a local calling card and I can stay in touch with Canada without getting my throat cut on the bill.

If you've ever had to use an "internet cafe" in a little town with only dirt roads, being able to send e-mails on a Blackberry is a huge plus.

So, if you want the latest and greatest and right bloody now, you've made yourself easy prey for the cellular provider. Wait a little while and you can probably pick up what you want online for a fraction of Rogers' price.

Anonymous said...

I don't know how anyone could be so simpleminded..

WHY can't we just buy phones direct?
BECAUSE it makes no sense for a business to offer a single-purchase, when years-long-inescapable-subscription exists.

There is NO business case for replacing chained "subscribers" with self-determining "customers", who can leave at any time.

No business case for Apple
( they get money from the carriers )
No business case for the carriers
( who are dependent on long-term lock-in of as many as possible )
No "business case" for you, because you're the controlled in the equation.

The phones are just the means of gaining that control over the customers, is all, so they need compete for the most enticing phones, in order to control the most/most-subsidizing customers.

There's another factor, too:

Remember when you were last in a corporate meeting, considering controlling your stupid customers, or letting 'em control you...

Which did you decide to enforce?

Business, survival, or authority?
Which was the motivation in that meeting's decision?

All 3?

Anonymous said...

I agree with Andrew! I think Rory is smoking something bad or he works for one of the "Big Bad Wolves"!!!

Anonymous said...

Couple years back when I first landed in this country - I was amazed seeing the monopoly of 2 phone companies - rogers(sucker) & bell(bully) - both ripping the canadians beyond you can imagine! You should go just south of the border in USA and see how the "customers benefit with COMPETITION" of several phone companies, and internet service providers.

People, I have NO DOUBT in my mind in saying that, this country's law makers are having their share with the corporations in RIPPING THE COMMON MAN!

Stop this 6.95 - service access fee! This is plain - SUCKING THE PEOPLES BLOOD!!

Ali in toronto!

Anonymous said...

In a perfect worl.... wait, that's not even a perfect world.

I do see some of your point. I have wondered for a long time about why we don't just buy phones outright. I mean, the cheaper models will still be at least $100 but will still be locked to a carrier. Even if you unlock the device, this unlocking may even be illegal one day (I unlock daily, hard for me to say this), so less people will be ready, willing or able to do so; so the idea of freely switching carriers is moot.

Then there is the myth that carriers subsidize phone prices in exchange for contract terms. The truth is, nobody knows how much Rogers is paying for each device (except the iPhone). Rogers then inflates the prices of the phones to their ideal selling price, then subsidizes that price; so as to assume that consumers cannot buy devices elsewhere. Another myth, because they can buy them from indirect and grey-market suppliers as well as directly from local market suppliers like The Sony Store.

Rogers (could talk about Fido, but it's the same company) does charge alot for their services, but they have every right (again, from an unlockers point of view, difficult to admit) to charge as much as they see fit. I think the physical capabilities of the HSDPA network can support 20GB downstream/month per user and still function (or peak).

I do believe, however, that a 3yr term is outrageous. I do not believe, however, that many people who actually desire to buy the iPhone will pass solely because of the term agreements. Most people will cave because of the features of the device, the sex appeal, and mostly because they will be using a [cell] phone for the next three years anyways. If a new GSM/3G/HSDPA/HSUPA device is released in the next three years, what's to stop that consumer from acquiring the device anyways; ignorance?

Next, I don't believe that unlocking itself is a major obstacle for Apple or Rogers. Unlocking will happen with or without a 3 year term. The term is going to be required because in this case the PROVIDER (Rogers) IS ACTUALLY FOOTING PART OF THE HARDWARE COST INSTEAD OF INFLATING AND FAKE-FOOTING as in the past (as per above). The last iPhone deal with Cingular/AT&T was flawed in that consumers could buy the phone from apple without activating in store on the Cingular plan. With the new scheme, consumers will have to sign up on the term in store. This alone should limit grey-market leakage and unlocking.

I hope that helps.

Anonymous said...

