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The summer launch of the iPhone in Canada was supposed to be a time for Rogers Wireless Communications Inc. to celebrate. Instead, the company with exclusive rights to the hottest new tech gadget finds itself on the defensive, stung by public criticism over pricing.
Rogers should be basking in the glory, riding the Apple Inc. wave of wireless hipness, in addition to readying itself to enjoy a profit windfall from customers who get hooked on new services, such as Web browsing, e-mail and video streaming.
But some consumers who are looking at annual fees that could easily exceed $1,000 are crying foul, noting that Rogers' pricing plans are more complex and expensive than those offered in the U.S. and many other parts of the world.
For example, for $75 a month, Rogers provides 300 weekday voice minutes, 750 megabytes of data and 100 text messages. In the United States, a customer gets 450 weekday voice minutes, unlimited data and 200 text messages for the same price.
Rogers is one of a few phone companies that does not offer unlimited data plans on the iPhone. That means customers may get a shock on their monthly bill if they exceed their quota of Web pages, e-mails and other information.
The complaints about Rogers have stoked old memories of how the media giant once ran roughshod over subscribers.
Consumers need to familiarize themselves with the value of a megabyte, the unit Rogers uses to define its plans. Pricing plans are different in the United States than in Canada for a variety of reasons, and the launch here of Apple's biggest invention since the iPod puts the whole price comparison under the microscope.
"Whenever anything Apple-related happens, it brings out passion in everybody," said marketing consultant Luke Sklar of Sklar Wilton & Associates.
In less than a week, more than 20,000 names were gathered on an online petition protesting against Rogers' pricing plans before the website went down on Wednesday owing to technical difficulties. The cost of the Canadian iPhone has also been a favourite gripe subject on tech sites.
"Rogers hasn't had the greatest history of being truly customer driven. But I can tell you that they have made some remarkable improvements in the past few years," said Mr. Sklar, whose clients include both Rogers and The Globe and Mail.
"It's just not a responsible business decision for Rogers to blow up all its data pricing. But it has sharpened its pencil. It is watching this very closely. If this starts to truly negatively affect significant opinion — and you have to be careful about 5,000 on a blog versus what's really meaningful — we will be on top of this thing to ensure that we manage that tension between responsible pricing and not [upsetting] customers."
Rogers has outflanked its rivals, Bell Mobility Inc. and Telus Corp., by bringing the newest technology to market first and by canny investments in network upgrades. It's not going to give away the farm to satisfy some Apple diehards, he said.
Rogers is using the iPhone as a flagship product, and one that, when combined with the company's promotion of Facebook applications and other teen-friendly services, helps position the telecom giant as "hip and cool" in the eyes of consumers, said Michelle Warren, a senior analyst with Info-Tech Research Group in London, Ont.
Years ago, Rogers' cable division provoked a consumer revolt when it introduced negative option billing, a process that charged subscribers for new specialty services unless they opted out. The message from the company today is very different.
"We take customer feedback very seriously," said Liz Hamilton, a Rogers spokeswoman. The company says it stands behind its pricing plans, which have been developed based on how the company thinks its customers will use the device.
To help customers, Rogers will send them a message when they are at 80 per cent of capacity and again when they have used up their purchased capacity. That is similar to how Rogers Cable Inc. notifies its Internet subscribers when they are approaching their bandwidth caps. Customers will also be free to change their plans for either more or less data, without incurring a penalty or resetting their three-year contract, she said.
