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How to get an iPhone

Jack Kapica, October 10, 2007 at 2:47 PM EDT

The reason Rogers is tight-lipped about why it hasn’t struck a deal to bring Apple’s iPhone into Canada is because it would involve an embarrassing admission: To make the iPhone financially attractive, Rogers would have to cut the rates it charges its customers for data. And what company wants to cut its prices when there is no pressure on them to do so?

Well, that pressure is beginning to rise.

So far, Canadians are paying as much as three times what American customers are paying for data, although comparing prices based on the Byzantine structure of cellphone plans would be foolishly time-consuming. This is the way the allegedly competitive service providers like it. They collect rates from customers largely ignorant of the dreadful prices they’re paying, and distract the customers by all the latest sexy handsets and the exhausting features they have. So Rogers, Telus and Bell Mobility have been quietly raking it in.

That is, until Apple’s astonishing market clout started to create a demand for the iPhone.

Rogers, Canada’s only major service provider that could offer the GSM service (the iPhone, so far, works only on the GSM network), is faced with a decision: Lower its data rates to make the iPhone attractive or keep the data rates and watch iPhone customers stay away in droves.

Canadians would have to pay $400 for the iPhone, and to use all the iPhone features, about $300 a month in voice and data fees (the iPhone is a heavy user of mobile data transfer). By comparison, AT&T, the sole company offering the iPhone in the United States, allows a plan for $100 that includes 1,350 minutes of voice calls, unlimited data, video voice mail, 200 text messages and unlimited use nights and weekends.

The iPhone would be too expensive for Canadians to buy even if they had a data plan that charged them $100 a month.

So far, Rogers has been sitting on its hands, unwilling to cut its rates because it is still unsure whether there would be enough of a market for the iPhone to offset such a major cut.

Well, pressure to lower the rates has arrived, and from an interesting source: Bell Mobility, which has no chance of landing an iPhone deal because it works on the incompatible CDMA network. Instead, Bell is cutting data rates on another device, the wireless connection card, which offers access to the Internet, e-mail, network applications or corporate VPNs, fit into standard laptop card slots and are very easy to use.

These cards are used by Rogers, Bell and Telus, and will fit into almost any laptop. They’re just like cellphones, but without the voice-calling part. Kyocera, Novatel, Sierra Wireless and others make them.

Although both Rogers and Bell both offer these cards, Bell recently introduced a new unlimited e-mail and Internet plan for $75 per month, and a lighter plan beginning at $25 per month. A similar all-you-can-eat plan from Rogers runs at $100 per month.

A Bell spokesman told me that cutting the price on its data plan “could be seen as a precursor” to the lower rates that would make the iPhone more attractive to the Canadian market.

Canadian data rates must come down. There’s no excuse to charge us three times what the Americans pay, especially with the dollar running at or above par.

 

 

  1. Simon Cohen from Canada writes: ' Bell Mobility, which has no chance of landing an iPhone deal because it works on the incompatible CDMA network.' Jack, Bell's network is EVDO, and Apple is surely working on an EVDO version of the iPhone much as RIM always releases EVDO versions of the Blackberry. It just won't happen tomorrow. Patience people - the iPhone is cool, but you don't need it right now. :-)
  2. Richard Robertson from Canada writes: The way to get an iPhone is to take a short drive to the US. Go to an Apple or AT&T store and buy one. The price is attractive with our dollar at par and the feature set of the iPhone is outstanding. I have been using mine now on the Rogers network for almost a month. (NOTE: Have to downgrade from 1.1.1) All cell phones plans in Canada are antiquated when compared to the rest of the planet. There are even - supposed - 3rd world countries whose plans are cheaper. We need to allow other service providers into Canada to shake our non-competitive providers!