Rogers is a contract ripoff!

I was told when signing a Rogers contract that my cell phone would work in the town of Delisle SK, Well it never did. They never honored their side of the contract, but made me pay for their side, plus interest, even though I got no service.

Dont sign a 3 year deal with Rogers...wait and find a better cell phone carrier!

Anonymous said...

Rogers: An activation fee. A system access fee. Paying for incoming calls. And most importantly, most of the plans are available on 3 year contracts only (unlimited incoming calls and my5). No ability to put your plan on hold if you travel. If your phone breaks or gets stolen before a year went by since your last activation, they will not allow you to buy another phone at a reduced rate (unless it's a refurbished piece of crap which you have to wait 2 weeks for to reach you by mail).

As for internet, they shape traffic, block ports, and have a download cap. TV: I bought an ear rabbit antenna and receive about half of their basic cable for free, which in my book means their basic cable package is twice as expensive as it should be. Their home phone service: many of the disadvantages of VOIP (bad quality, doesn't work if there's a power outage) at twice the price.

Need I say more?

mr.steevo said...

I can't be bothered with a 3 year contract. Sorry Apple, you lost a sale.

Anonymous said...

I'm sorry but 3rd world countries have surpassed us in telcom services. I was recently in Bahrain, a small country in the middle east, and this tiny island has only 2 telcom carriers. I could not believe that my monthly line rental charge on my phone was $6. My bill maxed at about $30 a month. This might not seem surprising but consider that I text and call back to family in Canada and the UK all the time and the picture becomes clear. Rogers is a way over pricing if a small country with only 2 carriers can beat it out. Shame on you Rogers.

Anonymous said...

Globally, Canada is 75th in mobile phone adoption right behind El Salvador and Kazakhstan, according to the ITTU.

Every time I walk *past* a cell phone store in canada I'll look in the display case for dinosaur bones.

Buy your phones on e-bay or elsewhere, *unlocked* and stay out of "cheap" contracts... don't let Ted Rogers take you to the grave with him! ;)

webmaster said...

When you purchase the phone without a contract from Rogers, it is still SIM locked so you'll need to shell out the $25 or whatever to remove that lock.

As for buying phones direct, we are able to do so already, although most dealers will persuade you to sign those contracts. There are a number of cell dealers that will sell them, especially hard to find ones from Asia but of course, they are not cheap. Or, get them from overseas and bring them back.

I do hope that there will be more competition in Canada, especially with regards to GSM. CDMA in Canada is just as good as locking yourself in since neither Telus nor Bell will allow you to use the other carrier's phone on their network although it's technically possible. I would have switched a long time ago if CDMA weren't so restrictive.

Anonymous said...

I read through some of the comments and here is what I think.

First, if a company or corporation or whoever it is does not offer business terms you can agree to, seek alternatives or do not do business.

Second, unlocked IPhones will be available on ebay, the question is do you want to do that?

Does that make you a hostage?

To me the question will be no, if you do not want to support this policy you can boycott the release of the iphone.

Is the "RIGHT" to own an iphone truly a "RIGHT"? No it is a leisure, an extra, a new gadget that came out, in other words completely unnecessary.

Is it fair that telecom prices are less expensive in Europe and the U.S.A?

Once again, I think yes. When you have 300+ million people inhabiting an area of a little less than 10 mil square km you have a lot more business opportunities in a much smaller restricted, denser area than you do in Canada.

Does that mean fiercer competition and lower prices, absolutely. Supply and demand, increase demand and supply will increase and decrease prices will increasing competition.

Regardless, I am a big supporter of free enterprise and fully agree to the right of a company, especially when alternatives exist, to establish pricing in a business environment.

I won't buy an I Phone as due to the high demand and limited supply I will definitely be paying the price.

I fully disagree with your article as a consumer I have the RIGHT to shop elsewhere and will do, until I can find good terms to do business elsewhere.

Regards,

Anonymous said...

Telus phones do work on the Bell network where Telus doesn't have coverage. Telus me told that themselves.

