Fri, 16 Nov 2007 iPhone fear causes Canadian carriers to slash rates
Canadian carriers drop data prices as iPhone hovers
The influence of the iPhone is already being felt in Canada – even though the device can't be bought in the country yet - forcing Telus and Bell to slash wireless data prices.
That's the opinion of the SeaBoard Group, which said in a report that the certainty Rogers Communications would soon be selling the handset in Canada had forced its main competitors to strike early and make what the telecommunications consultancy calls "breathtaking" data price cuts.
"The deals now are fabulous," said Iain Grant, SeaBoard's Montreal-based managing director and until now an outspoken critic of Canadian carrier pricing.
SeaBoard calculates that in June, Rogers would have effectively charged a user C$2,600 (£1,296) a month to send or receive 1GB of data (email or web access) on a laptop or any handset except a BlackBerry, while Bell and Telus would have charged C$2,350 (£1,171).
In an email, Rogers spokesman Elizabeth Hamilton complained SeaBoard was "highly selective and oddly restrictive" in its calculations. "1GB usage is extremely uncommon handset use and most likely to be from a high data business user," she wrote. Rogers has a $65 (£34.40) a month plan for modem users that would have been more appropriate choice for comparison, she said.
More expensive
"Our plans offer more value to most customers. By arbitrarily picking a 1GB service, Seaboard's study makes Rogers look more expensive when in fact we are less expensive for the select group of heavy users that do more."
"In previous work, Seaboard attributed Canada's data pricing to a contested belief in a lack of carrier competition in the Canadian market. The carriers have not changed and yet they now have accurate evidence of a significant drop in data pricing from a sample of large Canadian wireless carriers. So how is it Seaboard can attribute Bell and Telus's drop in pricing to the unavailability of a device they confirm these carriers would not be able to launch on their networks? Isn't the significant drop in data pricing really clear evidence that there is in fact, today, a highly competitive wireless industry in Canada?"
In August Telus slashed its rate to $375 (£187) a month, Rogers dropped to $2,470 (£1,231) and Bell stayed the same.
But by last month Telus and Bell were charging $100 £49.85) a month for 1GB of data, while Rogers' rate worked out to $1,580 (£787.70). (Rogers doesn't have a 1GB rate plan, so SeaBoard made a calculation by using the carrier's 500MB of data for $80 a month plan, plus the listed $3 charge for each additional megabyte.)
This price plunge is almost entirely attributable to the expectation that the iPhone is coming, concludes Grant.
The iPhone only runs on a GSM network, which means in this country it can only be offered by Rogers.
However, some people - including Grant - are willing to risk buying a hacked iPhone in the US and run it on the network of either Rogers or its Fido subsidiary.
Apple is squeezing carriers to chop their data rates to boost demand for its handset (or in Grant's words, to make "plans that aren't ridiculous,") which has led to speculation that the reason iPhones aren't sold here is Rogers' reluctance to fall in line.
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