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Wednesday, 12 June 2013 16:03

Only time will tell if wireless code is good for Cdn. consumers

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Cellphone owners were likely rejoicing earlier this month when the CRTC released its new wireless code for all new cellphone and personal mobile device contracts set to start Dec. 2

At first glance the changes look positive. Under the new code, individuals will be able to cancel their wireless contracts after two years without paying cancellation fees. Currently phone owners are stuck with their provider for three years (the most popular contract of choice) unless they are willing to pay big bucks to break it.
The changes will also mean a $50 per month cap on data overage charges and a $100 per month cap on international data roaming charges.
That should translate into fewer scary bills which can be reach into the thousands if people forget to turn off their cellphones when visiting the States.
Cellphones can be unlocked after 90 days or immediately if consumers have paid for the device in full. However the code does not regulate the amount a carrier can charge to unlock a phone.
Other than the data roaming charges being capped, will any of these amendments really result in significant changes in the cost of cellular service in Canada?
Probably not.
Service providers will likely just move to two-year contracts as the standard and for consumers that means the cost of devices will likely increase. When a company offers a consumer a “free” cell phone as part of a three-year contract, it doesn’t actually mean the phone is free. The cost of that phone is built into a contract. If the three-year contract becomes a two-year contract, the price of that device still needs to be recouped, but over a shorter time period. That means the contract price may increase.
It’s also problematic that the code doesn’t regulate how much carriers can charge for unlocking phones. That could turn out to be an expensive option for consumers and do Canadians really need more expense?
In 2010, the New America Foundation’s Open Technology Initiative completed a survey on the costs and types of mobile cellphone packages available around the world.
For voice service, Canada was amongst the most expensive at a monthly fee of $38.70 for 250 minutes. The lowest was Hong Kong at $8.50 for 600 minutes.
One reason our costs are so high compared to other countries is in Canada and the U.S., customers are charged for calls placed and received. In the other countries that were part of the study, receiving phone calls is free.
Canada also ranked as expensive for text and data services. When all three services are combined, the study showed the total bill for service for Canadians to be $67.50 per month. The next highest was the U.S. at $59.99. Lowest of the countries studied was India at $12.90 per month.
It would seem if the CRTC really wanted to impact consumers’ wallets, it would have made decisions regarding packaged plans. Only time will tell if the CRTC’s decisions translate into any meaningful and real savings for Canadian cellphone users.

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Rose Sanchez

Assistant Managing Editor