Will the iPhone bring down wireless data prices in Canada?
From my story in today's Telegraph-Journal (B1, Innovate):
The looming Canadian launch of Apple's iPhone may be helping drive costly wireless data plan prices down for consumers and business users.
Rogers Communication Inc. will begin selling the second generation iPhone 3G in Canada on July 11 and speculation on its data pricing plan for the device has been rife on Internet blogs and message boards.
While the exact iPhone data plan pricing remains elusive, Rogers released updated data plan prices Friday for other smart phones including Research in Motion's popular BlackBerry devices.
Consumer prices range from $30 for 300 megabytes to $100 for six gigabytes of data in a month under a fixed use plan that charges additional fees per megabyte for data usage over the agreed amount. A flexible plan, which boosts users up to the next usage bracket to ensure the lowest cost possible, is slightly more expensive.
Enterprise prices are negotiated on a case-by-case basis.
Rogers president and chief operating officer Nadir Mohammed said last week during a keynote address at the Canadian Telecom Summit in Toronto that Rogers is changing its pricing plans to recognize the growing importance of broadband wireless Internet access.
"We're just recognizing and embracing mobile behaviours, mobile handsets, applications and networks," said Rogers spokeswoman Elizabeth Hamilton. "We've been building and investing in this network technology and now it's time to recognize pricing."
Roberta Fox, president of the Ontario-based telecommunications and technology firm Fox Group Consulting, said Rogers is often a trend leader in the industry.
"Rogers usually does a lot of things first, although they've always been consistently higher on their wireless rate plans if you look at them compared to their competitors," she said.
"We think because of the appeal of the iPhone, it will cause them to make a change in their strategy and do a bit more of an aggressive pricing and then the other carriers will follow."
While the introduction of the iPhone may help push data prices down for a range of devices on all of the major carriers, the phone itself may not become a dominant device in the enterprise space immediately, she said.
Fox said before the iPhone can become a serious contender for enterprise customers there will be a great deal of testing and evaluation by firms.
"A lot of IT shops are going to go look at it. A lot of them are saying 'we'd better go in and test this stuff because it's going to come in from the backdoor,'" she said. "But I haven't seen the enterprise customers making product changes to have the iPhones replace the BlackBerrys yet."
Fox said the iPhone may, however, be a longer-term threat to Waterloo-based RIM's devices.
Eamon Hoey, a Toronto-based telecommunications analyst and business strategist, downplayed the possible impact the iPhone will have on wireless data prices.
"As long as there is no real effective competition in that market, we're not really going to see any downward pressure on prices," he said. "Yesterday, the president of Rogers said they were going to move their prices down. But the prices are already three times what they are in other jurisdictions, notably Europe, so they'd have to reduce the prices significantly to be world-competitive."