    Go buy an iPhone and enjoy its interface.
  3. Travel Well from Vancouver, Canada writes: The cost of data wireless is actually more that three more. Take a $100 plan, you can easily use up the 100 MB of data in 30 minutes if you use applications like maps. Once you hit the 30 min usage, and continue to use the 'high speed', it turn out to be able $10 per min! Most people don't do the math. I've seen data plan bills that were more that $5000 a month. Just 'roam' to the US and download a service pack or two...
  4. Bob Duncan from Winnipeg, Canada writes: One thing about the data price that really frustrates me is it is hurting our online mobile market. It is difficult for Canadian businesses to justify mobile features because the usage isn't there to support advertising.

    Everyone is talking about how big the Internet is going to be on mobile phones and with companies like Roger's holding us back, we are going to fall so far behind.
  5. phil mostert from St Catharines,, Canada writes: I make my living as a consultant who helps companies reduce telecommunications costs. Your comments re Rogers policies regarding data pricing is correct. Rogers seems to be the big winner in the Number Portability race. They have been gaining market share at Bell Mobility's expense. Their expanded network coverage with the Fido acquisition that permeates the 'it's all about the network stupid' strategy seems to be working. As a result they see no need to be a price leader. Their data rates lag the other two specifically with regard to RIM data plans as well. the other have extended the RIM data allocations to their customers where Rogers has not. They may be counting on the fact that in Canada only Business customer care about data plans and the iPhone is a residential product. In the US data is much more prevalent with residential customers as they have data services we have not seen here. (Mobile Web 2.0, Mobile TV, WiFi Internet access ability, etc) Maybe thye should take the leap and work on developing new services like this to really take the lead. They could really play to their network advantage doing so. To do that they need to lower data rates. The question is when. My opinion is 'yesterday' or risk losing the little good will they have.
  6. Steve Hume from Canada writes: As a current Rogers Blackberry user, I do not use web browsing due to Rogers ridiculous fees. This pricing policy has turned me away from buying any other Rogers services like home phone or internet access. This pricing behavior will haunt Rogers as new wireless spectrum will have to be given to a more aggressive (pricing) competitor. When 4G wireless arrives, maybe even Apple and Google will participate in wireless delivery for their clients. I'm not holding my breath for iPhone in Canada, sadly.
  7. h w from Waterloo, Canada writes: Jack, you failed to mention Fido, now owned by Rogers, which has a nearly identical fee structure (how figure) giving mother Rogers a de facto GSM monopoly. What is interesting is that both unlocked Blackberry and iPhones are able to easily operate on the pay-as-you-go plans, because FIDO allows you data service (you must ask for it to be turned on, and you will still pay by the Kilobyte). With Fido's 'free roaming' on Rogers' infrastructure, that makes it the best bet, since Rogers themselves will not enable data unless you have a data plan and post-paid monthly paid voice plan. Count on this bonus to be taken away any time soon. It's true, I know people paying 60$/mo for 1 megabyte (!) of monthly Blackberry service! Rip-off! Thanks Robbers ( er, I mean Rogers).
  8. Andrej Voth from Canada writes: I am one of those who is waiting impatiently for an iphone. The Cellphone companies here are a Mafia stile operators who rip off their clients. The cell phones they sell are antique?! I emigrated last year to Canada from Europe, and I am shocked what they sell us here. Even phones which look as if they are latest models lack a lot of features which we had standard in the old country. The rates are ridiculous, in Europe I had a flat 25€ per moth all-you-can-eat plan (and NO system access charges!). I have been in a lot of so called two-thirds world countries and I have never dreamed off that in Canada I will find some areas of life sooo undeveloped. I love the people here, bur hate some business practices here.
  9. andy c from Canada writes: all cell phone carriers have another issue to worry about; the emergence of wifi enabled cell phones. as more and more wifi hot spots are available the reliance on data packages from cell phone carriers becomes less and less. especially considering you can make voip calls on wifi phones for next to nothing. Google truphone for more information
  10. Ziad Fazel from Calgary, Canada writes: Thanks Richard Robertson. How bad are the roaming charges?

