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New Telus plans: the good, the bad and the ugly

16 Jul

Great-Migration-SerengetiTelus is the first of Canada’s big three wireless carriers to officially unveil new pricing that will reflect the upcoming CRTC ban on three-year phone contracts. There’s good news and bad news to be found among the new plans.

Let’s start with the bad news. As predicted, the repricing means some pretty stiff hikes for any new customers (existing subscribers can continue on existing plans). With the CRTC effectively limiting wireless contracts to two years starting Dec. 2, carriers are having to sharpen their pencils and figure out how to extract the same amount of revenue (or more) from customers over that shortened period.

Bell and Rogers are expected to release similar re-pricing over the coming days, but more on that in a minute.

The image below shows Telus’s new plan options, effective July 30:

telus-ratesThe minimum on-contract plan, with unlimited nation-wide talk and text and 250 MB of data, will thus cost $70. That’s a huge premium to Telus’s current minimum plan, which goes for $45. It’s actually 55 per cent higher.

On the plus side, customers will get a lot more for that 55-per-cent premium: minutes go up to nation-wide unlimited, from 200 local, and there’s an extra 100 MB of data included. But still, the increase will push a lot of lower-spending would-be customers into the relative stratosphere, meaning that price-conscious people are probably now effectively going to be priced out of being Telus subscribers. They’ll have to look elsewhere – perhaps the company’s flanker brand Koodo, which has also revised its prices, or the likes of Wind or Mobilicity.

Things are a lot more expensive at the higher end too. Under the old plans, the most expensive combination offered 1,000 local minutes and 6 GB of data for $110. The same data allotment with the only available talk and text option will now run $155, with the most expensive plan – which provides 10 GB of data – going for $205.

So what about the good news? Well, since these increases are ultimately tied to the subsidies that Telus gives subscribers on their phones, the plans will be considerably cheaper for those who don’t need them. If, for example, you pay the full cost of your iPhone upfront and effectively BYOD (bring your own device), your monthly bill will be $20 less. That creates a good deal of clarity on exactly what kind of subsidies Canadians are actually getting: according to Telus’s pricing, over a two-year span the subsidy amounts to $480.

It’s worthwhile to note, however, that even if you are BYOD’ing, you’re still going to pay more: the new minimum plan will cost $50, or $5 more than the existing minimum plan. Sure, there’s the extra minutes and data, but this is a clear case of Telus taking the opportunity to raise prices – and therefore average revenue per user (ARPU) – across the board. It’s a pretty strong counter-point to those arguing that high ARPU doesn’t necessarily reflect high prices.

Also, the other shoe – as in what customers will be paying upfront for their phones – has yet to drop. The smart money is that those prices will also be going up, although a Telus spokesperson tells me “that customers do prefer the low upfront cost of a device, so with that in mind device pricing will only change moderately.” The guys at MobileSyrup estimate this will be in the realm of $20 to $30.

MobileSyrup is also reporting that Bell will in fact be the first of the big carriers to actually enact new pricing, starting July 17. According to leaked documents, phone prices will also be going up and Bell will be offering three kinds of plans: voice, voice and data lite, and voice and data plus:

The basic Voice plans will be available in $30, $40 and $50/month offerings and give customers a various number of text and minutes from 200 to 1,000 minutes per month. The Voice and Data Lite plans range in price from $45 to $60/month and gives unlimited texts, 200 and unlimited calling, plus upward of 1GB data. The cost of the Voice and Data Plus are “for customers who use large amounts of data” and will be available from $60/month to $100/month, plus basically give unlimited calling, texts and 5GB of shareable data.

One reason to doubt the leak is that, if true, Bell’s plans might actually be heading downward. The company’s existing $60 plan, for example, gives subscribers 1,000 minutes and only 500 MB of data. The new $60, as per the leak, would bump that up to unlimited voice and 1 GB, which currently costs $70. Here are some of the old plans:

bell-ratesIf the leak is accurate, there is the possibility that Bell is going in a different direction and will charge significantly higher upfront prices on phones rather than raising rates. But that seems unlike Canadian carriers, who tend to move like wildebeests: in the exact same direction. Telus is obviously going with one-size-fits-all pricing on voice and text, while Bell may be preserving choices. It doesn’t look like customers would get as much value with Bell – the new $60 plan, for example, would offer 1 GB of data and unlimited local calling as opposed to nation-wide – but they will have more options, which could ultimately be cheaper than Telus.

Rogers has been quiet so far on its plans, although a spokesperson told me the company will soon be announcing new offers as well.

The real good news is, now that the distorting influence of three-year contracts is on the way out, apples-to-apples price comparisons can be made and Canadian prices can in fact be judged against those in other countries more easily. MobileSyrup’s Dan Bader did just such a comparison with Telus and AT&T in the U.S., to find that the Canadian carrier is generally cheaper, except on the high end:

telus-attOf course, that brings us back to the bad news – or perhaps the ugly news, as it were – which is that the U.S. wireless market is not exactly one to aspire to. More to the point, as the latest Communications Outlook from the Organization for Economic Co-operation and Development reports, Canadian prices rank poorly by just about every measure.

