Big Three pitch cheaper data plans to address affordability concerns
Any price ceiling, capacity floor would interfere with market forces, CRTC told
At the federal telecom regulator’s command, the Big Three wireless carriers have proposed lower-cost data-only mobile plans, but questions remain over whether these plans go far enough for low-income consumers.
Last month, the Canadian Radiotelevision and Telecommunications Commission ordered BCE Inc., Rogers Communications Inc. and Telus Corp. to come up with cheaper, data-only plans as part of a broader decision taken in response to the federal government, which had asked the CRTC to reconsider mandating wholesale access to wireless networks to improve affordability.
The CRTC declined to open up the networks for now in the name of protecting facilities-based competition, but said there was a gap in the market for affordable data plans. It gave the incumbents a month to file details on lower-cost, data-only plans, how these plans address affordability concerns and whether a price ceiling or capacity floor would be appropriate. Analysts viewed the decision as a compromise that used a “carrotand-stick” strategy.
In submissions filed this week, the carriers argued Canada already has a wide variety of affordable plans given the competitive market. Nevertheless, they proposed new high-speed 4G/LTE data-only plans. Bell proposed 500 megabytes for $30 per month, Rogers proposed 400 MB for $25 and Telus proposed 500 MB for $30 or 250 MB at lower speeds for $20.
The carriers’ low-cost brands Lucky Mobile, Chatr and Public Mobile already offer wireless plans with both data and talk in a similar price range ($40, $40 and $30 respectively), although these plans use slower 3G data speeds. Their main brands offer data-only plans for tablets and mobile internet (using hotspot devices) for the same price or cheaper, with Bell and Rogers offering tablet plans of 2 GB for $30.
In Saskatchewan, SaskTel offers data-only plans for as low as 1 GB for $15. Shaw Communications Inc.’s Freedom Mobile, which operates in B.C., Alberta and Ontario, has a low-end plan with 250 MB and talk for $25.
It’s not clear exactly how much it costs to deliver data, but wholesale wireless roaming rates are set at $13.28 per gigabyte, or about $6.64 for 500 MB.
Telus noted it’s the only national carrier that currently offers dataonly plans to serve budget-conscious customers like students and seniors who primarily use data to check Facebook or send emails. Its data-only plans cost “less than the price of a daily coffee,” Telus submitted, adding that 500 MB is enough data to send 25,000 text emails, visit 500 websites or send 16,600 instant messages.
Telus called the government’s assertions that Canadians pay high wireless rates “simply not true.”
“The Canadian market for wireless services is robust, featuring world-class networks, a plethora of choice for Canadians and declining prices,” it stated. “To the extent the commission nevertheless seeks additional affordable options for Canadians, the Telus data-only plans add to the choices already available to consumers.”
The Big Three all opposed any sort of price ceiling or data capacity floor, stating these measures would inappropriately interfere with market forces. Bell’s submission noted the CRTC’s policy direction states it should “rely on market forces to the maximum extent feasible.”
“Canada’s fiercely competitive mobile wireless marketplace will ensure that service providers continue to offer low-cost plans without the need of any further regulatory intervention,” Rogers stated in its submission.
“As we continue to invest in our world-class wireless network, we are proposing data-only plans at an economical price so our customers can stay connected to what matters most to them,” Rogers added in an email.
But Ben Klass, a PhD candidate at Carleton University’s School of Journalism and Communication, questioned the prices the Big Three offered in response to the CRTC.
“The plans that they’ve proposed, the price is higher than what they’re already offering,” Klass said, pointing to the tablet plans. He doesn’t see why those rates couldn’t apply to smartphones. “This is not a good-faith effort on the part of the carriers to meet the commission halfway.”
For its part, Rogers said the tablet plans are designed as addons for existing customers. Bell said in an email it offers different price plans for different types of devices. “Our existing tablet-only data plans are targeted at a market that is significantly smaller than that for smartphones, and tablets are often secondary Bell devices or add-ons.”
Still, Klass called on the CRTC to “stop with the baby steps” and take stronger action to make wireless plans more affordable.
Wholesale wireless network access — this would allow resellers, much like in the internet market — is one option, he said.
The CRTC took that off the table in March, but only for now. It plans to revisit the wholesale wireless framework by 2020.