Bell cuts roaming rates as CRTC ponders regulations

BCE Inc. chopped its U.S. mobile roaming pricing as telecom carriers face possible regulatory intervention from the CRTC on roaming rates. In a release Monday, BCE said it was cutting the cost of its monthly U.S. roaming package in half, from $50 to $25. That package, which allows BCE’s wireless consumers to piggyback on American carriers’ networks when travelling to the United States, includes 50 MB of monthly data usage, 50 minutes of calls to the U.S. or Canada, unlimited incoming text messages and 200 outgoing texts, the release said. “In our view the best way to ensure that wireless remains forborne is self-policing by carriers on emotive issues such as international roaming,” Canaccord Genuity analyst Dvai Ghose said in a research note Monday. He said BCE’s decision to lower its roaming rates is a “prudent move” that could “pre-empt” CRTC regulation. It could also lead to consumer and regulatory “goodwill” for Bell. The CRTC launched a fact-finding exercise less than a month ago into Canadian carriers’ roaming rates in Canada and the U.S. In an Aug. 30 letter to wireless carriers, the commission said it was examining how much Canadian carriers pay to allow their customers to roam on each others’ networks, how much they pay to let them roam on U.S. networks, and how they pass those costs on to their subscribers. Chris Seidl, the CRTC’s executive director of telecommunications, told The Wire Report at the time that the commission had not yet determined whether it would attempt to regulate retail roaming rates, and would decide after reviewing the carriers’ submissions. Mirko Bibic, BCE’s senior vice-president of regulatory affairs, said in an interview on Parliament Hill Monday that the company’s decision to cut U.S. roaming rates resulted from discussions it had with customers this summer. “We’re engaging that discussion and the one issue that would come up was roaming,” he said. “It became apparent in that dialogue that while customers actually do perceive that they receive tremendous value from our services, this was seen to be one sore point. So we wanted to start addressing that issue and we started with where Canadians travel to the most, the U.S.” BCE’s price reduction is designed to ward off the type of regulations proposed by the European Union (EU) last week, John Lawford, executive director of the Public Interest Advocacy Centre (PIAC), said in an interview. Those proposals, which must still be voted on by members of the European Parliament, are designed to ensure citizens who travel to other EU countries pay the same price for their wireless services as they do in their home country. “I think it’s a good effort on the CRTC’s part and I think Bell’s definitely reacting to the CRTC efforts but it’s also reacting to the European stuff,” Lawford said. “When people hear about that, where roaming isn’t going to cost anything in another jurisdiction … that gets them pretty excited.” Lawford said he believes it is a “forgone conclusion” that the CRTC will attempt to regulate roaming rates after reviewing the carriers’ records. To be most effective, he said, the commission should work with U.S. regulator the Federal Communications Commission (FCC) to coordinate roaming across the two countries. “That’s all it takes. It just takes the two regulators saying, ‘You do your end and we’ll do our end,’” he said. “If the FCC and the CRTC get together across the table and say ‘listen the roaming rates are too high, what are we going to do about?’ then they can do something in parallel and make it work," Lawford said. He added that he believes BCE could still earn a profit if it dropped its U.S. roaming rates below those announced Monday. BCE said Monday that consumers who subscribe to the roaming package and go over their monthly roaming limits will be charged 50 cents for each additional megabyte of data, 25 cents per minute for additional phone calls, and 15 cents for each additional text message they send above the limits. Subscribers can also pay for a roaming "add-on" that allows them to add 100 MB of extra data per month, 100 minutes of extra talk time, or unlimited text messaging for $20 per month, the company said, noting that price was marked down from $40. Cannacord’s Ghose estimated that charges applied to subscribers who use their phones in the U.S. account for about three per cent of BCE’s wireless revenues. He noted that those revenues might not fall in lockstep with the new rates, since the lower prices could encourage people to use their phones more when travelling. Competing wireless incumbents Rogers Communications Inc. and Telus Corp. may now feel pressure to lower their own U.S. roaming prices to more closely match Bell’s, Ghose added. Rogers launched new roaming rates in May that allow customers travelling to the U.S. to receive up to 50 MB of data usage per day, at a daily cost of $8. Bibic said BCE’s decision to reduce its U.S. roaming rates was not related to the specter of regulatory intervention. “It’s not precipitated by the CRTC. It’s precipitated by having a direct conversation with Canadians and trying to listen,” he said. Ronald Gruia, a Toronto-based principal telecom analyst at U.S. consulting firm Frost & Sullivan, said in a telephone interview that the timing of the release suggests otherwise. “It’s just a coincidence that they’re doing this now? This is nonsense,” he said. “If they care so much about their customers, they would have done this a long time ago. This is something the customers have been complaining about forever.” Bibic rejected the suggestion that BCE’s new roaming rates were motivated by the CRTC’s fact-finding exercise. He noted that it is still uncertain whether the commission will attempt to regulate roaming prices, and said it would have to conduct lengthy public consultations before it could do so. “If it was really about the CRTC, why would we do it today? We could do it months and months down the road,” he said. “We compete every single day and we change our plans and we make them better for consumers all the time and it has nothing to do with regulation or the threat of regulation. It’s because we compete," he said. Blais said on CBC Radio program the Current on Monday that the CRTC has not historically regulated roaming rates and needed more information from providers to better understand the issue. “I don't want to prejudge the information we have,” Blais said. “Public policy is best done on fact-based evidence. Let's start with asking the right questions, getting the evidence. “But I know Canadians are concerned about their roaming charges, and that's why in the wireless code, we had heard a lot from Canadians about 'bill shock,'” Blais said, adding that he wants to "put Canadians at the centre" of their communications system. “We might have to build a shrine to you if you go after these roaming charges,” Anna Maria Tremonti, host of the Current, said at the start of the radio interview. "Well, we're just doing our job," Blais said. —With reporting by Nicholas Kyonka at nkyonka@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Bell cuts roaming rates as CRTC ponders regulations

News | September 16, 2013

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Bell cuts roaming rates as CRTC ponders regulations

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