As University of Ottawa professor Michael Geist puts it in his take of the report, “Canada ranks among the ten most expensive countries within the OECD in virtually every category and among the three most expensive countries for several standard data only plans.”

Telus had its own take on the findings, trotting out some rationalizations – including geography, population density, multiple device/SIM card ownership in other countries, and supposedly high Canadian usage – that I’ve spent a good deal of digital ink poking holes in (here and here and here). In between taking potentially defamatory shots at Geist and his alleged “vested interest,” Telus’s senior vice-president of government and regulatory affairs Ted Woodhead points out that despite all that, “Canada really SHOULD be the most expensive country for wireless service in the OECD, but we’re not. That’s a great success story we should be celebrating.”

All of this ought to give new Industry Minister James Moore, who is thankfully replacing the invisible Christian Paradis in that role, some good food for thought during a key time in Canadian wireless. The next few months will likely see the industry transformed, if U.S. carrier Verizon does indeed enter the country as a hungry challenger. The good news is, if that does come to pass, some of these higher prices being announced may just be a temporary thing.

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9 Comments

Posted by on July 16, 2013 in mobile, telus

 

9 responses to “New Telus plans: the good, the bad and the ugly

  1. Alex Davies

    July 16, 2013 at 2:25 am

    I think the catch with the leaked Bell plans that you mentioned, is that the ‘voice & data lite’ plans will be restricted to certain devices, so while the new $60 lite plan seems to be a better deal than what Bell currently offers, it may not be available to iPhone users, for example. Of course, this is just me speculating. It could also relate to device subsidy – peehaps ‘Lite’ plan users get less off the phone when they sign up.

     
    • Lugnuts McGruff

      July 17, 2013 at 3:48 pm

      You know I really really really hate hate hate that nonsense. The nonsense of “certain plans are only available on certain devices” crap.

      F-you! (Not you Alex) What device I intend to use my service on is none of your effing business! Never you mind what device I have. Perhaps I don’t even have a device yet. Perhaps I just enjoy paying for a service tied to a sim-card that’s resting comfortably in my wallet? Perhaps I intend to purchase a unlocked device on kijiji but I just haven’t had an opportunity to do so as yet. Perhaps I’ll unlock it myself afterwards.

      And so on and so on and so on.

      No, sorry, tough luck, you don’t get to know what device I intend to use my service with just like you don’t get to know what I plan to have for dinner tonight.

       
      • redneckonthetrain

        July 20, 2013 at 10:47 am

        Perhaps this would be a case of tied selling? Not that the competition bureau cares… They often acknowledge tied selling in the market place and claim it is not hurting enough consumers badly enough for them to pursue. Sadly the threshold seems to be exceptionally high.

         
  2. Torontoworker

    July 16, 2013 at 8:22 am

    We should also be welcoming the Euro carriers into the Canadian market which are far more price competitive then even the Americans. I spent some time in Germany and Austria in June and had my phone unlocked before hand and used an O2 sim. Incredibly cheap.

     
  3. trixxiii

    July 16, 2013 at 11:50 am

    I AM VERY HAPPY WITH MY WIND!!!! for $45/month i get

    Unlimited Features:
    Canada-wide calling to any number from anyWIND Zone plus all incoming calls while in any WIND Zone
    Canada/US Text Messaging (CA/US) from any WIND Zone
    Global Text Messaging from any WIND Zone
    Canada/US Picture Messaging from any WIND Zone
    WIND to WIND calling across Canada from any WIND Zone
    Unlimited mobile data from any WIND Zone
    Included Features:
    Call Control (Caller ID, missed-call alerts, call forward, call conferencing, call waiting, call hold)

    Voicemail

    I dont think this is offered or may cost $50 now, but i love it and hope WIND stays
    around FORVER! and i hope Verizon comes to town and offers similar rates, since there seems to be no reason for the big 3 to continue to gouge us – other than they can and they do,

     
  4. Geoff

    July 16, 2013 at 3:51 pm

    How $150 for 10GB can be seen as anything but flat out obscene gouging is beyond me. Every other one of Telus’ data plans are just as bad too. Bell and Rogers are no better, I am so sick of paying these scumsuckers markups that are surely in the tens of thousands of percent, to say nothing of the constant inability of the CRTC to go remotely far enough in ANY decision EVER.

    Phone financing is still tied to service so the actual cost is still hidden, so who cares if they’re limited to 2 year contracts? With prices still going up the latest decision is an obvious failure.

    HATE THIS BS beyond description.

     
  5. Alex Davies

    July 17, 2013 at 12:19 pm

    Now that Bell’s plans have been launched, I see that I was right in both aspects – the Data Lite and Data Plus plans are restricted to different levels of devices, at least from what I can see on their website, and they affect the amount of subsidy you get on the phone too.

     
 
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