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Wireless carriers are begging for it with rate hikes

17 Mar

fight-clubIn case you haven’t heard, all three of Canada’s major wireless carriers are raising the rates on their plans, all coincidentally by $5. It’s hard to figure out which department to file this one under: it could go under “Are You &$%$# Kidding Me?” or “Oligopoly 101,” but it most likely qualifies for “Digging Our Own Graves.”

Telus, which recently announced it was quitting the Canadian Wireless Telecommunications Association lobby group, was the first to strike, with leaks in January basically informing the other two of what the acceptable fee increases would be. Bell and Rogers of course followed Canada’s “uncarrier” (chortle) and now all three are moving in unison.

This marks the second major fee increase since the summer, when the Big Three all simultaneously brought in hikes to coincide with the elimination of three-year contracts.

Why is this happening? It’s very simple, really: the new entrants are dead, and so is competition. Public Mobile has been bought by Telus, Mobilicity is under creditor protection and Wind is being left to wither on the vine by its Russian owner Vimpelcom (neither of those last two companies bought all-important new spectrum in the recently concluded auction).

The one potential challenger that did buy spectrum in that auction, Quebecor, isn’t just being coy about whether it will actually use it, the company is also now in a state of flux since its chief executive Pierre Karl Peladeau just declared himself a separatist.

Things haven’t looked this dark for the Canadian wireless consumer since both Clearnet and Fido were taken out by the Big Three more than a decade ago. The government’s claims of lowering wireless prices over the past few years, if they were ever true, now look laughable. Any gains made since 2008 have been erased in a matter of months.

For consumers and industry observers, this is exasperating to say the least. For the government, it must be infuriating. At a time when they should be walking on eggshells, the carriers are instead thumbing their noses at Ottawa.

Dumb, dumb, dumb. When you ask to get nailed, sooner or later the hammer comes down.

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7 Comments

Posted by on March 17, 2014 in bell, mobile, rogers, telus

 

7 responses to “Wireless carriers are begging for it with rate hikes

  1. Jean-François Mezei

    March 17, 2014 at 2:40 am

    It’s quite simple: When the winners of the 700mhz auction were announced, Mr James Moore declared “Mission Accomplished” with his 4 carriers per region plan with Videotron providing a stable 4th competitor no matter what happens to Mobilicity/Wind.

    This sent a signal to the CRTC that there is less need for regulation. CRTC even released a decision allowing the big carriers to continue steal unspent balances from prepaid accounts. CRTC even cited PIAC’s support of this practice (even though PIAC didn’t even participate in that process). And no media outlet covered that anti-consumer decision, not even Openmedia.

    This is basically a green light for incumbents to return to business as usual.

    That leaves the processes on Mobile TV (net neutrality) and wholesale roaming with big question marks. If the CRTC switched back to “hands off, let incumbents compete” approach for prepaid, does this mean the same will happen for those 2 important files ?

    Of Interest is that Vidéotron did state that making use of their newsly acquire 700 in the RoC would be dependent on at least good access to roaming. So perhaps at least that aspect might get done because if Vidéotron decides to sell/lease its spectrum, then the “4th” carrier will have to be Wind and Wind will absolutely need regulation to get decent roaming rates.

     
  2. jvanl

    March 17, 2014 at 9:14 am

    An “acceptable” fee increase is one that won’t incite Canadian consumers to raise a stink about it to government.

    And therein lies the real issue.

    We are a nation of cynical consumers who know we are getting hosed, but don’t care enough to do anything about it.

    Given the industry’s track record, we really have nobody to blame but ourselves any more.

    We know what we know.

     
  3. tomundone

    March 17, 2014 at 9:59 am

    Agreed. Having Quebecor take most of the spectrum allocated to the new entrants was a great victory for Robellus. Not only does that rob Wind/Mobi of a future, but Quebecor is very similar to Robellus and will want to play the game the same way.

     
  4. redneckonthetrain

    March 18, 2014 at 11:05 pm

    I can only hope this mythical hammer you dream of is vertical separation.

    What else is left to do?

     
  5. Andrew Seipp

    March 19, 2014 at 3:26 am

    I’m fearful of what the government will do at this point. Every time they’ve tried to intervene it’s backfired. The banning of 3 year contracts, as nice as it was, backfired when the carriers simply raised their prices and basically took 3 years of revenue but only provided 2 years of service.

    It’s not that something shouldn’t be done, but the track record for intervention has been pretty abysmal so far and I fear that any government intervention is only going to make things worse.

     
 
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