Canadians to Fork Out More for Smartphone Plans

Canada’s big three cell phone providers have jointly announced that they are bending over the general public for more money on new smartphone plans. The basic plan, which is not very functional due to limits on data, will now increase from $75/mos to $80/mos. Those wanting more functional amounts of data will have to pay in the vicinity of $145/mos.

These new rates will hit new cell phone subscribers with the exception of those the provinces of Saskatchewan and Manitoba. Bell Mobility, Rogers, and Telus aka “the big three wireless carriers” will offer a woefully inept 0.5gb of data along with unlimited talk, text, and voice mail for $80.00. Exactly where is the value of competition in a market that has all three main competitors jointly raising their prices for an identical set of benefits? Is it too much to ask who is regulating these providers? Isn’t this an example of price fixing?

In a statement to eCanadaNow, media relations rep Shawn Hall, said that Telus actually increased their prices 2 weeks ago; not over the weekend as CBC initially reported.

Rogers also issued a statement saying:

“Like any business, we regularly adjust our prices and the services we offer. We do this not only in our wireless business but across all products we offer our customers,” they wrote, noting that not all price plans changed. “These changes do not affect a customer’s current plan. They only apply to customers who choose to sign up for one of these new plans.”

It should be noted that it was only this past summer when Bell Mobility, Rogers, and Telus announced simplified plans to allow customers to get a basic set of benefits for a set rate. The top rate for an introductory smartphone plan was $55. At the time, the big three wireless carriers all adopted that model. Predictably, with the competitors no longer competing, the prices have gone steadily up which is what happens in the absence of a free market.

The Canadian government, which had to have been approved the price changes, claims it is outraged at the price spikes. Some in the government claim that the answer is to introduce a fourth competitor into the market. What’s wrong with just making the first three stop price fixing and compete in a manner beneficial to the general public? Rogers said that the increasing needs of consumers justify the higher prices.

The government has been trying to introduce Quebec’s Videotron, in hopes of stimulating competition and stemming price increases. The company was recently given 700 Mhz licenses in Alberta, Ontario, and B.C. However, it remains to be seen whether or not Videotron will be able to compete on a large scale with the Big 3, and until then, smartphone users will have to live with higher prices.

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Source :
http://www.cbc.ca/news/business/wireless-carriers-hike-prices-across-canada-1.2575886