The “mobile internet” concept is a huge fraud foisted on Canadian consumers. Wireless providers in Canada have managed to convince thousands of people that that they need to be able to browse websites and check email on their mobile phones and PDAs, and then they charge them astronomically outrageous rates for doing so. Just as soft-drink companies have convinced many consumers to pay $1000/L for water that they could get from their tap for free. Prices are so totally out of line with the actual cost of providing the service that Ted Rogers is now Canada’s second-richest man.
photo credit: Dan4th
How bad are these rates, anyway? And how much higher are they than the price you pay for wired internet service at home or work? Let’s take a look.
Over the past 12 months, I’ve transferred 189 GB over my home cable internet connection (I downloaded 140 GB and uploaded 49 GB). My cable bill is $43/month, or $516 per year, so that works out to $2.73/GB transferred. Cable internet is a flat-rate service, so the more you use, the cheaper it gets on a unit basis. If I had been a light user and transferred only 1 GB per month, I’d have been paying $43/GB.
Another feature of cable internet (and likely ADSL internet as well) is that there’s no explicit limit to the amount of data you can transfer, and I’ve transferred up to 50 GB in previous months. That’s not the way it is with wireless internet.
Now let’s look at what the wireless providers charge. None of them provide a flat-rate, unlimited plan for data transfer to smartphones or PDAs. The providers do provide not-unreasonable rates ($65-$100/GB) for transfers via PC cards connected to a laptop computer – but that’s not really the mobile internet. Have you seen very many people checking their email on a laptop while standing in line at the supermarket?
At first blush, the “pay-as-you-go” rates charged by the providers seem reasonable. Why, only 3 cents per kb! The problem of course is that no one consumes data in kilobytes. That’s like saying that Nestlé will sell you water at 10 cents per thimble-full… at that rate, a small bottle would cost you $5. Similarly, we should note that 5 cents per kilobyte is $50 per megabyte, or $50,000 per GB! So these prices are actually 1,000 – 25,000 times higher than you would pay for high-speed cable internet. And guess what? The wireless providers actually use cable to move your data from tower to tower; the only part that’s wireless is the last few metres from the tower to your phone. And since they buy bandwidth in bulk, their actual cost is pennies per GB. Not a bad markup, eh?
Maybe you think 1 MB is a lot of data, and you wouldn’t possibly use that much in a month. I tracked my wireless data usage over a month using Efficasoft’s GPRS monitor. I use a smartphone that runs Windows Mobile 6, not a Blackberry, so my email program has to actually go and check periodically if there is any mail (unlike the Blackberry, which automatically just sends you new mail when it has it). I set the timer on my work account to 15 minutes and on my home account to 30 minutes, and only downloaded new headers and 1 kb of message content, via an IMAP connection. After a month, I’d used over 100 MB just checking my email and clicking through on the occasional web link in an email. I didn’t download any videos or music. Had I been paying by pay-as-you-go, my bill would have been $5000!
If you buy a data plan from a provider, your rate will will be slightly lower. For instance, you can you can spend $80/month on Rogers for a paltry 200 MB. Viewing just one graphics-rich web page (like a news site) can use up 1 MB, so that 200 MB allows you to view just 6 web pages per day on your smartphone or iPhone. And the rate for going over that limit is punitive – if you actually used 1 GB, you would pay $4280! (versus $2.50 – $50 for the same 1 GB on your home cable connection).
The situation is so bad, it’s as though the credit card companies were charging 1900% interest per month. What’s worse, the cellular data providers actively conspire to trip you up and hit you with a punitive bill. None of them provide any tools to enable you to monitor your data consumption. Nor will they send you a courtesy note when you’ve used the MB you purchased under your monthly plan. Every provider I’ve asked says they have no way to tell you how much data you’ve used. But strangely enough, they are able to measure to the kilobyte your data consumption when it comes time to sending you the bill. It’s as though you’ve rented a car in a country where none of the cars have speedometers, but the penalty for speeding is to be bludgeoned to death by police.
Some of you will defend the providers and point out that they provide “unlimited mobile browsing” for $7-15 per month. I say: read the fine print. Most of the providers will only allow you to view certain WAP sites using those plans. That is, you can’t just to go any website you want – you can only view a few, mobile, versions of some sites. And even then, only if you use the crippled little browsers that run on the tiny screens of your cell phones. If you want to use a smartphone, or PDA, or iPhone, with a real browser and a larger screen, you’ll find you can’t use these plans. And also when you look more closely, there’s language that clarifies that ‘unlimited’ is nothing of the sort, and that if you go over some unspecified limit, you’ll be financially bludgeoned when you get your bill.
