Consumers Face Barriers in Taking Advantage of Wireless Competition

As Industry Minister Tony Clement prepares to provide an update on Canada’s digital economy strategy later this month, the state of competition within the Canadian wireless sector promises to play a prominent role.  Consumers have bemoaned the dominance of the big three carriers for years, leading to complaints about limited choice and high prices.

My recent technology law column (Toronto Star version, homepage version) notes that in recent years, however, the government has begun to map out a strategy to address the competitiveness concerns.  The 2008 spectrum auction opened the door to new competitors, with many launching over the past year.  Moreover, the prospect of removing foreign ownership restrictions is gaining traction and there are indications that additional spectrum will soon be made available.

While these changes have established a market with more providers, the ability for consumers to take advantage of greater competition remains a work-in-progress. 

From a pricing perspective, the incumbent providers maintain important advantages, particularly the ability to bundle wireless, landline, Internet, and television services into a single package featuring discounted prices that any new entrant would be hard-pressed to match.

Beyond pricing, consumers face other barriers.  Many are locked into long-term contracts that far exceed the norm in other jurisdictions. Establishing term limits would require provincial intervention and would likely raise objections over interference with consumer choice.

The Quebec government recently implemented an alternative approach by establishing legal limits on cancellation fees.  The provincial consumer protection law now limits the fee to the actual discount received by the customer.  Moreover, if there was no inducement or discount to enter into a contract, the fee cannot exceed 10 per cent of the value of the unpaid services or $50, whichever is less.

Assuming consumers can get out of an existing contract, they still face the challenge of transferring or “porting” their number to their new provider.   In theory, this should be easy since Canada implemented wireless number portability, which allows consumers to keep their existing cellphone numbers as they change providers, in 2007.

However, a new report from the Commissioner for Complaints for Telecommunications Services, which addresses consumer complaints about wireline and wireless services, finds that there are significant problems with portability in practice. The CCTS says it often receives complaints from consumers who have asked to port their number to a new provider, but encounter inaccurate billing or service errors along the way.

The report identifies a host of problems including providers submitting the wrong customer information or wrong dates for porting orders as well as numbers being ported without the correct services.  The CCTS notes that the mistakes often result in delays in porting the number or in billing errors, including customers being billed by both providers for the same service.

The problems associated with number portability are not easy for an individual consumer to address, since it is not always obvious whether the error lies with the old provider or the new one.  Regardless, the CCTS sternly notes that “when completing requests to port telephone numbers, service providers have an obligation to ensure a seamless transition and must therefore ensure that all related systems are accurate and up to date.”

Fostering a competitive wireless environment in Canada requires attention to both the provider and consumer perspectives.  New spectrum and removing foreign ownership restrictions should help increase provider choice, but there is work to be done by federal and provincial governments to ensure that consumers have the ability to take advantage of greater competition.


  1. Too big to care.
    Our telco/cable/ISP conglomerates need to have greater oversight and accountability for their actions. They are not even subtle or ashamed about sticking it to the consumer. When Netflix launched in Canada, a threat to their own cable/sat on demand services, they lowered the allowable monthly internet bandwidth ON THE SAME DAY of the launch.

    That type of behavior needs to be reigned in.

  2. “Moreover, the prospect of removing foreign ownership restrictions is gaining traction and there are indications that additional spectrum will soon be made available.”

    The “ownership” doesn’t matter that much unless it’s about one of the big US telcos. Which, for example, could operate a wireless network in Canada as an extension of their US network. Like in based on the same US management, IT infrastructure, Indian call center and so on. They only have to spend on additional towers on Canadian terriotry. Which would be chump money for them at this time.

    This would clear out any possibility of competition from a Canadian or any other non-US telco. Bell, Rogers and Telus wouldn’t be able to compete even if they merge.

    So the question is – do we want to scrap them and let AT&T take over all the canadian telecom?


  3. @Crockett
    I agree, but that would actually require the CRTC to grow a backbone and challenge such things.

