Dave and Jay - Crazy Web Entrepreneurs

I’m going to be going a little off topic here, and this will probably resonate with our Canadian readers a bit more than our neighbors to the south. Yesterday, Telus and Bell (two of the three major cellular service providers here in Canada) announced they are talking about merging.

Obviously this hasn’t gone by government review boards, but as business user who’s currently looking at purchasing a Blackberry to take my email with me, I swear if they come to an agreement and the government doesn’t block it, I will be seceding from the country.

The LAST thing we need in the cellular market is less competition… in fact, the market is so crooked as it is, we practically need government intervention. For the benefit of the skeptical, let’s do a little examination at the costs of setting  up a Blackberry in Canada for the purpose of having wireless Internet access.

Bell Canada (28.5% market share 2003)

First up is Bell Canada, you can find a comparison of their data-only plans here. I’d imagine your time is pretty valuable, so I’ll give you a brief rundown of the prices and plans:

Plan 1: $25 per month / 4 MB of data
Plan 2: $40 per month / 8 MB of data
Plan 3: $60 per month / 30 MB of data
Plan 4: $100 per month / 250 MB of data

Telus Mobility (25.5% market share 2003)

Market giant number two is Telus Mobility, you can find a listing of their plans for the same type of service here.

Plan 1: $25 per month / 4 MB of data
Plan 2: $40 per month / 8 MB of data
Plan 3: $60 per month / 30 MB of data
Plan 4: $100 per month / 250 MB of data

No wonder they are looking at a merger, they wouldn’t have to change too much, seeing as other than a few minor differences in the associated account fees and extras, they charge the exact same prices!

Rogers Wireless (28.3% market share 2003)

Here is your last choice in Canada, and you’ll be happy to know they bring a refreshing breeze of differentiation to the marketplace.  None of their plans cost the exact same amount, but at least what they offer is different… too bad it’s significantly less data usage than the other two networks.

Plan 1: $25 per month / .5 MB of data (that’s right a measly half of a MB)
Plan 2: $40 per month /  1 MB of data
Plan 3: $60 per month / 25 MB of data
Plan 4: $100 per month / 200 MB of data

Conclusions?

If you dig into their websites, you can find other pricing structures are are eerily similar, but this was one of the most blatant examples. This has been going on for a long time. When I was shopping for my last phone 3 years ago it really came down to what phone I liked the best, because all of their brochure voice service plans were exactly the same. We live in Canada, and I thought price fixing was illegal, but apparently the only three major cell providers (I don’t count Virgin mobile because all they offer is a pay-as-you-go type service) in Canada just happened to decide to charge the exact same amount for many of their services independently, and are as surprised as we are with the similarities.

What about the Yanks?

Just for fun, let’s look at a sample of email pricing from US cellular provider T-Mobile. Their Blackberry plans are listed here. It’s basically $39.99 per month for unlimited data on an enterprise plan and $29.99 for unlimited data on a regular plan. Why the huge disconnect in pricing?  Are the Americans so beyond us in the size of their network? Are we just a bunch of backward, moose-hugging, maple syrup slurping, flannel wearing, beaver-loving hicks? Could be, could be, or maybe there are just more cell providers in the US(a few of these are international).

Summary

The 3 major cell providers in Canada are price fixing on some level, and the government needs to step in and do something about it already.

Market share data source