Don’t divorce handset, service pricing: wireless providers

GATINEAU, Que. — Changing the rules so that the cost of a wireless device is divorced from a monthly service payment on a customer’s bill would take a considerable amount of work to implement, a CRTC panel heard Tuesday as the regulator continued its review of the three-year-old Wireless Code. During Quebecor Inc.’s appearance, conducted in French, vice-president of regulatory affairs for telecommunications Dennis Béland told the three-commissioner panel that most proposed modifications to the code governing the conduct of wireless service providers could be handled in half a year. “Six months is probably sufficient with one exception. The only reservation I would have on that six month period would be if the commission ordered suppliers to separate the price of the phone from the price of the service in their plans,” Béland said in French. “If you ordered such a thing, it would be a very important change to our system and we do not believe we could do that within six months.” Béland’s remarks came after a lengthy round of questioning by chairman Jean-Pierre Blais over the discrepancy between the perception of many customers that they are incrementally paying off their subsidized devices on their monthly bills when under a two-year contract and that, accordingly, there should be a reduction to their bills after 24 months. Representatives from Rogers Communications Inc. and BCE Inc. faced similar lines of questioning from vice-chairman Peter Menzies during their appearances Tuesday. The four-day hearing is looking at various issues surrounding the code, which was implemented in 2013. Rogers senior vice-president of regulatory David Watt also expressed reservations over the timeframe required to implement such as change, saying it would take at least 18 months. “To be quite frank, it would imperil any other innovation product development efforts that we would have underway because you would have to devote all of your resources to this particular activity,” Watt said. According to Bell, customers do own their phones at the outset of their contract with the company, even if their contract comes with subsidized devices. “There are times when I wish customers truly understood the value of their wireless device. The issue with the subsidy model is that often customers think that that device that they got truly is worthless,” Claire Gillies, vice-president of marketing for Bell Mobility, said, adding that “customers believe there is an implied handset cost within their service fee and it’s not. In exchange for a commitment, we give you a subsidy and if they want something else, then we’re talking about a financing model, which is very different.” Chris Smale, Rogers’ vice-president of wireless pricing, said that the company “places a monetary value on the contract itself.” And, as Videotron’s vice-president of marketing Bertrand Hébert pointed out, the cost of a bring-your-own-device plan might not be better than the plan a customer receives with a subsidized handset. “I believe that is another way to market your products and services. Is it more transparent? I would not be willing to say that it is. “ Bertrand said, in French, in response to a question from Blais. Watt echoed Hébert’s statement, saying that a plan that a customer signed on to 24 months prior might not even be on the market once their contract is up. — With reporting by Charelle Evelyn at cevelyn@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Don’t divorce handset, service pricing: wireless providers

News | February 7, 2017

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Don’t divorce handset, service pricing: wireless providers

News | February 7, 2017

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