Many people think these rates constitute legalized theft, and wonder how the providers can get away with it. In the neighboring US, rates are substantially lower (for instance, you can get 5 GB of internet data from Verizon for $60/month – that’s just $12/GB), and in Europe rates are lower yet. Why are we paying so much? It’s because our federal government has allowed a monopoly situation to develop. We used to have two GSM providers (Rogers and Fido), and the Competition Bureau never uttered a peep when Rogers bought Fido. As for competition between Telus and Bell, the two CDMA providers, well, they cooperate heavily in services and infrastructure, and their rates are, not surprisingly, virtually identical. Since you can’t use a CDMA phone on a GSM network, nor vice versa, there is in fact no real competition between providers. If you want to switch, you have to throw away your phone.
Another example of dishonesty practiced by the major providers is the “system access fee”, which ranges from $7-9 per month. The providers used to pretend that the government was forcing them to charge this fee – until a lawsuit, I believe – so now they’re admitting, usually in small print, that “this is not a government fee”. So what is it? Just a way to mislead consumers about the real cost of their cellular service. That so-called $20/month plan is actually a $29/month plan. It’s as though you saw a car for sale for $20k, and when you went to pay for it you are told there’s a “road access fee” of another $9k on top: your purchase doesn’t look so cheap any more, does it?
So what’s a person to do? You have several options. Firstly, don’t use your phone for web browsing! Or if you must, get your employer to pay for it (though that might get you fired when the bill comes in). Or, buy a smartphone that has WiFi, and only make internet connections when you’re in a coffee shop. Or buy the “unlimited mobile browser” plan and only use for emergency situations (like you forgot your cousin’s phone number but you know it’s in your GMail inbox somewhere). And lastly, take every opportunity you can to pester your MP to demand legislative action to end the financial rape of Canadian consumers.
Until the situation changes, the mobile internet in Canada is just another form of “stupidity tax” like the government lotteries. The more stupid you are, the more you use it and the more you pay.
Update:
Just one day after I wrote this article, there’s a rumoured leak of a set of new lower-priced Rogers data plans for PDA and Blackberrys. While I’d like to take credit for this, it’s unlikely Rogers marketing staff are reading this column very closely.
Many readers of the howardforums.com forum posting where this supposed leak appeared are already complaining that the rates don’t go far enough. But one thing these new plans would do is provide predictability, and reduce the fear of a financial bludgeoning that exists if you go over your allowed limits on the existing plans. For example, whereas under Rogers’ existing data plan you would pay $80 for 200 MB, but an astounding $4280 if you actually consumed 1 GB, under the new plan you would pay $50 for 200 MB, but only $65 if you actually used 1 GB.
Far from costing Rogers money, these new plans may actually increase its profits as people actually begin to feel they can truly use the mobile internet without fear of losing their home and their car just because their teenager got ahold of their phone for a couple of hours of downloading.
Here are the details of the supposed new plans coming March 18th 2008:
Unlim WAP = $7
Unlim Vision WAP = $7 – 3 yr term with DECF (data early cancellation fee)
Blackberry Data Plan – 3 yr term with DECF
$15 – 10MB BIS/BES ~ Tier 1
$30 – 10MB to 50MB BIS/BES ~ Tier 2
$50 – 50MB to 200MB BIS/BES ~ Tier 3
$65 – 200MB to 500MB BIS/BES ~ Tier 4
$0.05 per additional MB
Note: Everyone starts off at the $15 plan and based on usage, you move up the tiers.
e.g. If you use 11 MB, you pay $30, if you use 51 MB, you pay $50. If you use 1.5 GB, you pay $115.
Non-Rogers phones (e.g. unlocked iPhones) & Windows Mobile Data & Tethering – 3 yr term with DECF
$15 – 20MB ~ Tier 1
$30 – 20MB to 60MB ~ Tier 2
$50 – 60MB to 500MB ~ Tier 3
$65 – 500MB to 1GB ~ Tier 4
$75 – 1GB to 2GB ~ Tier 5
$85 – 2GB to 3GB ~ Tier 6
$100 – 3GB to 5GB ~ Tier 7
$0.03 per additional MB
Note: Everyone starts off at the $15 plan and based on usage, you move up the tiers.
e.g. If you use 61 MB, you pay $50. If you use 6GB, you pay $130.
Comments (24)
Well written. It’s pathetic how much they charge for mobile web browsing. With the increase of free WiFi zones, it’s no wonder everyone is going to the US to buy their unlocked WiFi capable phones. More people need to check out this article before they go web surfing crazy with their new Smartphone.
Well written.
I think I said it before. Rogers has the huge data rape. Telus gives you for $30 (and for some people with the older rate plan $15) unlimited web browsing and email for PDAs and BB. Yes there is fine print that it doens’t include streaming and the stuff like that. In other words if you stay at 1GB or lower a month then you will never hear from them. I know you clearly avoided saying anything about Telus or Bell with there unlimited plans and stuck with rogers to further your point. Data plans are reasonable for what the population of Canada is. 1-2 years ago it definitly was huge and expensive. It has come down though.
