Telus Corp. is dropping its activation fees in a move aimed at appealing to consumers fed up with numerous and confusing telecom-services fees.
Telus, based in Burnaby, B.C., said Monday it will no longer charge new customers a $35 activation fee. It will also nix a $25 equipment exchange fee for renewing customers who buy a new device.
The decision will help Telus keep pace with increased competition in Canada's wireless sector but doesn't signal the start of a customer-friendly wireless era, observers say.
Indeed, beginning Nov. 1, the national wireless, Internet and TV provider said it will begin charging $10 for SIM cards to cover the product cost that was previously part of renewal and activation fees. A new SIM card is only required when customers don't already have a compatible Telus SIM card for their handset.
The changes come after the launch of new wireless companies such as Wind Mobile, Mobilicity and Public Mobile, which have charged into the market offering unlimited talk-and-text plans, as well as cheaper rates for wireless smartphone data.
Still, Canada's wireless industry remains dominated by three, established national players: BCE Inc.'s Bell Mobility, Rogers Communications Inc. and Telus. These companies have more marketing dollars, wider network coverage and the ability to tweak their wide array of fees at will.
But Telus in particular, with its "future friendly" advertising of cuddly animals, has tried to stay ahead of regulators and political attempts to curb fees. Last year, Telus slashed its roaming rates by about 60 per cent. Previously, as provincial politicians across Canada considered a number of steps, the firm moved to "unlock" cellphones that allowed Telus customers to pop in new SIM cards when they travel abroad.
The changes Telus announced on Monday create a slight saving for consumers, but nothing material in the long run, says Iain Grant of telecom consultant SeaBoard Group. And Telus is simply matching what some of the new, lower-cost entrants have already been offering, he said.
"The way to this has already been paved by the new entrants [such as Wind Mobile]," he said.
Telus said in its news release it is the first of the established brands to cut activation fees but it can't boast it's the first in the business, Mr. Grant said. "Once again the incumbents are taking a leaf from the challengers' book."
Mr. Grant says the decison by Telus isn't likely to woo many new customers but is a step in the right direction.
Whether or not Rogers and Bell decide to follow Telus's lead isn't clear, telecom consultant Mark Goldberg said.
The Telus announcement comes a week after the Canadian Radio-television and Telecommunications Commission said it will hold public hearings on a proposed new national retail code aimed at protecting cellphone, smartphone and tablet users from needlessly complex contracts and misleading marketing.
With files from reporter Iain Marlow
Editor's note: An earlier version of this story incorrectly attributed comments to Mark Goldberg. The comments have been removed.