Rogers’ new no-data-overage plan a ‘necessary’ development: analyst

Rogers Communications Inc.’s launch of a wireless plan that won’t charge customers for exceeding their data buckets is part of an inevitable move to more affordable telecom pricing in Canada, according to RBC Capital Markets analyst Drew McReynolds. McReynolds said in a research note that “unlimited data plans begin to address the inevitability of Rogers (and other national incumbents) needing to make more wireless data more affordable to Canadians, driven both for commercial reasons in advance of 5G, and for regulatory reasons in light of the wireless review and ongoing regulatory scrutiny.” On Wednesday, Rogers became the first Canadian national carrier to offer a wireless data plan with no overage charges, a move that came after months of increased political and regulatory attention on telecom affordability, and ahead of a CRTC hearing on the mobile wireless market that will consider whether to mandate access by mobile virtual network operators (MVNOs) to wireless networks. The plans will be available Thursday and range from $75 for 10GB of data to $125 for 50GB in most provinces. Prices in Manitoba and Saskatchewan are slightly lower, from $65 for 10GB to $115 for 50GB, according to Rogers’ website. Once a customer passes these amounts, they will see their data speeds throttled to 256 Kbps, a Rogers spokesperson said in an email. Customers looking for more high speed data can purchase a 3GB Speed Pass for $15, or pool data with family and friends, the company outlined in a press release. A report from OpenSignal in February 2019 said Rogers’ average wireless download speeds were 36.3 Mbps, according to measurements using its app. Rogers also said it would introduce new device financing options later this summer, which will allow customers to “purchase any device they want at $0, any day of the year. Once their device is paid off, customers will only pay for their monthly service plan.” McReynolds said the launch of the plans and new financing models is a “necessary yet price-disciplined way of modernizing the wireless network access fee model in Canada.” He added that the offering of such plans by the wireless incumbents could better position them “to compete against the regional wireless players, any potential new MVNO framework, and/or the longer-term telecom substitution effects of mobile-WiFi, bundled re-sellers and/or wireless-only households.” Rogers isn’t the first Canadian carrier to do away with data overages. Shaw Communications Inc.’s Freedom Mobile doesn’t charge customers when they go over their data allotments and has used that as a marketing tactic in its new ad campaign. Instead, it slows download speeds to 256 kbps on Freedom’s network and 128 kbps on roaming partners’ networks, according to its fair usage policy. If usage continues to be high, the policy outlines speeds may be further reduced to a “maximum” of 32 kbps download. Before being purchased by BCE Inc., Manitoba Telecom Services Inc. had unlimited wireless data offers. After the acquisition, Bell axed the unlimited option for new customers. Monday’s announcement wouldn’t be the first time the wireless incumbents offered previously-unprecedented price points that matched Freedom Mobile offers. Freedom’s “Big Gig” 10 GB for $50 plans in December 2017 sparked a price war when the big three responded with similar plans. That caused churn at Telus Corp. to increase, while Bell CEO George Cope said the first three months of 2018 represented one of the most competitive in the wireless business he’s seen. Marie Aspiazu, digital rights campaigner for internet advocacy group OpenMedia, noted that such plans are “far from a novelty in other countries,” like the United States. “Why did it take them so long -- that’s my question,” she said in a phone interview. She also questioned whether the plan should be classified as unlimited. “The catch is, is it really truly unlimited if they’re going to throttle your speeds after you go past your data caps? I don’t think so,” she said, adding that the throttled speed is a small fraction of Rogers’ usual speeds. Affordability of wireless and other telecom services has become an increasingly political issue in recent months, though executives from the big three maintained there is no problem with Canadian pricing at a conference last week. Innovation Minister Navdeep Bains proposed a new policy direction this spring with the explicit aim of making internet and wireless service more affordable while the NDP introduced a plan to make telecom services more affordable in Parliament this week. Its motion to implement that plan, which included imposing price ceilings, eliminating data caps and ending bad sales practices, was voted down in the House of Commons Tuesday. During question period, NDP leader Jagmeet Singh accused previous Conservative and Liberal government of allowing “cellphone companies and telecom companies to gouge Canadians to the point that now they are making $7.5 billion in profits,” and said the Liberals have “failed to stand up to big telecom.” Prime Minister Justin Trudeau responded, according to a transcript, that the government has “taken steps to support affordability, competition and consumer interests,” pointing to prices being lower in areas of the country with more competition and new low-cost data-only plans, as well as the government’s order to the CRTC to investigate high-pressure sales practices. “However, I recognize that more must be done," Trudeau said. "That is why we issued a policy directive to the CRTC which requires consumer interests to be considered when making decisions.” — With reporting Vicente Biancardi da Camara at vcamara@thewirereport.ca and Anja Karadeglija atakarad@thewirereport.ca and editing by Ahmad Hathout at ahathout@thewirereport.ca

Rogers’ new no-data-overage plan a ‘necessary’ development: analyst

News | June 12, 2019

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Rogers’ new no-data-overage plan a ‘necessary’ development: analyst

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