    I considered buying an iPhone in the US, registering with ATT through a relative's address, and paying the roaming fees in Canada for voice only. Only using data from WiFi or Edge in 'emergencies'.

    So could you advise:
    - are there roaming charges just from the phone keeping contact with the base station while it is on?
    - what are the roaming voice charges per minute?
    - what are the roaming data charges per minute?

    My other thought of hacking it to use the SIM from an existing Rogers voice account is gone - I would rather rely on Apple's software updates than a hacker.

    Would appreciate if you could answer here, or maybe give Jack a call and he can buy you and your wife a dinner interview for a follow-up article. Please Jack?
  11. Taanta Gupta from Toronto, Canada writes:
    Actually we have been public about the Apple iPhone and it is not in the least bit embarrassing. We do not have control of when Apple chooses to enter the Canadian market. When it does, we will be ready . Let me quote the President of Wireless, Rob Bruce from as far back as a couple of months ago' The iPhone is a phenomenal product and we look forward to being able to offer it in Canada. As far as when, I cannot give you a precise answer. I would say it is fair to say that it is a big world out there with more than 2 billion GSM subscribers and if you believe what you read in the papers, Apple is focused on where they will go next after the US in terms of its next set of very large markets. I can tell you that we're ready to move forward in Canada and we're excited to continue our dialogue with them whenever they are ready'.

    Stating that Rogers has been 'sitting on its hands' is not just inaccurate, it is plain foolish. We very much look forward to the day we can launch the iPhone in Canada.

    Taanta Gupta
    Vice President, Communications
    Rogers
  12. May C from Canada writes: It's unbelievable that as Canadians, we pay so much more for our cellular phone, data, voice plans than our US counterparts. Yes, we are a much smaller country but it's not like Rogers is losing money. I think the first part of the battle is to put pressure on them to stop charging the so called System Access Fee which has absolutely nothing to do with the CRTC or any government taxes but simply an extra profit grab that deceivingly makes the voice plans look so much cheaper when they are doing comparisons. First thing is to sign up for the class action lawsuit against all cellular carriers against this profit grab. Check out http://www.merchantlaw.com/cellular.html Then, we can continue talking. But it's so ridiculous. I bought my smartphone from HK because I refused to sign a 3 year contract and still have my phone locked to them. It's like I owe them my life, practically.
  13. Daniel Alper from Winnipeg, Canada writes: WOW! Is it really a surprise that a Rogers corporate executive is going to come on here to defend Rogers pathetic marketing strategies? Of course people like Taanta think the data are reasonable because they DON'T have to pay for them! They browse on their Crackberries til the cows come home. Do any of you higher ups have any clue as to what you've given your retail sales reps to work with? Pretty much nothing.....I get work with this nothingness everyday. Granted, I don't work for Rogers or any of its agents, but all wireless carriers are the same when it comes to data. Whether they get it or not, wireless data applies to ALL customers, not just business with big $$. That's why RIM made the Pearl, a consumer oriented device to stimulate market growth in BB users. That's why Motorola built the Q, device makers are trying to get regular consumers to experience the beauty and convenience of wireless data. But this attempt in Canada is being thwarted by the regressive thinking of the carriers. It really said something when RIM publicly aired its grievances toward Canadian wireless carriers citing that RIMs growth Canada has been stunted because of this thinking. How can one truly experience the Blackberry when they have 10 MB for the month! You can burn that in several hours of usage. And they invest huge capital into creating 3G networks so only a fraction of users actually benefit from it?! Try selling this 10 MB a month to people! It's not the plans what make people go ' wow, I want this', it's STRICTLY the devices and their 'cool, functional' factors. I restate my position that this an absolutely abysmal marketing practice. A serious reality check is needed. Unlimited data on air cards are a start, but let's really push this onto mobile. Kudos to Bell for possible getting the ball rolling!
  14. Production Teams from Toronto, Canada writes: Re: Ziad Fazel

    I have been using an unlocked iPhone on Rogers with no problem, it took me an hour and I am a happy camper. I hear that you are concerned about unlocking the phone with the available open-sourced hacker tools. But as an economist, one has to get past how exuberantly expensive it would be to use a Roaming AT&T package in Canada (0.59 US$ / min on a AT&T World Traveler Rates plan The Callers Long Distance bill while calling you) vs. the risk of an unlocked iPhone in Canada.

