Canadian iPhone users "unlikely" to get big price break
June 19, 2008

A new price model for data service set to be unveiled by Rogers Communications Inc. to coincide with its Canadian rollout of the 3G iPhone could mean lower data rates.

However, cell phone users shouldn't expect data rates to fall dramatically, say telecom industry analysts.

Speculation has been rife about the type of  pricing plan Rogers would adopt to support its iPhone releaseset for July 11.

At least one group that has petitioned Rogers for lower data rates has even warned of a "consumer backlash" if pricing plans for the new phone turn out to be too high.

We're paying data rates three times higher than those in the U.S., noted Tom Bielecki, an engineering student at the University of Calgary. “Our prices are worse than some third world countries."

Bielecki began an online petitionfor Rogers to reduce its data rates, which so far has got more than 6,000 signatures.

"You will see more value in our pricing as we go forward," Nadir Mohamed, president and CEO of Rogers Communications was recently quoted as saying in response to queries about projected pricing arrangements.

The company, however, refused to reveal further details.

Canadian analysts have welcomed the announcement, but predict that Canadian voice and data rates – considered among the highest in the world – will probably only go down slightly.

"I think the magic number would be at or under $75/month including voice and data. That would be the sweet spot to make more people sign up," Darren Mak, principal of DigitalWeb, an IT consulting firm based in Winnipeg.

"Rogers will probably offer higher data cap or lower flat rate fees to further boost the interest in the iPhone," said Michael Rozender, principal of Rozender Consultants an Oakville, Ont-based wireless technology consultancy firm.

"Any price cut will be minimal. It's highly unlikely that the Canadian telecom industry will allow prices to plummet," he added.

Rozender noted that Rogers' data plans are currently very expensive.
A 5GB plan can go for $100 a month, with $0.03/MB for additional usage.

"They do not offer unlimited plans with flat rates enjoyed by most users in other parts of the world. Once you go through the basic coverage, you'll be paying through the nose."

Rogers is also following the example of other providers offering the iPhone.  The company is subsidizing the price of the costly device and bringing down its $600 to $800 price tag to $199 for an 8GB version and $299 for the 16GB version with a three-year Rogers contract.

These are prices similar to those offered by AT&T in the U.S. However, AT&T has said it will offer a US$30-a-month unlimited data plan for the new iPhone.

Rozender says Rogers priority will be to recover its money for subsidizing the phone. "I don't think it will come down to $30/month."