Tuesday, November 6, 2007

Our Dollar May be Stronger, But Wireless is no Bargain - Will the iPhone Come to Canada?

Here's another post I've been wanting to write since coming back from VON, and I'm glad I waited. Anyone who knows me is familiar with my seemingly odd habit of hardly ever using my cell phone when I'm on the road, especially in the U.S. I know it defeats the purpose of have a mobile phone, but I seem to manage just fine.

While Americans take it for granted that cell phone usage is practically free, that's far from the case in Canada. I may seem like a voice in the wilderness when I try to explain this when I'm in the States, but now I've got some great backup to support my story. I've got two items to share with you on this front, and if you're wondering about the high cost of cell phone service in Canada, you'll find these well worth reading.

First is a terrific post from Friday by colleague and fellow Canadian blogger, Alec Saunders. Alec and I were at VON last week in Boston, and he's a much better technology adopter than me. We're seeing a proliferation of mobile VoIP solutions right now - I've posted about some, and Alec has posted quite a bit more.

Alec's post is a great case study in how a Canadian can use these various solutions to keep their cell phone costs down when travelling in the U.S. Most travelers routinely get local SIM cards to reduce their mobile costs, but as Alec explains, you can take the savings to a whole other level by using solutions such as Mobivox and Truphone. He's got the right idea here, and I plan to follow his lead when I travel next to the States. Great workaround, Alec!

On this note, by the way, I'll steer you to a panel I moderated at VON last week about adding mobility to Skype, which Alec attended. Mobivox, Truphone and others provided a rich perspective on the various ways you can cut mobile costs with Skype. These are all companies to watch, especially iSkoot, who is partnering with Skype on 3 Skypephone, which just launched last week.

Secondly, there was a timely article in today's Globe & Mail about the iPhone's pending launch in Canada. The article brings to light a number of issues that illustrates how the market up here is different, and how the iPhone would be a very expensive proposition based on our existing rate plans.

The print edition of this article provides detailed comparisons of rate plans for Canada, the U.S. and the E.U., and you'll just have to take my word that Canadian rate plans are simply not competitive. You can be sure that Apple is concerned that our expensive service plans will dampen demand for the iPhone, especially when Canadians can see how much cheaper it is to have all these goodies in the U.S.

So, we may have a stronger dollar right now, but this is not a great market for something as game-changing as the iPhone. Apple is setting a precedent for a handset vendor to dictate market terms to the mobile operators, and it will be interesting to see how Rogers plays this card. Regardless of how it unfolds, this article is a big picture exclamation point on what's driving Alec Saunders to do what he's doing - and you can be sure that others will follow.

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ipcom said...

Posted by: PhoneBoy

Alec Saunders explained the whole thing to me over lunch. It boils down to the fact that Rogers is raking in the dough and the other two providers can't lower their prices or they'll start losing money.

ipcom said...

Posted by: Moshe Maeir

As I commented on Alec's informative post (http://flatplanetphone.com/wordpress/?p=370), there is a small problem -- a lot of people (especially if someone else is paying their phone bill) are lazy. You need a solution where you dial normally and the call goes out in a cheaper method, without any customer intervention. That will be big.

ipcom said...

Posted by: Shai Berger

I heard an interesting comment at one of the VON panels (I forgot which one) from Brough Turner

The gist of it was...

Now that there are nearly 200 countries with cell phone service, some interesting patterns emerge. Competitiveness in both features and price don't start until there are 3 nation-wide carriers. And things don't really heat up until there are 4.

So, we're "one short" in Canada, at least. I would say we're even further behind because we have only one GSM provider.

The only answer is to allow foreign competition.

I wrote about this here:

- Shai

ipcom said...

Posted by: Peter

I am in the US. My son is attending school in Canada at U of W, my alma mater. We are looking at wireless for him and the prices seem quite high compared to the US. We are trying to find a plan that includes long distance to the US (in and out) plus text messaging (approx. 800 messages/month)and other usual features. Can anyone give me some direction???? I have been long out of Canada and I am not familiar with the different carriers. My email is pczarny@airmail.net - any help will be appreciated.