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Canada’s Big Three carriers have ended promotional wireless data deals that seemed too good to be true.


Canada's Big Three carriers have called time on promotional wireless data deals that seemed too good to be true, but as long lineups disappear, questions remain about whether such prices could become the new normal.

The deals, which were available for only a few days, included 10 gigabytes of data for $60 a month for customers in Ontario, British Columbia and Alberta who brought their own device. As of now, Rogers Communications Inc., Telus Corp. and BCE Inc. say the offers are done and they have no plans to extend them.

Carriers carefully monitor traffic in their stores and on customer-service lines, noting where subscribers who leave are taking their business, and analysts say the recent promotions came in response to an increased competitive threat during a busy shopping period from Shaw Communications Inc.'s Freedom Mobile. The startup carrier has recently improved its network, launched the iPhone and offered "Big Gig" deals with 10 GB of data for $50.

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Time-limited deals aimed at shoring up market share or poaching subscribers from a rival are a regular occurrence in the wireless industry. But in the past, the Big Three have typically responded to Freedom Mobile with their lower-priced "flanker" brands, and these promos came from both the companies' main brands and their discount labels. (Rogers has Fido, Telus has Koodo and BCE has its main Bell Mobility brand and Virgin Mobile.)

Over about five days, the deals spurred overwhelming subscriber demand and media attention as the deep discounts on plans regularly priced at more than $125 a month attracted crowds, overloaded call centres and put customer support representatives to the test.

Consumer and internet advocacy group OpenMedia was quick to launch an online petition asking the Big Three to make their promotions permanent: "They've tipped their hands and now Canadians know they can do better."

After this preholiday pandemonium, it is "wait-and-see time" for the incumbents, Kaan Yigit, president of Solutions Research Group Consultants Inc., said on Thursday. He notes the quarter is almost over and the carriers were probably able to prevent some of the "most likely" switchers from leaving for Freedom Mobile.

"But this has come at a cost, creating a lot of buzz around pricing and reminding consumers as well as other stakeholders like the government about data pricing," he said. "This doesn't make the Big Three look very good – or particularly consumer-friendly – and really proves the point of the importance of new players in the market. …

"I predict carriers will have some informal retention deals and very likely better-priced plans by the spring."

However, an industry source suggested the promotions of the past week are not a turning point for the Big Three, noting that the fourth quarter is always busy and that the deals were targeted very specifically at "bring your own device" customers who are no longer on contract and therefore have more freedom to switch carriers.

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BCE spokesman Mark Langton also pointed to the busy shopping season and said, "We respond to promotional action in the market and have our own holiday offers at Bell Mobility and Virgin now and during Boxing Week. We have other offers on now and there will be more through the rest of the season."

Rogers also cited the holidays, and spokeswoman Sarah Schmidt added: "We'll continue to offer time-limited promotions to meet the different needs of our customers."

Telus did not respond to a request for comment on Thursday.

The Big Three are keenly aware the federal government has been watching the telecom file more closely over the past year, pushing for more affordable prices and competition.

Last week, the Department of Innovation, Science and Economic Development published an annual pricing study that claimed some credit for prices dropping for certain low-use and mid-use wireless plans. It also noted that wireless prices are lower in provinces with strong fourth players, such as Saskatchewan with SaskTel, and Quebec with Quebecor Inc.-owned Videotron Ltd.

Freedom Mobile may not have benefited much from the flurry of deals it sparked as BYOD customers seized the chance to get better prices from their existing carriers, who have stronger networks with better coverage.

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"The promotion from the Big Three indicates that it will not be easy for Freedom to get subscribers, even with lower-priced Big Gig plans, and we believe that this promo reflects the Big Three's willingness to use their multitude of brands to limit Freedom's momentum," Scotia Capital analyst Jeff Fan wrote in a report on Thursday.

"In our view, Freedom is not just fighting against three brands but effectively up to nine brands," he wrote, referring to the flankers and prepaid brands Chatr (owned by Rogers), Public Mobile (Telus) and Lucky Mobile (BCE).

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