  4. number portability
    When I switched from Rogers to Telus, I was billed for an extra month by Rogers even though I ported out before the “next billable period”. When I phoned them to complain, they told me that porting counts as cancelling, and that they require 30 days prior notice for cancellations. I then asked if I could port my number after notifying them of the cancellation, and they said that was impossible as a cancelled account is inaccessible (which is assinine!). Then I asked the representative if there was ANY WAY to port a number and not be billed by both phone companies for a single month, and they paused, then said “NO”. If they cant at least provide a legitimate way to cancel and then port over, then its pretty obvious their service agreement is purposefully crafted to screw the consumer.

  5. I am tired of being locked in to contracts because of a discounted phone. How did we allow the phone manufacturers to retail through the telco’s??? Why can’t you buy a phone (let them compete on price!!) and join a network of choice – no contracts then…who would sign a contract? How can we allow a red phone to be sold by Rogers and a blue one by Bell?? That would be like allowing a red dress only at the Bay and a blue one only at Sears. Controlling the consumer in this way should have no part in a democracy!!

  6. @Xemm: “Why can’t you buy a phone (let them compete on price!!) and join a network of choice – no contracts then…who would sign a contract?”

    This is possible only on GSM networks that use a SIM card (not the phone itself) to identify you on the network. There is only one GSM operator in Canada – Rogers. So even if your GSM phone is unlocked (you can definitely buy them as such, try, you don’t have more than 1 operator to chose from.

    Bell and Telus use a different standard (CDMA) where they identify the phones from something similar to their unique serial number. Good luck into talking either of them to accept on their network a phone that wasn’t sold by them.


  7. @Napalm

    All of the Big 3 (Rogers, Telus, and Bell) now operate HSPA networks on the same frequencies. So a HSPA phone that works on any of the big 3, works on all of them (like my HTC Hero). Bell and Telus continue to support their CDMA networks for legacy reason, presumably.

    The big problem can be getting the phone unlocked. The carriers insist on selling us crippled phone which are locked to their networks. Bell will unlock your phone after 3 months I think, if you have an account with them, and if you are willing to pay them the outrageous price of $75. Rogers and Telus will under no circumstances unlock your phone. That leaves the consumer at the mercy of 3rd party unlockers who often, but not always, can unlock your phone.

    What we need is legislation dealing with the selling of crippled, locked phones. That’s why I would urge folks to email/write/call their MPs re the Cell Phone Freedom Act, bill C-560 (see

    And while on a rant, I’d argue we need legislation dealing with exclusivity deals. For example, I can only buy a HTC Desire from Telus – Rogers and Bell can not sell this phone. And, in addition, Telus will not sell this phone outright, you can only get it on contract. This is an incredibly anti-competition, and thus anti-consumer, situation. We should be able to buy direct from the manufacturer and/or exclusivity deals should be outlawed so that all carriers can offer whichever phones they want to offer.

    My 2 cents.

  8. @Jim R

    Totally correct. Also I would like to point out that even if you do manage to have the foresight in acquiring an unlocked handset, your options are really only open to Telus, Bell and Rogers on HSPA (Who all charge the same prices anyways). Almost all the new entrants use the AWS band of HSPA. Meaning you will almost certainly need to buy a new phone to switch to Wind, Shaw, Mobilicity or Videotron.

    It seems as if everything is stacked against Canadian wireless consumers.

  9. @Jim R
    Well put. I purchased a phone outright which was Rogers branded (and therefore locked to a Rogers SIM). When I asked to unlock it I was politely told to piss off.

    @Xemm: When you buy a phone that way you pay the same contract rates as if it was subsidized. It is difficult to find a place to buy an unlocked phone in some areas. For instance, in Ottawa I know of only one retailer… they don’t have a large selection (I am not willing to buy through Tiger Direct because I was to hold the device prior to purchase if I am going to lay down $600+ for the phone).

  10. canadian system pretty good
    Canada has among the easiest and timeliest number portability systems in the world. 1) it’s one of the few places with intermodal portability 2) you simply have to ask the new service provider to initiate the port, and a wireless port is done in 2.5 business hours.

