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.