Bring-your-own-device market encouraged by incumbent discounts

GATINEAU, Que.—Competition for wireless customers in the “bring your own device” market is intensifying as Telus Corp. and BCE Inc. offer discounted plans for customers with their own devices and Rogers Communications Inc. is looking at doing the same, company officials told CRTC commissioners at a hearing Tuesday. Ken Engelhart, Roger's senior vice-president of regulatory affairs, said at the hearings to establish a national code of conduct for the wireless industry that the company is considering discounts for customers who have their own device and only require a Rogers SIM card for mobile service. “Obviously with Bell and Telus now having SIM-only plans in market, it's something we're taking a very hard look at,” he told commissioners. Under questioning from CRTC Chair Jean-Pierre Blais earlier Tuesday, Dave Fuller, Telus' chief marketing officer, said the company discounts its monthly wireless services by 10 per cent for customers who have their own device and are not on a contract. Some customers move to the discounted, “SIM-only” plans after their three-year contracts expire, he said. “In the event that you decided that you wanted to keep the device because it was fine, you were happy with it and you've decided you want to keep it for another couple of years ... you can move to a SIM-only plan, a month-to-month plan which would basically be 10 per cent off of our then existing rate plans,” Fuller said. A “vast majority” of the company's wireless subscribers, he said, upgrade their phones and sign a new three-year contract when the previous one expires. Three-year wireless contracts have come under focus at the CRTC hearings after consumer groups and the Competition Bureau said they are among the most frequent causes of consumer complaints about the wireless industry. Carriers Telus and Rogers said at the hearings this week that three-year contracts are necessary to allow them to recoup the costs of subsidizing consumers' smart phones, which can otherwise cost as much as $900 without a contract. Fuller said Telus does not automatically apply the 10 per cent discount to customers who finish their contracts and pay off their device subsidy, though the company will provide it if requested. He said the company advertises the discount on its website. Telus spokesman Shawn Hall said in an emailed statement that the company began offering the discount in January to customers not under contract after previously offering “upfront bill credits” for bring-your-own-device subscribers since June. He said the program is most popular among customers looking to activate an unlocked device. In an emailed statement Wednesday, Bell spokeswoman Jacqueline Michelis said the company has offered a similar discount “or over a year” to customers who aren’t on a contract. The incumbents also face competitive pressure in the bring-your-own-device market from new entrant carriers like Mobilicity, Wind Mobile, and Public Mobile Inc. that offer discounted basic talk-and-text plans. Engelhart said the Bell and Telus discounts are fostering the bring-your-own-device market. “Bell and Telus are now offering SIM-only plans, and I think that market will develop,” he said. Later, when asked by The Wire Report, Engelhart declined to comment on whether Rogers will offer similar discounts, and, if so, by how much. “We're looking at it,” he said. —With reporting by Nicholas Kyonka at nkyonka@thewirereport.caand editing by Simon Doyle at sdoyle@thewirereport.ca

Bring-your-own-device market encouraged by incumbent discounts

News | February 13, 2013

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