    As a foreign example,
    The UK just sped up their process to take 1 business day, rather than two. That is how long the port takes after you request an authorization code from your previous service provider.

    In every jurisdiction the consumer is responsible for ending their previous service and staring the new one.

  11. Unlocked phones make real sense only with pre-paid SIM cards. If you’re going post-paid, then you’ll have a contract to lock you in anyway.

    If you travel a lot around the world and would like to be able to use local pre-paid SIM cards, then get an unlocked phone. If you’re staying inside Canada most of the time, get a plan and ignore the phone lock.


  12. How to do the swap
    @Dougman: The way to do a number swap without being billed for a whole month by both carriers is to switch the old account to a minimal prepaid plan prior to initiating the swap.

  13. @Comboman and Dougman
    What I did was called in and gave my 30 day notice and told them I would be porting out in the next 30 days. Once the CSR confirmed that I would be billed for 30 days service *after* my port out I told her that was not reasonable since I was giving 30 days notice (per their rules) and I should not have to pay for 30 days of service that I could not use. I then proceeded to tell her how I would go about escalating the matter (her manager, office of the president, ombudsman, official CCTS complaint) if it was not resolved satisfactorily. Probably because Rogers had already capitulated on a CCTS complaint on this matter, and because I would have made myself a PITA whose cost would have exceeded the amount we were talking about, she immediately came up with a resolution for this “problem”.

    This is one of the numerous practices of the Canadian wireless industry that I find unsavory – billing you for 30 days of service that you cannot use regardless of how much notice you are willing to provide.

    Needless to say, there should be a law governing this.

  14. Wireless seems to get all the press these days
    But the problem is in my opinion far worse in wired data access.
    Wireless data access cannot compete with wired due to inherent bandwidth restraints of the medium itself, yet it is constantly pushed as the future in the eyes of many who should know better.

    Canadians are being choked out of affordable wired internet access by the incumbents with their shrinking usage caps, ever increasing prices and anti-competitive actions, all with the blessing of the CRTC and by implication due to its inaction the elected Government itself.

    It is time to look at the Canadian problems with a world perspective, we are being left in the dust while protecting outdated media delivery methods and ensuring stable profits for our corporate dinosaurs who envisage complete control of all levels of media and communications in Canada.

    It is time to rethink where we are and where we are heading and come up with a sustainable solution that benefits the people of Canada and not just the stockholders of a few backroom dealing corporations.

    It will take political guts to pull this off, but I would be shocked if Industry Minister Tony Clement’s “Canadian Digital Economy Strategy” even hints at addressing the issue. Other countries have managed this, viable working models exist, if it takes foreign funding to bring some fresh blood in so be it.

    Let’s get it done.

  15. Lack of unlocked phones for sale
    The big problem with the Canadian wireless industry is the lack of unlocked smartphones for sale without a service plan. There is only one phone I know of that can be bought directly from the manufacturer unlocked: the Apple iPhone. For other smartphones, they can only be bought through the carriers locked or through grey-market resellers who buy them overseas and unlock them. Also, phones are frequently crippled in other ways by the big 3 – e.g. Bell disables GPS on BlackBerries and charges $10 a month to reenable it, tethering is disabled on some phones, Android phones run obsolete software which can’t be updated, can only download software from Android Market, etc. This is like if Rogers or Bell forced you to buy your computer from them to get Internet access and then banned you from doing certain things on it. Now, fortunately the big 3 will activate unlocked phones – I had no problem activating my iPhone with Telus – you lose the subsidy but you gain the ability to switch providers, cancel service, use the phone with a voice only plan or use foreign SIMs (if you know how to use a SIM cutter). The main problem is the shortage of unlocked phones to choose from, and the need to hack your phone in many cases to unlock and uncripple it.

  16. Another thing I forgot to mention: incompatible 3G frequencies. Bell, Rogers and Telus use 850/1900; Wind, Mobilicity and Videotron use 1700. Very few phones support all those frequencies, so there is a barrier to switching between old and new carriers.