Boy I hate Rogers service, in so many ways. I just wish I had an acceptable option.
I have a Samsung U740 from Bell Mobility with a $15/mo unlimited data plan; I only mentioned the model number because it’s one of those double flip phones that offers a qwerty keyboard in landscape mode. Bell has disabled the default browser as well as the application menu (which you use to access new browsers such as Opera Mini) in landscape mode – - meaning that while you’ve got unlimited data, you’re stuck using oldschool number-key text entry! If I had a few hours to kill, maybe I’d answer an email.
There is a way around it (if you enter the application menu in portrait mode and quickly switch to landscape you’ll either get the app menu in landscape or crash the phone. If it works you can load Opera Mini.)… which brings me to my next point; the security permissions on the phone are set as such that when you run a downloaded app it is nearly unusable because of the permission prompts. Bell, being cute, also disabled the “always allow” option which proves bad faith in my eyes.
This situation is ridiculous and it’s time for a consumer revolt.
This is a problem is not limited to cell phones, and the sheeple say nothing.
I have a US phone, Pay as you go with a little known company (competition wow) on the verizen network. I paid $48 dollars no hidden fees, connection, or BS. Same phone here in the Bell store is $230 dollars plus setup and monthly connection fees. I pay .6 cents a min. I can call anywhere in the US Cali to NY and visa versa .6 cents, and no roaming fees. I was given a number kind of like a calling card came with the phone. With that I can Call Canada, Mexico and Porta Rico for still .6 cents a min. no extra fees. Oh did I mention weekends and evenings are free well, it was for a limited time.
The problem is that monopolies cannot survive without government support. Don’t look to them for solutions, they are the problem.
100%! WHAT KIND OF CHARGES IS IT?
Well written and reflects my perception of the ‘development’ Canada has gone through after arriving from Europe.
FYI, in Finland (it’s not a US state! ;)) there’re ‘plans’ where you pay as little as 1 EUR PER MONTH and you get a bill where they charge you 6 CENTS PER MINUTE, THAT’S ALL!!! Worth noting, you get all ‘extras’ (as they call them in Canada) for free: voicemail, number display (operators have to put EFFORT not to display them!), call forward and no deposits etc. Can you compare that to Canada?! No way! Here you pay stupid everything (e.g. system access) and get virtually nothing.
Moreover, what comes to voice plans in Canada, it looks like operator’s main concern is to HIDE the costs you’re about to pay since they do not provide you with minute trackers whatsoever. On contrary, in Finland you pay per second, which means you get a bill which reflects your ACTUAL usage, not some greedy ‘plan’.
I just can not understand how the government can allow ripping off their own citizens so much! It’s rural-level development and world-class PRICES :/
Hi, can somebody tell me how many people use and surf in the mobile internet? Thx. Rene
I just did a test on my laptop/pay-as-you-go rogers phone.
300 KB = $15.00!!!!!!!!!
All of 30 seconds…
All I opened up were:
1. gmail
2. my regular web-based email access
3. theweathernetwork.com
Now my laptop was probably running a few other apps that were trying to access the net as well, but I don;t think I had much running.
WTF is that? Not to mention that the pages I tried to access (gmail and a web-based email client of my internet provider) did not load at all!
What a freakin scam Rogers is
This is not related to cell phones but I’ve travelled Asia, and all their mobile “Stick” plans are unlimited. Almost 80% of the people that I know uses the “Stick”.
Why are we slow? Because Telus and Rogers is trying to steal our money from our pocket with their stupid plans.
Hi I own an Iphone that I got overseas for a song. However I don’t have a data plan because I can’t afford it. I thought that I could use it on my WIFI at home but received an incredible bill! I had to dissable everything on the phone! Whats the use of having an Iphone? Might as well talk on an old brick! One thing that occured to me was this. If the rates where more competative I would consider getting a data plan. Not that $15 or $20 dollars would brake me but for what value not even 1gig! If it were unlimited, or, say 5-10gigs per/month then I would probably buy in. How many other people are like me and don’t bother getting a data line connected? Imagine how much more revenue they could garnor if the rates were more resonable! We would all benifit if they considered more volume sales and not over charging the few. I am considering cancelling my cell phone and just getting a pager!