    One could argue that is how one's equilibrium in taking the risk, it looks to me that more minutes one wants to talk on the iPhone, the more 'risk-loving' one is. In my case, as a heavy 1000 minutes user, I would rather take the risk albeit small, than 590$ US a month.
  15. Ziad Fazel from Calgary, Canada writes: Thanks, Production Teams. My morning work avoidance break was timed perfectly after your post.

    I'm enjoying the competitive interaction between Apple and the hackers over the iPhone. It pushes Apple/ATT to reprice/improve their offerings when hackers lower the risk of using an alternative (my amateur economics) and reminds me of what my classmate in University went through with a hacked American satellite dish, too many years ago.

    I am going to watch how quickly the hackers overcome this first Apple update, and likely the second, before I take the chance. Open source is comforting, but I read a bit about the technical challenges each faces here, mainly centring around preventing/forcing a buffer overrun in Flash and keeping the states of 3 processors in synch.

    iPod Touch = iPhone - Rogers, which at current data rates is addition by subtraction. I wish Apple had not made so many arbitrary subtractions of other PDA features from the Touch, but I am enthusiastic about the survivability of 3rd party applications on the Touch. Fewer machine states in Flash to emulate, no battle with a cellco, and a lower chance of bricking my purchase.

    One thing I am sure about as a Canadian Mac user - I will never, ever, worry about bricking a Zune. @:-)
  16. Ziad Fazel from Calgary, Canada writes: Tanta, your post is both rude and self-defeating.

    You insult commentators with: 'Stating that Rogers has been 'sitting on its hands' is not just inaccurate, it is plain foolish.'

    After proving that is what Rogers is doing: 'we're ready to move forward in Canada and we're excited to continue our dialogue with them whenever they are ready'.

    So you are waiting around for Apple to ring your phone.

    Why not try to win the business from Apple:
    - Canada/US relationship is larger than Canada's population suggests
    - largest trading relationship in world, most travelled border
    - very similar culture with common radio, TV, movie, print content
    - weak American dollar provides bargain for Canadian buyers

    I think the real problem is Rogers unwilling to provide Apple a competitive data plan, like ATT and the European Cellcos have done, for fear you will lose those fat margins to your other smartphone customers.

    iPhone CDMA is coming soon, and Bell or Telus may pick your pocket while you sit around, insulting your customers, waiting for Apple to call. That was the business reason I have not renewed my Rogers contract, but after reading your post I may also be personally satisfied to switch carriers.
  17. john setta from van, Canada writes: Rogers is a stone age company pounding there cell phone users into oblivion with there out of this world prices.

    It is simple they rather just be a old boring company with no idea what would help the industry other than sucking every penny form customers and expecting them to come back.

    They have no future vision other than there own pockets.
  18. Chris Walken from Edmonton, Canada writes: @Ziad (and Taanta)

    100%. Courageous to post a comment on this hot topic, but threw himself on his sword, no? Insulting a client, no matter whether he was indeed foolish or not, but then completely failing to comment on the crux of the matter is actually pretty funny. I wonder if his superiors know he did this?

    /fire

    I sent a message to Telus today quoting the cheaper rates in South Africa, Mozambique, Italy, you name it. Probably a waste of time, but my $12/MB over the limit charge is worth it. I have my pretty new HTC and too scared to use it. The viscious circle they've created boggles the mind.

