Rogers Cuts iPhone Data Cost, But Not Everyone Happy
Published on: 9th July 2008
TORONTO -(Dow Jones)- Canadians have always grudgingly accepted hefty monthly cellphone fees, but the upcoming launch of Apple's 3G iPhone has led normally compliant Canucks to protest a perceived price gouge by Rogers Communications.
Rogers, the only Canadian carrier that will sell the iPhone, appeared to bow to that pressure Wednesday, announcing a temporary reduction in iPhone data fees. Customers who purchase an iPhone by Aug. 31 and sign a three-year contract will receive six gigabytes of data for C$30 a month, Rogers said Wednesday. The carrier had been asking for C$100 a month.
AT&T, the only carrier that sells the iPhone in the U.S., charges iPhone users US$30 monthly for unlimited data usage. Customers are only required to sign a two-year contract.
The 3G iPhone is scheduled to go on sale in Canada and the U.S. on Friday.
Rogers' price reduction hasn't placated Robert Sheinbein, who runs ruinediphone.com, a protest Web site that has gathered more than 58,000 signatures protesting Rogers' iPhone pricing plan. Sheinbein characterized the move as a "sales and marketing ploy" designed to ensure that Rogers can move its initial inventory of iPhones. "If they want to be fair, they should apologize and not just do a limited-time offer," he said. "Then we can talk."
Elizabeth Hamilton, spokeswoman at Rogers, said the price cut was made in response to Rogers' customers. She said the 3G iPhone is a new device and Rogers didn't have a lot of information about how customers wanted to use it. As that information became available, it became clear that customers were eager to use the device's data capabilities to its fullest potential, so Rogers responded with Wednesday's price initiative, she said.
Hamilton said Rogers will introduce similar promotions for other smartphones, such as the upcoming BlackBerry Bold. Data pricing for the iPhone will revert to the original price when the promotion ends Aug. 31, she said.
Amit Kaminer, analyst at The SeaBoard Group, a telecom consulting and research firm in Toronto, said Rogers' decision to cut data pricing is a "watershed" move. "I think carriers are listening to the market," he said.
Kaminer said the wide gap in fees for mobile-phone use charged by Canadian and U.S. carriers is narrowing, and hit a new low with Rogers' announcement Wednesday, he said.
Sheinbein, chief executive of Oilchange.com, a Web-design and marketing company in Toronto, said there is still lots of room for improvement in Canada. He said his firm was able to cut about two-thirds off its monthly roaming charge by switching to a U.S. carrier that offered a no-roaming-fee plan. Oilchange is able to subscribe to a U.S. carrier because it has a U.S. subsidiary, he said, noting that he is aware of 15-to-20 other Canadians doing the same thing. "The Verizon store in Buffalo where I bought my newest phones about a month ago told me that they get people in every day to get the no-roaming deal," he said.
Before switching to Verizon Wireless, Oilchange paid monthly roaming fees of as much as C$3,000 a month, Sheinbein said. He said he tried to negotiate lower fees with two Canadian carriers, but was unsuccessful. Oilchange.com pays about C$800 a month to Verizon, he said. The company has five employees, he said.
Roaming charges kick in when mobile-phone users travel outside the traditional coverage area of their home network.
Ruinediphone.com plans to host an online rally Friday that Sheinbein said he hopes generates 250,000 signatures protesting Rogers' voice-and-data pricing policies. The petition will than be delivered to Rogers headquarters in Toronto, he said.
-Stuart Weinberg, Dow Jones Newswires; 416-306-2026; email@example.com
(END) Dow Jones Newswires