Canadian Mobile Data Plans

By Jerome at April 13, 2008 20:06 Tags: ,

I've been interrogating myself a lot lately about the current state of mobile internet in Canada. I'm using my cell phone with a 25$ a month (excluding taxes) data plan for 5 Megabytes, which makes it almost useless for web browsing. Besides, using an HSDPA cell phone, I would deplete my data plan in about 5 minutes.

There's been a lot of buzz around the price of Canada data plans and the absence of the iPhone in Canada for the past year. Projections showed that using an iPhone would cost something like 300$ a month with data plans comparable to what AT&T is offering. I'm guessing that noone would be interested in paying that much to have a 500MB almost unlimited data plan. It seems that Rogers is not willing to let go of the current data plan rates to offer a service that appropriate to the iPhone.

I'm new to the Canadian environment, but for what I can tell when I sometimes hear that Canadians are not really into cell phones -- that they can live without it and do not really need it -- I have an impression of 'déjà vu'. French people had this kind of state of mind when there were only two carriers. People at that time also though they did not need cell phones. Except that it was not that they were technophics, it only was because it was darn too expensive !!

Now, prices in france have dropped a lot, and people are using a lot of services offered by the cell phone carriers. I'm insisting on the services word because I'm sensing that this is where canadians carriers are shooting themselves in the foot by only focusing on being "data pipes". They could expand their business by offering services that would be far more lucrative than only conveying data or voice. If I consider my own use of the voice plan, knowing that the person I am calling is paying the call when he did not initiate the call, makes me talk less.

Ok, there were some improvements the past few months, which Mark is pointing out, but which seem to have halted. Bell released a 7$/month plan which made Canada coming from the most expensive country for data plans to the less expensive in the world, which is a bit odd. With a twist though, it's HTC Touch only. The rest of "improvements" are crippled data plans that are only interesting if you're willing to use the internet that existed 10 years ago...

I'm guessing that breaking the monopoly will change the current state, and that the bidding for new frequencies will force existing carriers to lower their prices to keep their customer base. This is one bit of a stretch, but I'm comparing the state of the industry to the bad phase the music and movie industry is going through right now... There are now forced to understand that they can't sell their music as a product but as a service if they want to keep their business going.

The cell phone industry can be forced to do so to keep their customers, if some newcomer is not playing by the established rules by giving for instance, a flat rate of 45$/month, everything included. I'm not giving this example randomly; I'm referring to the French ISP Free.fr which made quite a perturbation when they offered for something like 45$ a month 100 TV channels, free phone calls to 100 countries in the world, 25Mbps internet, Wifi access point, and a lot more. All this with an excellent quality of service. They did not play by the established rules, and they are now the second most important player in the market and growing every day. I do not see any reason this would not happen for cell phone carriers the same way it did in France.

But maybe there is a good reason for all this though... Canada's a big "empty" space, and maybe expanding the cell coverage is not as money efficient as it is in France, or USA. I don't know all the details, so maybe I'm missing some things.

We'll see in the next few months...

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About me

My name is Jerome Laban, I am a Software Architect, C# MVP and .NET enthustiast from Montréal, QC. You will find my blog on this site, where I'm adding my thoughts on current events, or the things I'm working on, such as the Remote Control for Windows Phone.