Canadians Blast iPhone Pricing

Rogers Communication Inc.'s unpopular voice-and-data price plans for the 3G iPhone in Canada could steer consumers to other devices this summer, experts say.

Alterative devices could include RIM's BlackBerry Bold and Samsung's Instinct smart phone.

The Instinct -- which Samsung announced in Canada last week -- closely resembles the iPhone in looks and specs. In the U.S., where both devices are available, contrasting them is commonplace and many videos offering spec-by-spec comparisons have been posted to YouTube. The device will hit the Canadian market later this summer.

Meanwhile, with the official Canadian release of the 3G iPhone a little more than a week away, protest is mounting online against Rogers recently unveiled service plans.

Despite the outcry, however, telecom experts don't expect Rogers to scale back on pricing, but say the carrier will adopt a "take it or leave it" stance.

"I don't think Rogers will make any changes to their pricing plans," said Robert Fox, telecom expert and principal of Fox Group Consulting in Mount Albert, Ont.

And if Rogers proves to be intractable, "this could be an opportunity for Bell and Telus which will be offering the BlackBerry Bold sometime this summer," the analyst aid.

She said the Bold is packed with multimedia features that "comes pretty close" to those of the iPhone.

Last Friday, Rogers and its Fido wireless unit announced that they would be offering voice and data plans ranging from $60 to $115 a month for the iPhone, which will hit store on July 11. The plans include free WiFi access at Rogers and Fido hotspots.

The $115 plan includes 800 weekday minutes for voice calling and unlimited time during evenings and weekends. Users can send 300 text messages and get 2 gigabytes of data storage - enough to hold 1 million text e-mails or 16,000 Web pages or 7,000 photo attachments, according to Rogers.

The price plan met with widespread online criticism -- mostly from Canadian consumers -- who bristle at the fact that U.S. carrier AT&T offers the same 3G iPhone with an unlimited data plan costing a mere $30 a month in addition to voice plans starting at $39.99 a month.

Recently, several online petitions and Web sites airing user complaints about Canadian cell phone rates have sprung up.

At RuinediPhone.com, for instance, more than 17,500 individuals have expressed indignation over Roger's iPhone service plans.

"Rogers, those prices are outrageous," writes Denis Fontaine, a signatory to the RuinediPhone petition. "Lower your prices and then I will think about it, but until then NO THANKS not a chance..."

"Get a clue Rogers! This is outrageous. When will Canadians finally take a stand against Rogers...first high prices, then no rollovers, and now these outrageous iPhone deals, and a 3 year term? Get with it! We're far behind in the cell phone world, far behind 3rd world countries...," writes Josh Alexander, another signatory.

"Greedy Greedy Greedy...," was all Tim Chiang cared to say.

ITBusiness repeated attempts to speak with Rogers have so far met with no success.

The outrage we're witnessing online is a barometer of consumer contempt for Canada's monopolistic telecom market, another technology analyst says.

"People are really ticked off," noted Carmi Levy, research analyst and senior vice-president of Toronto-based AR Communications Inc.

He said the iPhone launch was a golden opportunity for Rogers to introduce more attractive payment structures, but the carrier regrettably chose to ignore consumer needs.

He too believes users may opt for the BlackBerry Bold if vendors offer a better deal on the RIM device.

High pricing plans here arise from the hegemony of a few big players in mobile phone market, Levy said.

Other carriers pricing plans for the BlackBerry are within the same range as those Rogers has announced for the new iPhone, the analyst noted.

The carriers' strategy, he said, "has always been to squeeze as much profit as they can from early adopters before introducing any price drop."

Levy expects the situation to remain the same until next year when winners of the government's broadband auction are announced. "Rogers and other carriers will hold onto current price structures until new competitors enter the market and start offering lower prices."

Fox agrees. "Rogers has the monopoly on the iPhone here and is confident the iPhone's appeal will win over users."

She said the Canadian telecom company has traditionally led the market by introducing superior technology rather than attractive prices.

The iPhone will appeal mainly to consumers or business users who will want one for family use as well, said Fox whose company provides telecom advice to large enterprises and SMBs.

"Most of our clients say they are likely to stick with their BlackBerries because their networks are heavily invested into these devices."

Canadian iPhone users might still get a crack at lower prices though, if Apple decides to offer its new phone to other carriers, said Fox.

While the 3G iPhone currently runs on GSM networks, Fox said Apple can easily replace the GSM chip in the device with an EVDO (Evolution-Data Optimized) or 1X chip so non-GSM carriers -- such as Bell and Telus -- can run the 3G iPhone on their networks.

"This is a fairly straightforward procedure that has been used in the BlackBerry and other cell phones."

For now, users would have to bite the bullet, says AR Communication's Levy.

"This is the price we pay for fostering a monopolistic market. We've seen this thing happen with the BlackBerry before and we'll see it with other devices until real competition comes around."

Another industry observer offered a significantly different perspective.

Too much emphasis has been placed on the need for unlimited data, according to Darren Mak, principal of Digital Web, an IT consulting firm based in Winnipeg.

"I currently have a 1GB data plan for $60/month with Rogers on my iPhone and it is more than enough as long as you use the phone for what it's supposed to do."