Canadian Wireless Carrier Rogers 'Surprised' That People Like Unlimited Data Plans

from the surprised-by-the-obvious dept

Despite industry claims, US wireless is painfully mediocre. US consumers pay some of the highest prices for mobile data in the developed world, thanks to regulatory capture and wireless competitors who embrace "competition theater" more than actual price competition. Also contrary to industry claims, these high prices don't necessarily reflect quality; US LTE (4G) speeds are not only among the slowest in the developed world, arbitrary throttling, caps, and other usage restrictions reduce the value of these connections even further.

Up in Canada the problem is even worse, thanks to industry consolidation the US appears poised to replicate. Rogers, historically one of the more embarrassing Canadian telcos on the net neutrality front, has seen its stock drop this week after the company was forced to slash its revenue expectations for this year. The reason? Rogers, under pressure from the public and regulators, was forced to introduce unlimited data plans this year, causing a user exodus from more expensive, metered offerings that sock users with costly per gigabyte surcharges.

Rogers, for its part, was amusingly surprised by the sudden consumer interest in (relatively) straight forward wireless data plans that don't nickel-and-dime users to death:

"Enthusiasm for wireless data plans that don't charge overage fees has forced Rogers Communications Inc. to slash its revenue expectations for this year. Senior executives told analysts Wednesday that they were positively surprised that about one million customers have switched to its unlimited wireless data plans, but acknowledged that has meant less revenue from overage fees generated when consumers surpass the monthly limits."

That Rogers was surprised here speaks volumes about how in touch North American telecom giants are with consumer demand. The company proceeded to note that while it was taking a slight hit this year, the shift toward less confusing, unlimited data plans was a good thing overall for everybody:

"Chief executive Joe Natale said Rogers did an analysis before making the wireless plan change, but was surprised by how quickly consumers gravitated to the new unlimited data offerings.

"That ended up being three times the rate that we had anticipated, which I think is a good thing," Natale said.

He said the switch to unlimited wireless data plans, which began in late June, was the beginning of a "critical and necessary shift" that has three long-term advantages: higher consumer data usage, increased customer satisfaction and lower costs to acquire and retain customers.

"Overage is a big pain point for customers. Rather than continue to perpetuate that complexity, which drives all sorts of ... costs in our organization, we said 'Let's bite the bullet. Let's create a very simple construct. And let's get to the simplicity dividend as quickly as we can.'"

Granted it's worth noting that just like in the States, Rogers' "unlimited" data plans aren't truly unlimited; you'll still hit a usage cap after which your mobile data speeds will be dramatically reduced for the remainder of the billing period. Still, baby steps and all that. That said, Canadian consumers still pay even higher prices for mobile data than users in the US, thanks largely to mindless industry consolidation leading to just three major competitors. It's a trail the US is intent on stumbling down as well despite ample evidence of negative outcomes.

Filed Under: canada, competition, data caps, unlimited
Companies: rogers