MobileBlog

News and views on the Canadian telecom industry, and tips and tricks for saving on your cell phone bill.

Saturday, March 6, 2010

Canadian Telecom: Burn It Down, Then Build it Up.

In Response to: CBC.ca's "Telecom Ownership Rules May be Loosened"

http://www.cbc.ca/technology/story/2010/03/03/throne-speech-technology.html

As Canadians, we expect, are aware and appreciate the natural challenges that building truly 'national' programs and organizations in this country present. This is what MacDonald's National Policy was all about: to build a railway from sea to sea. A crowning accomplishment to unite the country with a system of transportation to mobilize people, goods and ideas.

It didn't matter whether one was in Capreol, Ontario, Melville, Saskatchewan or Vancouver, British Columbia. The same rail bed had to connect from coast to coast independent of population density and populations served. Stemming from that initial challenge in the infancy of this country have come similar examples of companies investing heavily in order to service the country.

Since then similar reasoning has been applied to justify a single postage rate 'zone' in Canada. The argument being that a letter going from Toronto to Hamilton ought to cost the same as a letter going from Vancouver to Yellowknife: Simply put: You shouldn't be penalized for where you chose, or didn't choose to live.

We have come to expect with our national airlines that flights from Toronto to Montreal and Toronto to Heathrow although artificially inflated, help subsidize the price of the fares from Thunder Bay, Ontario to Winnipeg and other less served markets. Our nationalized companies look out for the interests of not only the majority but also that of the minority.

Telecom Comes In

As one client once told me: "You gotta respect the guys who put up the telephone poles first." (When describing his loyalty to Bell Mobility despite higher prices than the competition).

When the Big Three telecom companies began this path of investing in cell phone infrastructure not just for cities, but also rural coverage Canadians accepted higher cell rates from their carriers as being the cost one needed to pay to receive truly national coverage. (To say nothing of the fact that dead spots along the 401 still exist today).

And the culprit at the centre of these high rates?

The Long Distance Concept and the Local Calling Area

Both Long Distance and the LCA have been invented to created premium pricing on wireless airtime. And somewhat incongruent to other national brands wireless airtime does penalized based on location.

An example:

One makes a long distance call from Toronto (416) to Oshawa (905). Distance: 50Kms. Wireless rate per minute: 35 cents.

One makes a call from Regina (306) to North Battleford, SK (306). Distance: 400 kms.
Wireless rate per minute: 0: included as airtime.

The difference with our wireless rates is that we are penalizing those living in the more densely populated areas with greater numbers of area codes.

Ring a bell Ontario cell phone user?

Imagine if gas cost more in the Quebec City- Windsor corridor simply because we had more towns in between.

Opening Up the Market

There was a time when wireless costs included representatives hired for customer service, new towers for coverage and other costs. However, the nature of the game is changing. Predominantly users under the age of 30 would sooner change their plan using online billing than calling a representative.

Some users don't need coverage outside of metropolitan areas, or don't need a phone to work in Capreol, ON or Melville, SK. There will still be a market for rural coverage.

However, this market need not be serviced by penalizing those calling locally within province or within a city. Competition will bring less complicated billing formulas and free up the Canadian wireless user. Reduced communication costs will help small business and entrepreneurs take advantage of this technology which Canadians have embraced but only partially with the threat of an expensive phone bill in mind.

Within the next 4 years there will be companies with unlimited plans, and those without. And the ones without will be left behind if they don't change their pricing.

Canadian Telecom: Burn It Down, Then Build it Up.

In Response to: CBC.ca's "Telecom Ownership Rules May be Loosened"

http://www.cbc.ca/technology/story/2010/03/03/throne-speech-technology.html

As Canadians, we expect, are aware and appreciate the natural challenges that building truly 'national' programs and organizations in this country present. This is what MacDonald's National Policy was all about: to build a railway from sea to sea. A crowning accomplishment to unite the country with a system of transportation to mobilize people, goods and ideas.

It didn't matter whether one was in Capreol, Ontario, Melville, Saskatchewan or Vancouver, British Columbia. The same rail bed had to connect from coast to coast independent of population density and populations served. Stemming from that initial challenge in the infancy of this country have come similar examples of companies investing heavily in order to service the country.

Since then similar reasoning has been applied to justify a single postage rate 'zone' in Canada. The argument being that a letter going from Toronto to Hamilton ought to cost the same as a letter going from Vancouver to Yellowknife: Simply put: You shouldn't be penalized for where you chose, or didn't choose to live.

We have come to expect with our national airlines that flights from Toronto to Montreal and Toronto to Heathrow although artificially inflated, help subsidize the price of the fares from Thunder Bay, Ontario to Winnipeg and other less served markets. Our nationalized companies look out for the interests of not only the majority but also that of the minority.

Telecom Comes In

As one client once told me: "You gotta respect the guys who put up the telephone poles first." (When describing his loyalty to Bell Mobility despite higher prices than the competition).

When the Big Three telecom companies began this path of investing in cell phone infrastructure not just for cities, but also rural coverage Canadians accepted higher cell rates from their carriers as being the cost one needed to pay to receive truly national coverage. (To say nothing of the fact that dead spots along the 401 still exist today).

And the culprit at the centre of these high rates?