I know this may sound stupid…but we got to start somewhere. How about starting an on line petition to the Canadian govt ( consumer protection board, mps , whatever.)Lets start SOMETHING !! I always remember a U.S caller on cbc saying…. we canadians get exactly what we deserve — NOTHING. Why,? because all we do is talk and complain and do nothing else.We sit in the bush, scream and holler, but do nothing substantial. At least an online petition is easy and IS a start. How about a boycott of one of the cellular providers — dont renew. Just pick one (say Rogers). Even if you have to go to bell do so with the smallest contract and make sure Rogers know it and Bell also know why you go to them. Can you imagine what would happen if EVERYBODY told Rogers to stuff it. …… Lets start something other than talk
I was on vacation to Singapore and Malaysia and both countries have a mobile stick just like the Rogers Stick over here. They only charge 35 dollars UNLIMITED. You get to use the stick for free and return them back after you don’t need it. I was using the stick everywhere I go even on the island where we went snorkling.
Over here look at how much Rogers charge you. And they charge you a lot on the stick too.
What Da Heck.
Very good article. Mobile internet solutions are actually weakest parts of Canadian infrastructure for all of providers. I spent a summer 2008 in Canada and was shocked by the offers for mobile internet. Comparing to Ukraine, from where I went to Canada is sounded horrific:
No offers pay-as you go for mobile internet
No offers for roaming except Roger’s
No pay as you go roaming at all.
For example in Ukraine (3rd kind country by the way) I have prepaid mobile internet from about 4-5 carriers (2 of them are 3G networks working in different standards GSM and CDMA) for price about 1 cent per megabite and unlim 3G mobile internet for $25/month
Any of prepaid packages are valid for roaming, the only conditions are to have enough on balance
Shame on Canada’s
WINDMOBILE ——- 35 $ FOR DATA PLAN “UNLIMITED”
This is in regards to the mobile stick via Telus, as i do not need a smartphone to run me bankrupt aswell. Why is it that Canadians pay by usage instead of an unlimited flat rate? I have high speed cable internet in town at $35 a month, unlimited, but when im out at the the farm the mobile stick is the only connection option available. Why do we have to pay per usage, when we should be paying for the service only, just becuase it wireless 3G, it is still just internet, does this sound wrong to anyone? I am in complete agreeance with Bob Steacy, we have to do something about this, i dont know what, but i think anything is better than nothing!! Email me at liberty_twin_600@yaho.com and get something started. Now! Get to it.
Well written and thank you!. Not to repeat what everyone said-completely agree, but what it will take to change things around? Such a blatant monopoly and yet people are buying more and more.
I guess, cable company will be able to even block my post here if they don’ t like it?!
Last year I paid in Germany 50 Euro/month for both talk and data flatrate on my cellular. So fill the difference…
I agree with Bob Steacy.
I am going to do something.
Facebook anyone?
I hate Facebook myself but it seem like a good place to start rounding up the troops.
I live in Victoria BC Canada.
we get the bum rush on everything.
From housing prices to tax (HST anyone? look it up if you dont know)
I have had enuff of blatant abuse of cell users.
anyone got any ideas of what we should do?
I’m serious!
So true – we as consumers are so far gone with respect to what is important and what we need.
Bell recently retooled it’s mobile browser, and it’s gone from just “so so” to a downright terrible deal. I can’t believe their doing it!
I checked on getting mobile browsing for my “regular cell phone” It’s not a smartphone, the screen mangles webpages, and it’s slow. That’s a “given” with mobile browsing of course, and that’s usually why the price is somewhat “cheap”. Because it’s sort of lousy, but good for one off emails, and some light news browsing.
Well, they really dropped the ball now.
It used to be $10 for unlimited, which was never a concern because you really couldn’t use that much data with your little phone. It was much too slow, and it was very cumbersome to input things using predictive text.
NOW, they’ve raised the price to $15 a month (a 50%) increase in price, and dropped usage to 50MB a month? And you still can’t tether as that would mean you wouldn’t need home internet in some cases….can’t let you out of the $50 a month for internet at home if you are light user right! LOL
Typical business elf lords. When we could barely use their service because it stunk, they charged okay, now that we can get phones with keyboards and actually make use of it, they charge more and give less.
I give Bell a FAIL on this.
I completely agree with this and I have been saying the same thing since internet and text messaging became available on cell phones. It’s like the difference between a fax and a phone call because to make a phone call your on there for anywhere from minutes to hours but a fax takes seconds. There have been unlimited local calling plans for over a decade and on top of it they are analog converted to digital which uses a lot more bandwidth than a pure digital signal (that’s why a midi file is smaller than an mp3). A text message or an email takes a few seconds to send but base on the bandwidth usage you are being charged over a thousand times what you were charged for the phone call. Before the networks went digital it was pure analog and we still were not paying as much as we pay now for internet signals on mobile devices.
Thanks for the information..I have heard about this news and also that internet is very expensive in Canada is it true? I was wondering why so..Is it so due to lack of technology or some other reason..http://www.dsldsl.de
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