The start of something big
Jack Kapica, 01/03/07 at 3:36 PM EST
It’s a small change, but the introduction of “number portability” is shaking the Canadian telecom industry.
Beginning March 14, cellphone owners will be able to shop around for better rate plans for competing carriers while still keeping their telephone numbers. This has been available since 2003 in the United States, but Canadian telecoms have resisted it fiercely.
Now that it’s on the visible horizon, the telecoms are expecting major subscriber shifts.
In an effort to pump up subscriber loyalty, both Bell Canada and Rogers Communications Inc. have introduced new subscriber plans. Two days ago, Rogers introduced its new plan, My Home Connections, to allow its home-phone subscribers to make free long-distance calls within Canada to other Rogers wireless, land-line and Fido numbers.
Not to be outdone, Bell Canada countered late last night with the Bell to Bell calling plan, allowing unlimited local calls between Bell mobile phones and residential and business lines.
The telecoms hope customers will find these plans appealing because they allow more flexible packages depending on a user’s needs.
More rate plans are expected to come. The just-announced offerings are baby steps, analysts say, and there are many more possibilities in the telecom marketing bag of tricks.
Bell’s plan calls for unlimited calls between Bell cellphones and residential phones for $10 a month, and unlimited business calls for $20 a month. If you want to make unlimited calls between any of these three, it will cost $35 a month. Rogers’ plan starts at $21.95.
It would have been simpler just to slash prices, but price wars are usually an exercise in blood-letting, and that route is used only as a last resort. This time, the telecoms are not likely to go that way because for the first time in several years, being in the cellphone business has become profitable.
After years of offering us lowest-price phone calls and relying on long-distance charges to provide the profits, the telecoms had finally added enough new services — ring tones, e-mail, text messaging, games, photography and video, MP3 playing and so on — to boost their revenues.
But subscribers are getting wary to the strategies of charging for all these little extras — all they have to do is to look at their skyrocketing monthly bills — and demanded the freedom to change contracts in search of a better deal without losing their cellphone numbers. The Canadian Radio-television and Telecommunications Commission agreed, and thereby forced telecoms to offer more competitive packages by taking away a major club held over the subscribers’ heads.
Without the threat of stripping a customer of a familiar telephone number, the telecoms are being forced to compete by cobbling together pricing plans that will keep their customers from bolting.
But the plans are not as generous as they might seem. A lot of the extras — such as the increasingly large amount of data being transmitted to and from cellphones — are not changing, at least not for the moment. Among them, text messaging and long-distance charges will remain extra for both Bell and Rogers customers.
How profound will all this be?
Not as profound as the telecoms are suggesting by their actions. When the Americans introduced number portability the population shift was immediate, but not earth-shaking, and that market is now stable.
But it did usher in a landscape of constantly changing rate plans, which has benefited customers.