Telus plans could also ‘interfere’ with customer churn: PIAC

The same week that concerns were raised about new device financing plans from Rogers Communications Inc. potentially running afoul of the Wireless Code, John Lawford, executive director of the Public Interest Advocacy Centre (PIAC), said that financing plans from Telus Corp. could also run contrary to the code. When Rogers released its plan allowing customers to finance phone handsets across three years in installments, consumer advocates said that the practice would in effect produce the same kind of three-year lock-in contracts that the Wireless Code was meant to eliminate in the first place, by prohibiting cancellation fees after two years. While the new financing plan from Telus Corp. limits its financing arrangement to two years, the company says it is giving the customer as much as $320 dollars up front, which the customer must then pay back at the end of the two year service agreement if they want to keep the phone. If they give the phone back to Telus, they pay nothing, and can then upgrade to a newer model phone. “This has definitely got some aspects that would interfere with a consumer’s ability to access any wireless market that it would help to have a used phone with,” Lawford said. “Whether it’s off side on the Wireless Code, we’ll see.” Tamir Israel of the of the Canadian Internet Policy and Public Interest Clinic at the University of Ottawa (CIPPIC), said that Telus’s financing plan was “less problematic” with regards to the Wireless Code than Rogers’ three-year options, but that it still could be seen as having a negative impact on consumers. The arrangement, Israel wrote in an email to the Wire Report, “is not ideal from a customer perspective because it forces the customer to either give up their phone or pay off the remainder of the device at the two year mark, which is artificial.” Telus’ senior vice-president for federal government and regulatory affairs Ted Woodhead said in a phone interview he is “very confident” the new financing plans don’t violate the Wireless Code, stressing that all consumers have to do to avoid paying money at the end of the contract is give back the phone. That the company’s bring-it-back financing program could constitute a “switching fee” requires “gymnastic logic,” he said. The Wireless Code says that any “early cancellation fee” in wireless contracts must be zero after 24 months. Responding to the assertion that the arrangement effectively encourages customers to stay beyond two years and upgrade with Telus because consumers would avoid the hassle of paying off the phone and starting afresh, Woodhead said “life’s full of complications.” Last week, Telus’s president of mobility Jim Senko told industry publication Cartt that the company wanted to offer a three-year financing arrangement, but that the Wireless Code prevented it from doing so. In June at the Canadian Telecom Summit, Woodhead said on a panel of other telecom executives that there was no problem with Canadian wireless pricing, though affordability of telecom services had become a political and regulatory issue over the past year. Since then, in addition to the new financing plans, first Rogers and then Telus have both introduced permanent new plans that do away with data overage fees, while other wireless companies have introduced similar promos. The CRTC is currently reviewing its mobile wireless framework, including considering whether to mandate access by mobile virtual network operators (MVNOs) to wireless providers’ networks. Woodhead said in the interview that the new financing plans don’t have anything to do with the possibility of the entrance of MVNOs to the Canadian market, and instead were due to the ever-increasing price of newer handsets. — With reporting by Michael Lee-Murphy at mleemurphy@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Telus plans could also ‘interfere’ with customer churn: PIAC

News | July 12, 2019

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Telus plans could also ‘interfere’ with customer churn: PIAC

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