News

Canada’s big cell companies new data plans "suck," critics say

Regulators told Canada big three cell phone companies to offer cheaper mobile data plans but few are impressed with the new offers.

by Kieran Delamont
May 8 2018, 2:28pm

Canadian Press

Critics are panning the lower-cost, data-only wireless plan proposals submitted by Bell, Rogers and Telus to the Canadian Radio-television and Telecommunication Commission (CRTC), after the CRTC told them they had one month to come up with cheaper plans that would be available nationwide.

“I think when you look at these plans across the board, they’re pretty depressing,” says Laura Tribe, executive director of OpenMedia. “It’s true, they do suck.”

In March the CRTC, ostensibly in an effort to lower the cost of cell phone plans after a series of challenges, told the so-called Big Three telecom companies that they had to offer a data-only plan—meaning that no voice minutes or texts are included in the deal—that operated on the fastest technology (ie., 4G LTE) available.

But anyone who was holding on to hope for a paradigm shift in the world of Canadian wireless service will be left wanting; the plans that the big three came back with are, for the most part, re-jigged versions of existing low-cost plans, critics say.

NEW OFFERS

Bell, for instance, is creating a plan that gives customers 500 MB of data for $30; Rogers went with 400 MB for $25; Telus, which technically already offered such a plan through their subsidiary brand Public Mobile, simply shaved $5 off their existing price, and are offering 600 MB for $30 as a prepaid plan, and 500MB for $30 as a post-paid plan. Both Bell and Telus are offering those plans through subsidiary carriers (Bell through Virgin and Telus through both Public Mobile and Koodoo). Rogers did not say if they were offering the plan under their flagship brand or a subsidiary.

The plans are unlikely to turn any heads. “They’re trying to make it as unpalatable as possible,” says Tribe. “There’s nothing in those plans that would make me go, ‘Oh, that seems great.’”

Canadian consumers already pay some of the highest rates for data in the developed world. According to a report released last week by Rewheel, a Finnish telecom research firm, Canada ranked fifth-last in a ranking of how much data you can buy for €30 (about $45 CAD). That much cash will only get you around 2 GBs of data, putting Canada ahead of Greece, Malta, Korea and Hungary. And that was only on plans that included voice minutes; when it came to data-only plans, Canada ranked dead last compared to listed countries in the European Union and the Organization of Economic Cooperation and Development (OECD).

The precise reason for Canada’s high wireless costs is a matter of debate. Companies argue the country’s size and the cost of maintaining a national network is one explanation for its comparatively high costs and say prices paid by consumers will help fund investment in new 5G networks is another.

Samer Bishay, the CEO of Ice Wireless (a regional wireless provider in Northern Canada), laughed off the idea that these new data plans from the big cellphone firms would be meaningful for Canadian consumers. “It’s a joke man, it’s a joke,” he told VICE News. “I just feel like they’re gaming the system, finding loopholes. … If we continue down the path of relying on incumbents to solve the country’s problems, we’re not going to see a solution for another two years. Maybe five.”

The problem, says Bishay, is structural: because the Telecommunications Act heavily restricts foreign ownership of Canada’s wireless spectrum, global cell service companies like Verizon, Vodafone, or Orange aren’t able to come in and set up a national network. The result is that Bell, Telus and Rogers get to operate without much competition on a national level. “The only way you’re going to tackle [this] is by literally running a national network,” says Bishay.

'NO DECISIONS'

Publicly all three companies continue to insist that their plans are, in fact, affordable and that they meet the needs of average Canadians. But critics say it is hard to square that sentiment with the numbers: in 2016, the average Canadian cell phone user used over 1.2 GBs of data per month. The most generous of the lower-cost, data-only plans being proposed offers less than half that.

Bell, Rogers and Telus justify this by saying that data is meant as a supplement to free wi-fi services—the idea being that you can essentially stitch together a network of coffee shops and public wi-fi routers, and use data to fill in the gaps. In their submissions to the CRTC, Canada’s telcos cast this an alternative, but Tribe points out that this is already how people use their cell phones. “People are already using wi-fi for data as much as they can,” she says. “This is no longer the era where it’s sweet to have an internet connection because it’s fun. People need these things.”

Bishay says that if the big three continue to bury their heads in the sand, that eventually their business model will collapse. “There is hope for the Canadian consumer at the end of the day. The awareness has never been higher, and they continue to dig their own trench,” he says. “You get pushed to a point where you say ‘screw it, you have nothing to lose.’ And they’re pushing the Canadian consumer to that point. The second there’s another choice, they’re going to go for it.”

A spokesperson for Rogers did not respond directly to the concerns of critics like Tribe and others, but said in an email statement, “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.”

A spokesperson for Telus also responded, saying, “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 ball now flips to the CRTC’s court. The proposed plans are now open for public consultation, before the CRTC decides whether or not to approve them, or kick the task back to the telcos. Vanessa Damha, a spokesperson for Bell, could not say when the plans would be made available to consumers. “The CRTC is reviewing all proposals as part of its consultation,” she said, in an email to VICE News. “No decisions have been made.”

A spokesperson for the CRTC said that they could not comment on open consultations, and did not provide a timeline for when a decision could be expected.

Theoretically, the CRTC could look at the plans and say they don’t do enough to bring costs down; practically, however, the plans do everything the CRTC asked of the telcos, and it is unlikely to bare its teeth in any respects. “The CRTC has the chance to send a very strong signal about the need for affordable [plans],” says Tribe. “Will the do it? I don’t know. [...] Unless the CRTC has a really dramatic shift in what they come up with, it’s not going to be anything different.”