Freedom Mobile low-cost data plans cheaper than Big Three offerings
Shaw-owned wireless provider makes latest move to shake up fierce market
TORONTO Shaw Communications Inc.’s Freedom Mobile launched two low-cost wireless data plans that have cheaper rates than what the Big Three proposed when the industry’s regulator earlier this spring ordered them to offer more affordable service.
Freedom’s plans announced Thursday are its latest move to shake up a wireless market that consumers have long complained is comparatively unaffordable and dominated by the incumbents.
Earlier this spring, in response to such complaints and a push by the federal government for more wireless competition, the Canadian Radio-television and Telecommunications Commission demanded that Rogers Communications Inc., BCE Inc. and Telus Corp. come up with low-cost, data-only plans.
Freedom, which has 1.3 million subscribers in an overall market of 31 million, was not required to participate in the proceeding. Yet its new offerings — one gigabyte of data and unlimited text for $25 per month and 250 megabytes of data, 100 minutes of talk and unlimited texts for $15 per month — beat the incumbents’ proposals, which critics at the time called “disappointing ” and “a joke.”
For comparison, Rogers proposed 400 MB of data for $25, Bell submitted a 500-MB/$30 plan and Telus is now offering 600 MB for $30 or 250 MB of lower-speed data for $20.
“For customers who use their services modestly, the new entrylevel plans announced today offer fair and affordable pricing and provide far more value than any of the low-cost, data-only plans recently proposed by the incumbents,” Shaw’s wireless president Paul McAleese said in a news release.
In regulatory filings earlier this month, Telus defended its proposal as “completely responsive” to the CRTC’s criteria that plans be available on the latest 4G LTE network technology and that customers be able to pay either in advance or on contract.
Shaw’s lower-price plans, however, come with a catch. Customers must register for an account and sign up for auto pay from a credit card or bank account. If they don’t, they must pay an additional $5 per month on these plans and all Freedom plans going forward.
Shaw said this “digital discount” makes it possible to offer cheaper prices. The auto-pay requirement is an industry first across a carrier’s slate of wireless plans.
Shaw, which bought Freedom (formerly Wind Mobile) for $1.6 billion in 2016, said it timed the lowcost plan launch for the back-toschool season, one of the industry’s two busiest promotional periods.
Freedom made its first major splash during last year’s holiday shopping season, the other busy promotional period, by offering 10 GB of wireless data for $60, an unprecedented deal in Alberta, British Columbia and Ontario. The Big Three matched the deal, sparking a five-day price war and massive demand from consumers used to paying more than double for that much data.
Since then, promotions have stabilized. But analysts anticipate Freedom’s discounts could hurt the incumbents’ revenue growth, given that they are used to seeing average billings rise every quarter.
So far, Freedom is making headway even though its network is not as fast or reliable as the Big Three’s networks. Shaw is spending billions to try to bring its network up to speed, and has introduced LTE in its largest markets.
It has an advantage in the upcoming auction for 600-MHz spectrum, the frequency needed to power next-generation 5G networks.
The government plans to set aside 43 per cent of the spectrum for smaller players with less than a 10-per-cent market share, much to the chagrin of the incumbents that argue massive cable companies such as Shaw and Quebecor Inc., which owns Vidéotron, should not be entitled to a special deal.
But Freedom argues its new plans prove the government’s interventions are needed to improve competition.
“Our entry-level plans demonstrate that the federal government’s pro-competitive policies are working,” McAleese said.
For customers who use their services modestly, the new entry-level plans ... offer fair and affordable pricing.