    No usage in Canada to justify lower prices = no lowering of prices = too expensive for new users = no usage in Canada to justify...hey wait...
  19. Mike F from West Coast, Canada writes: Quote:..'with more than 2 billion GSM subscribers'....Apple is evaluating which next large markets they choose to enter - Rogers President of Wireless

    This so clearly demonstrates that Rogers is out to lunch. Their President of Wireless is quoted (by their PR dept) that there are TWO BILLION GSM subscribers. Really? ONE out of every THREE people on the planet not only has a cell phone, but it just happens to be on the GSM network. Get a freakin' grip!

    This tells me that Rogers is merely trying to obfuscate the matter so they can continue to NOT offer the iPhone, and at the same time, continue to heinously overcharge wireless data users in Canada.

    I was thinking of switching to Rogers to get on board with the iphone when it gets here; not any more. I'll stick with my telus plan and go get an ipod touch. Ted just lost my $75/month.
  20. Ziad Fazel from Canada writes: Mike F, easy big fella. There are over 2.5b GSM subscribers now. Apparently grows by 1m/day. Blows my mind, too. But read on - I had several people call me about this.

    http://www.3gamericas.com/English/News%5FRoom/DisplayPressRelease.cfm?id=2982&s=ENG

    GSM has 85% of the global digital wireless market market

    http://www.3gamericas.com/English/Statistics/q220072.cfm

    but not as popular or fast growing in North America due to excellent CDMA operators, and little competition in Canada

    http://www.3gamericas.com/English/Statistics/q220076.cfm

    http://www.3gamericas.com/English/Statistics/q2200711.cfm

    Rogers only has 6.9m of the global GSM subscribers, but makes a 47% operating profit here off us Canadians.

    http://www.shoprogers.com/investorrelations/Fact    SheetQ22007.pdf

    That is why I am saying that if Rogers wanted the iPhone, they could change the game in Canada by offering a globally competitive data plan, taking business from its CDMA competition with the plan, the handset, the Apple cachet, and the easier path to HSDPA/4G. And get the growth rates and market share that GSM experiences in the rest of the world.

    But no, Rogers would rather wait for Apple to call, and insult customers in the meantime.
  21. Bill . from Western Canada, Canada writes: This is a perfect example of how journalists don't check out their information. What do editors do exactly? Somebody should check facts. Rogers does NOT, to my knowledge, have a 'similar all you can eat plan' for $100. If it did, then why would it say later in the article that an i-phone would run up $300 per month in data charges. And if they did offer an unlimited plan for $100 then it would hardly be groundbreaking news for Bell to come out with one for $75, now, would it. A laptop user who is not abusing the network can easily use 1 or 2 gigabytes a month of data. Any plan that pretends to take care of laptop connectivity needs and doesn't have this capacity is based on years old assumptions. Casualy surfing, replicating email and doing 'normal' work would easily use up 1 or 2 gigs. Kudos to Bell for coming out with an unlimited plan for $75. Shame on Rogers and Telus for not competing, and for having their reps state that the Bell plan is really constricted..which it is not. JACK - get your facts straight before you start writing about this and that. It is confusing enough without someone else who doesn't know what they are talking about adding to it. Why don't you sign up for that 'similar' package at Rogers for $100 a month. We'll both use 1.5 gigabytes and see what the difference REALLY is. It won't be similar, trust me. Of course, it'll take you a LOT longer if you don't do it in Toronto because Rogers' HSPDA high speed network is a lot smaller than Bell's.
  22. Geoff Schaadt from Ottawa, Canada writes: @Taanta

    Thank you for weighing in on this issue. It is unusual that corporate representatives engage in public discussions of this nature. So, for that, thank you.

    However, I found it interesting that you specifically said nothing at all regarding the heart of the discussion at hand. The thesis: Apple is not coming to the Canadian market because the excessive costs of data plans offered by Rogers, when compared with other significant world markets, do not provide a realistic opportunity for success due to the healthy data appetite of the iPhone.

