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News Story
Making the right call
By Jim Donnelly, Ottawa Business Journal Staff
Wed, Jul 2, 2008 2:00 PM EST

Just this past week, the powers-that-be at Rogers released their price plans for the long-awaited iPhone (insert collective gasp of delight here).

The result, however, was predictable: more gratuitous gouging of unfortunate Canadian mobile phone users.

First, some background: Rogers and Fido (a subsidiary) have said their typical three-year voice and data plan will range from C$60 to C$115 per month for the supercharged communication device marketed by Apple Inc., set to hit Canuck stores July 11. Those prices include unlimited Wi-Fi access at Rogers and Fido hotspots.

Along with this, consumers can expect to fork out $199 for the phone's eight-gigabyte version, and $299 for the 16-gig edition.

Compare that with numbers from other countries, however, and the static level really begins to rise. Take Germany, for instance, where iPhone prices have recently been slashed by carrier T-Mobile. The lucky Germans will only have to pay one euro for their eight-gig iPhones, along with payment plans of 69 euros per month. The 16-gig version, by contrast, will cost a whopping 19.95 euros, along with an 89-euro monthly plan.

In the U.S., as well, iPhones are relatively cheap in comparison. AT&T, while listing prices similar to Rogers to buy the gadgets, boast plans ranging from US$30 to US$45 per month.

Indeed, a recent study by France's Organization for Economic Co-operation and Development concluded that Canadian consumers are, quite simply, ripped off in the cellphone arena. Compared with an average cellphone bill of $56 per month in Canada – a number that has almost surely risen since early last year – the study showed European carrier Vodafone charges the equivalent of around $38 per month, on average. And users from Denmark only paid an average of $9 per month, the study showed, for mobile phone use.

I suppose it's a little silly to blame individual companies, really – all Canadian mobile carriers shoulder some responsibility, including Telus and BCE. There's just not enough competition. And anyway, if you could charge virtually whatever you wanted for your product and still have a market, you'd probably do it too.

So kudos must certainly be given to the federal government and Industry Canada for their recent and ongoing spectrum auction of new wireless space, which analysts have predicted will almost surely lead to a) more carriers; and, by extension, b) cheaper prices. A total of 105 megahertz were opened for bidding in May, including 40 MHz set aside specifically for new carriers (a move which BCE publicly opposed). The auction is ongoing until bidding by the dozens of interested parties ceases.

One can only hope the threat of real competition leads Canada's 'big three' wireless providers to take a long, hard look in the mirror.


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