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Rogers Reveals, Part Two: Broadband Internet Prices to Increase, Unlimited Plans "Short-Sighted"

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Thursday July 25, 2013

While much of the focus of yesterday's Rogers quarterly call was on the wireless sector (see part one on roaming rates), it should be noted that company executives indicated that consumer broadband Internet prices - which the OECD recently reported were among the ten most expensive in the developed economy world - will continue to increase. Moreover, the company called unlimited bandwidth offers "short-sighted" and recent price increases just one step in the efforts to monetize broadband services.


In response to a question from an analyst who noted that Internet pricing keeps going up every year, Robert Bruce, President of the Communications Division, stated:

The other important thing that I think we should say about Internet is, it is the key to the future of our business, hence, monetizing the increased bandwidth usage will rapidly become the future across all our businesses, whether it's wireless or wireline. So there is -- there are clearly some unlimited offers out there. We think they're fairly short-sighted as Internet is the future of the business. And the reason that we think over time there is more pricing upside in Internet are all the things that we're doing to build the superiority of the Internet. And you will have seen many of these things. Virtually, all our customers in the past 6 months, we've up-speeded them significantly. We've invested in verifying speed consistency with the first Canadian ISP to use SamKnows, which is an internationally recognized methodology, to ensure that we're actually delivering the speed that we commit to deliver at peak times and at all hours throughout the day. And we believe that customers are looking for this kind of transparency. We've launched things like TechXpert so that we can give premium technical support to our customers. We've removed all our traffic management processes. We have significantly enhanced the value of this product, and overtime, it is our plan to monetize it accordingly and the price increase that you would receive in the mail would've just been 1 step in that monetization that we think will continue as Internet becomes the backbone product in the home.

The description of unlimited Internet plans as short-sighted are telling, since Rogers currently offers such a plan. Why is Rogers engaged in pricing its own executives describe as short-sighted? The Rogers offers was merely a response to a Bell offer. If the Bell offer disappears, so will the Rogers plan. With limited competition, favourable pricing plans will come and go, with executives anxious to increase prices and implement usage caps. The only solution is sufficiently robust competition that all players are continually forced improve service and keep pricing in check in order to retain and attract customers.

Rogers recognizes how dependent the public has become on the Internet. While the company points to improvements in its services, the OECD data shows that most countries are continually improving their services, yet stronger competition dictates that prices do not necessarily follow. Canada already has some of the highest broadband prices in the world and, given the lack of competition, Rogers is telling the investor community it sees the potential for even higher prices and usage caps.
Comments (11)add comment

Kevin said:

How can they still claim the market is competitive?
Isn't competition supposed to drive prices down? This is the exact opposite.
July 25, 2013

M E said:

It's not competition it's an oligarchy
And they can claim whatever they want. How much do you think Rogers and Bell spend to lobby the gov't?
July 25, 2013

BillWho said:

Bye Bye Robbers
I was with these clowns for the better part of 20 years. They finally screwed me hard enough to look elsewhere and now I'm happy with TekSavvy. After I cancelled Robbers cable Internet, no less than 5 different drones called me over the next 5 days to ask if they could earn my business back. I told them all specifically where to go, and said that if they hadn't screwed me so hard to begin with, they wouldn't need to try and lure me back now. I now get 3x the cap for 2/3 the cost (1/3 if you consider Rogers super-expensive overage charges) A no-brainer. I cannot recommend enough that everyone quit Robbers and go with the small providers.
July 25, 2013

David said:

...
So if I'm reading this right, they're basically saying that they're too stupid to actually innovate, and so they intend to save their business by exploiting their near-monopoly on cable Internet delivery to price gouge a service upon which more and more people and businesses are coming to rely.
July 25, 2013

need2ride said:

competition
Never mind restricting Version on wireless I say allow them to offer cable and internet services as well. Its time Robelus figured put what life is about.
July 25, 2013

BillG said:

...
It's pretty thinly veiled. Increase customer's internet speed so they get used to a better Internet speed. Then monetize their increased usage. The biggest crime is the creation of a false sense of scarcity with Internet bandwidth. Google is disproving this in the US by shaming ISPs to offer much higher speeds.
July 25, 2013

Simon said:

Municipal broadband
I would love to see some serious municipal broadband projects in Canada. Fast, stable Internet connectivity is so important to a economy now that it's a good investment to make.
July 25, 2013

Peter Blake said:

Bite the Hand that Feeds You
Rogers doesn't know how to compete or adapt so they rely on old school business tactics. Biting the hand that feeds you is suicide.
July 25, 2013

Bob Bobson said:

Rogers Makes the Poor Pay for the Rich
I’m not surprised that prices are going up (they never stopped).

What Rogers does is to make everybody, including poor people who subscribe to the lowest tiers, pay for them to “improve” the network so that they can offer faster speeds so that the small handful of rich people who can afford the top tiers with faster service.

In other words, instead of making the rich people who want unnecessarily fast speeds pay for the fast speeds, they make EVERYBODY pay for it. If Rogers wasn’t such trash, they would have everybody pay for whatever they get.

Of course not many people need or want 100Mbps, let alone 1Gbps, so the real reason that Rogers is making everybody constantly pay higher and higher prices so that they can increase their tops speeds is actually so that they can use it as a status symbol and brag about having the fastest network.

This is not a surprise either. Rogers already makes customers pay for all of their toys (sports teams, arenas, etc.) instead of paying for them out of their own pockets/profits, so why shouldn’t they make customers pay for their shiny “fastest” badge (were one to actually exist).

I too will be switching to Tecksavvy for Internet and Phone. Why should I pay Rogers $85+ per month for slow, unreliable, barely, rarely working service with a 60GB/mo cap and $2/GB overages (which they use many tricks to ensure occur no matter what you do) and a landline with no features when I can pay Teksavvy $46 for a reliable connection with 300GB/mo (nights are free and unlimited), and a landline with a free feature?

I’m not insane, so I have already started migrating all of my Internet accounts that I registered with my Rogers email address to a Gmail/Outlook address. (Incidentally, I have proof that Rogers sold and/or leaked through poor security at least two of our email addresses to spammers because they were never used.)

I’ve heard bad things about Bell, but we’ll switch to them for TV because it will still end up cheaper and with better service than Rogers.

As for contracts, DON’T DO IT! There is absolutely ZERO reason to enter into a two or three year contract with Rogers. They may say that they will give you a lower price if you do it, but they do not honor contracts. They will raise the price and cut and reduce the service (assuming it works in the first place) every single month with impunity. Yet if you dare to try to switch, they will levy a huge early-cancellation fee on you.

Therefore, there is NO incentive to make a contract with Rogers.
July 29, 2013

Mike said:

Rogers is a nightmare and scammers
Rogers ripped me off a few dollars a month so I left them but they charged me an extra month for phone and internet. Eventually they sent a collection agency after me but after 2 years I had enough and I wrote an email stating if they didn't stop I would take them to court. I haven't heard from since that incident.
August 06, 2013

Atif said:

Thanks
This is the great info to share about rogers

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March 12, 2014

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