You can buy an iPhone in the US without a contract and activate it on Rogers if that's what you want. It's no big deal at all.

Personally I like Telus. I have dealt with both Bell and Rogers for cell service and have been disappointed.

I bought an HTC P4000 pocket PC which does way more than the iPhone and got an unlimited data plan with Telus. Yes we do have unlimited plans in Canada, only from Telus.

In my opinion the only way to have a data capable phone is with an unlimited plan. Nothing else makes sense to me.

On the voice side Telus called me and told me that 75% of my calls were incoming and recommended a plan with unlimited local incoming calls. I never got service like that from the other guys.

In fact they called me shrtly after I activated the P4000 to see if I was happy with it and if I was having any problems. I didn't even buy it from them.

I think public pressure will force all the carriers to be more competitive eventually. I hate the way things like this are in Canada. I don't know why we get screwed in so many ways.

Cars are another example. When the dollar stayed up around par with the US dollar many people started buying cars from the US. What did the Canadian companies do? They sent out scare tactics through the media about incompatibilities with Canadian standards, etc., etc. to try to scare people off from buying cars in the US.

They were buying time to get their schemes in place. Then they started advertising the cars that they got from the US, offering them at "discounted" prices. Give me a break.

Enough said.

ratracerunner said...

Most people here miss the big picture and that is;

There's a reason why in a place like Italy and some other advanced European countries the wireless companies by law can not LOCK their phones. In those countries these companies compete ONLY based on their PLANS. Here in Canada, wireless companies, up until recently, would not even allow people to keep their phone number.

I'd say these companies should sell their mobile handsets UNLOCKED and then we'll see who could offer the best plans and contracts - can you picture a scenario where you wanted to buy an Apple laptop and had to sign a 3 year contract with say Rogers and only Rogers? why should buying a mobile phone be any different?

All that, of course, will depend on whether there will be another GSM provider besides ROGERS - as you probably know, phones from Bell and Telus don't even have SIM cards and can not be used on any other network but theirs - Fido doesn't count, it was allowed to be swallowed by big bad Rogers, shame. Let's see if CRTC will act on our behalf this time, do the right thing and save us from slavery.

ratracerunner said...

Most people here miss the big picture and that is;

There's a reason why in a place like Italy and some other advanced European countries the wireless companies by law can not LOCK their phones. In those countries these companies compete ONLY based on their PLANS. Here in Canada, wireless companies, up until recently, would not even allow people to keep their phone number.

I'd say these companies should sell their mobile handsets UNLOCKED and then we'll see who could offer the best plans and contracts - can you picture a scenario where you wanted to buy an Apple laptop and had to sign a 3 year contract with say Rogers and only Rogers? why should buying a mobile phone be any different?

All that, of course, will depend on whether there will be another GSM provider besides ROGERS - as you probably know, phones from Bell and Telus don't even have SIM cards and can not be used on any other network but theirs - Fido doesn't count, it was allowed to be swallowed by big bad Rogers, shame. Let's see if CRTC will act on our behalf this time, do the right thing and save us from slavery.

Anonymous said...

Canada has one of the world's largest geographical areas to cover with wireless services and yet we also have a wireless user base slightly smaller than that of the state of California.

When will consumers understand that wireless carriers in Canada cannot provide cheap airtime and inexpensive hardware the way other carriers around the world can.

Wireless users want to pay as little as possible yet they expect the same level of services and rates as those provided in countries with three times our user base and 30% of our land mass. The revenue simply isn't there to provide discounted airtime rates in addition to other consumer needs such as 24/7 client support and expansive wireless coverage.

You really can't have your cake and eat it. Its unfortunate that Canadians have to pay more for their airtime and that we don't always get first access to the best handsets but if you examine the facts its pretty clear why.

Our wireless market simply cannot support the types of rates, hardware and purchase options available in other parts of the world.

TBurke said...

What's next?
Rogers and Bell, in collusion with CE manufacturers, decide that the only way you can get a TV is if you sign up for 3 years of cable or satellite.