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Rogers Reveals, Part One: Threat of Regulation Driving Down Roaming Costs

In 2011, the OECD released a report that found Canadians face some of the highest wireless roaming fees in the world. Some tried to downplay the findings – the National Post’s Terence Corcoran claimed that the roaming fees actually looked pretty cheap, while Rogers pointed to several packages that it said “would rank us among the lowest cost of countries surveyed.” Yet as regulators in other countries began aggressively targeting high roaming fees – EU costs have dropped 91 percent over the past six years given regulatory initiatives – Canadian companies apparently began to fear that similar regulations could make their way here. Indeed, according to Rogers, it was necessary to get “roaming in line” or face the prospect of regulation.

During yesterday’s analyst conference call, Rogers noted that its average revenue per user (ARPU) was flat in the last quarter, primarily due to new U.S. data roaming plans that are cheaper than previous offerings. Why offer reduced roaming costs?  Robert Bruce, President of the Communications Division, stated:

the roaming initiatives, which frankly we think are imperative in the long run to kind of get roaming in line, or I think we will see the same kinds of things that we’ve seen in other parts of the world where it becomes high on the regulatory agenda.

Getting “roaming in line” is no small issue. During the same call, Bruce admitted that the reduced roaming revenues from the U.S. plans amounted to more than $20 million dollars in just a couple of months. Bruce stated:

The impact of the roaming was in the range of just north of $20 million in quarter. Again, important to remember going forward that we didn’t see a full quarter of those roaming changes so that we expect that it will continue on going forward. 

Earlier this month, I discussed the potential for Verizon to shake up the Canadian wireless market based just on roaming fees. Given the dollars at stake – clearly hundreds of millions for the three Canadian incumbents merely for U.S. roaming – a new entrant focused on eliminating or reducing roaming costs would have a significant impact on Canadian consumer and business wireless bills.

4 Comments

  1. Roaming inside canada
    Remember, we already roam inside Canada, while even the FCC regulated that out. Some carrier start to offer “canada wide” but this is more the exception than the norm.

    When Rogers increased it to 0.30$/min it was more expensive than WIND US roaming at 0.25$/min.

    That’s why they are scared.

    (BTW they call it “long distance”, but that’s just to confuse people)

  2. Can’t wait for Verizon to crush the 3 big Canadian telco rip-offs that keep Canadians hostage to their Internet deals!

  3. I agree with both Kid and Hd
    The Big boy’s in Canada have been ripping us of for so many years,I can’t remember them all at my tender age of 65.
    Locking you into a 5 year contrac, that cost’s you more to break away from,than it did to purchase it in the first place is just down-right wrong! The three companys have been ripping off Canadians since before 1948 when I was born.
    They are like leeches on our society, and like the news in this county, spun they way they want you to to see it or hear it , and not the reality of it at all. I hope Verison comesin and shows them the real way to do buissnes without the gouging we get now. Good on the Gov for opening the door for fare deals on all kinds of digital udse in this country of ours. Thats my belief as a user and a citizen of this country, not someone paid by a company to put blocks in wheels of an already moving vehicle. We people of Canad deserve a fair shake, and if it has to come from another country, so be it.

  4. @RedDog

    Are you sure you are in the right country? I haven’t seen any carrier offering 5 year contracts and two of the companies you allege have been “ripping off Canadians” since before you were born in 1948 didn’t even exist then. Rogers started off as a small radio station back in the early 60′s and Telus was created back in the early 1990′s with the privatization of Alberta Government Telephones.

    You might want to check out Verizon’s prices in the US (www.verizon.com)to see how they are likely to do business in Canada. You will see that most of their prices are actually quite a bit higher than prices for similar plans here in Canada. You are more of an optimist than I am but I find it hard to believe that Verizon is going to come to Canada and offer lower prices and bigger/better networks than they do for their US customers because Canadians “deserve” better prices.