Wireless rates already rising
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Hey there, time traveller!
This article was published 18/05/2016 (2510 days ago), so information in it may no longer be current.
It only took two weeks since the announcement of Bell’s intentions to buy MTS for some wireless rates to go up in Manitoba.
This week, Rogers hiked rates on certain data plans by $5, leaving the prices the same on others but reducing allotted data.
For instance, Rogers still has a $50-per-month plan, but has reduced the amount of data use and changed the two-gigabyte-per-month rate, which was $60 for up to 2.5 gigabytes, but raised the fee to $65.
Some industry analysts and observers had warned this is exactly what consumers should expect to happen in the aftermath of the MTS-Bell deal that will see the number of competitors in Manitoba shrink to three from four.
Al Kilbride, who operates the website comparecellular.ca, said he was a little surprised Rogers took action so quickly.
“They’re squeezing a little more cash for just a little bit more data,” Kilbride said. “They are probably thinking they are giving away stuff and figure they need to get everyone up to par.”
Comparecellular.ca did a survey earlier in the year comparing the rates of similarly configured wireless plans across the country and found prices were lower in Quebec, Manitoba and Saskatchewan, where there was an existing incumbent in addition to the Big Three national companies — Bell, Telus and Rogers.
“Prices were lower because they have increased competition,” he said. “Generally, the Big Three would apply pressure and they would drop their prices and try to gain market share from the incumbent, consequently forcing rate plans down.”
Rogers’ adjusted prices are for new customers or those who are changing their plans. Those with existing plans will not see any change.
Aaron Lazarus, a spokesman for Rogers, said, “We are determined to remain competitive in the marketplace and have added a new entry-level plan and given a data boost to add more value to one of our popular Share Everything plans. Price adjustments reflect factors including investments in our network and technology that allows us to deliver superior products and services, and the cost of doing business.”
A spokesman for MTS said the company does not comment on competitors’ rates or about its own intentions on the rate front.
“As a matter of course, we don’t comment on the retail-pricing decisions of our competitors,” he said. “We evaluate our pricing regularly and, in the event we make any changes, those are communicated directly with our customers.”
The move by Rogers will likely intensify the concerns consumer advocates have already expressed about the deal that is not expected to close until the end of the year at the earliest.
Carleton University Prof. Dwayne Winseck and PhD student Benjamin Klass, who is from Winnipeg, are preparing a formal intervention to the Competition Bureau’s review of the transaction.
In a recent blog post, Winseck said, “Blessing the deal would also be at cross purposes with findings by the CRTC and Competition Bureau on several occasions last year that telecoms and TV markets in Canada are highly concentrated, while turning a blind eye to the anti-competitive behaviour that led to those findings.”
Winseck points out that Bell, Rogers and Telus were already pricing their plans $30 to $70 less than their equivalent offerings in Ontario, Alberta and B.C. to meet the rates charged by MTS and SaskTel in Manitoba and Saskatchewan.
MTS and Bell officials have argued the deal will result in more competition because it will mean there will be three strong competitors in the market rather than two dominant ones and two with less than 10 per cent of the market, because Bell will sell one-third of its new Bell MTS wireless customers to Telus.
Bell has also committed to spending $1 billion over the next five years to dramatically increase broadband and wireless Internet speeds.
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.