    What is the Rogers corporate response to this specific question? Does Rogers propose that its data plans rates are in line with those of similar markets?
  23. Barry Welford from Vancouver, Canada writes: As has been pointed out, even the Rogers representative who responded above entirely avoided the question of data rates and the damaging effect it is having on market uptake of the mobile web in Canada.

    IMHO Rogers is completely wrong in its strategy. They should be growing the market aggressively while they are ahead in technology terms. That would occur with a lower pricing strategy. They would make more money and would profit from the advance they currently have over the competition. What they are adopting is an accountant's approach rather than a marketer's approach. When they see the light, as they assuredly will at some point, they will have lost massively in financial terms and will have allowed the competition to catch up and be breathing down their necks.

    The present Rogers pricing policy is bad for them and bad for the Canadian mobile industry.
  24. Richard R from Canada writes: It comes down to End User Experience. Current trademark issues aside, I'm sure Apple is reluctant to negotiate because of the Data Rates. Jobs wants a consistent user experience for everyone, and that something you can't have if you're afraid to use features because of running huge data bills, who wants a neutered that they have to worry about finding hotspots to use all its features all the time. Thats not the intent. In the UK where EDGE is scarce but Wifi is prevalent Apple and their UK cell phone provider partnered with the nations largest WiFi provider to ensure you can use all the featurs of the iPhone for the majority of time.

    Bottom line, Rogers Data pricing scheme makes most of the iPhone features too expensive to use. But we know the Cell Companies and Rogers likes to stick it to the consumer that's why there's a class action suit over System Accesss fees.
  25. Bill . from Western Canada, Canada writes: So the Rogers Blackberry customer goes into the Bell store to get a Bell unlimited data plan for his laptop. The Bell rep compares what he is paying for his Blackberry at Rogers with what Bell would charge. The guy changes his whole company of Blackberry devices over to Bell.

    Rogers does not get the money for the data plan on the laptop since they are overpriced - and Bell gets a good marketing opportunity which they capitalize on.

    ROGERS and Telus - Lower your data rates, or it'll hurt you!
  26. G. McLauchln from Canada writes: Canadians must get off their (our) behinds and BURY, I mean BURY the CRTC in complaint about the pampered climate of monopsony and monopoly they've created for communication co.s in this country. The complaints should be cc'd to politicians too. The disingenuous tripe written above by an industry 'leader,' dripping with paternalistic condescension as it is, is just par spin for the course and sickens me - so typical - heartily drinking their own bath water. These companies don't even remember how to compete and are molly-coddled Corporate Welfare Bums. Consumers are just feudal serfs in this system. Taanta's comments so indicate that they just don't get it. So much for 'the genius of the free market.' Sigh . . . Taanta wouldn't keep his job five minutes in a typical open market with that kind of bogus party-line poop as a response. Hear the cynical laughter Taanta? Those are your so-called customers, those who provide the windfall profits that pay your mortgage and stock options, laughing until they cry!
  27. G. McLauchln from Canada writes: Sorry, but this whole abuse of the paying customer has really got my dander up. There is no effective unified field theory covering the frustrations of dealing with Canadian Tel/Cable Co.s.
    But of prior importance is to back up and blame the enabling Canadian policy environment, e.g. the CRTC, for the laggard behavior of these companies. It is the CRTC that needs a severe blast of unvarnished voter vitriol over this Frankenstein they've enabled. Mary Shelly would love it!
  28. Jack Kapica from Toronto, Canada writes: I have to interject here. Taanta Gupta is a woman.
  29. Jack Kapica from Toronto, Canada writes: I should also add that when Ms Gupta used the words "plain foolish," she was referring to my comment, not the comments of Rogers' customers. In short, she was objecting to what I wrote and what I concluded.
  30. Julz Sirizzotti from Canada writes: So are you saying that there is something like a GSM but its Wireless Connection card, and will be compatable to use for Bell Mobility?

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