The Long Distance Concept and the Local Calling Area

Both Long Distance and the LCA have been invented to created premium pricing on wireless airtime. And somewhat incongruent to other national brands wireless airtime does penalized based on location.

An example:

One makes a long distance call from Toronto (416) to Oshawa (905). Distance: 50Kms. Wireless rate per minute: 35 cents.

One makes a call from Regina (306) to North Battleford, SK (306). Distance: 400 kms.
Wireless rate per minute: 0: included as airtime.

The difference with our wireless rates is that we are penalizing those living in the more densely populated areas with greater numbers of area codes.

Ring a bell Ontario cell phone user?

Imagine if gas cost more in the Quebec City- Windsor corridor simply because we had more towns in between.

Opening Up the Market

There was a time when wireless costs included representatives hired for customer service, new towers for coverage and other costs. However, the nature of the game is changing. Predominantly users under the age of 30 would sooner change their plan using online billing than calling a representative.

Some users don't need coverage outside of metropolitan areas, or don't need a phone to work in Capreol, ON or Melville, SK. There will still be a market for rural coverage.

However, this market need not be serviced by penalizing those calling locally within province or within a city. Competition will bring less complicated billing formulas and free up the Canadian wireless user. Reduced communication costs will help small business and entrepreneurs take advantage of this technology which Canadians have embraced but only partially with the threat of an expensive phone bill in mind.

Within the next 4 years there will be companies with unlimited plans, and those without. And the ones without will be left behind if they don't change their pricing.

Thursday, March 4, 2010

Cellular Savings: Made Simple

Thank you for checking out MobileVantage's blog. We are your resource to help you save money on your cell phone bill. Our goal is to help you realize the value and potential in your cell phone contract.

We all know that Canadians pay the highest wireless rates in the developed world. This is all old news to us, especially those of us who are paying over $100.00 per month for the same low value plan that seemingly is all overages and no plan.

So where do you turn? The difference between adding on new features to mitigate overages versus incurring overages is marginal at best. Features that will dramatically decreases long distance charges cost over $30.00 (Unlimited Canadian Long Distance)

The best value isn't from plans that you can get in stores. Unless you are someone who is disciplined enough to call the same 5 numbers every month, the rest of us will pay the overages and just grin and bear it.

The best value comes from re-negotiating your plan by leveraging yourself into better, more affordable contracts.

Before you do this consider these 3 realities:

1) Understand Your Usage
If you only use 400 minutes per month, you likely don't need that My5 plan. Find a plan that gives you a bit of a minute cushion in case you go over.

2) You'll Catch More Flies with Honey
Be nice. The days of your telecom customer service rep being in a faraway place are over. Ask about your representative's day, who they are cheering for in the playoffs, did they watch Canada beat the US in hockey, what the weather is like in their part of the country. Believe it or not these are leveling thoughts that connect you to your provider through a humanizing relationship instead of a business one and of course.... better deals.

3) Be Open to a Contract Extension
A good deal speaks for itself. With so much volatility in the telecom sector right now your biggest bargaining chip is the contract extension. I often see friends of mine upgrading their phone and extending their contracts before they re-negotiate. Reverse the order.... Re-negotiate- then upgrade. The reason is that you gamble away your bargaining chip if you simply upgrade first. Whereas if you extend your contract for a new plan, you are still able to upgrade that phone.

More to come: thank you for checking out my blog!

Ted

Cellular Savings: Made Simple

Thank you for checking out MobileVantage's blog. We are your resource to help you save money on your cell phone bill. Our goal is to help you realize the value and potential in your cell phone contract.

We all know that Canadians pay the highest wireless rates in the developed world. This is all old news to us, especially those of us who are paying over $100.00 per month for the same low value plan that seemingly is all overages and no plan.

So where do you turn? The difference between adding on new features to mitigate overages versus incurring overages is marginal at best. Features that will dramatically decreases long distance charges cost over $30.00 (Unlimited Canadian Long Distance)

The best value isn't from plans that you can get in stores. Unless you are someone who is disciplined enough to call the same 5 numbers every month, the rest of us will pay the overages and just grin and bear it.

The best value comes from re-negotiating your plan by leveraging yourself into better, more affordable contracts.

Before you do this consider these 3 realities:

1) Understand Your Usage
If you only use 400 minutes per month, you likely don't need that My5 plan. Find a plan that gives you a bit of a minute cushion in case you go over.

2) You'll Catch More Flies with Honey
Be nice. The days of your telecom customer service rep being in a faraway place are over. Ask about your representative's day, who they are cheering for in the playoffs, did they watch Canada beat the US in hockey, what the weather is like in their part of the country. Believe it or not these are leveling thoughts that connect you to your provider through a humanizing relationship instead of a business one and of course.... better deals.

3) Be Open to a Contract Extension
A good deal speaks for itself. With so much volatility in the telecom sector right now your biggest bargaining chip is the contract extension. I often see friends of mine upgrading their phone and extending their contracts before they re-negotiate. Reverse the order.... Re-negotiate- then upgrade. The reason is that you gamble away your bargaining chip if you simply upgrade first. Whereas if you extend your contract for a new plan, you are still able to upgrade that phone.

More to come: thank you for checking out my blog!

Ted