Canadian Carriers: No Deals for You
The Globe & Mail is reporting it’s been a whole month since Canadian carriers have been able to set their own prices without regulatory approval but, lo and behold, they haven’t dropped their prices at all.
Should anyone be surprised? Come on, we’re talking about an industry battling against the cable hordes for the hearts and wallets of local telephone customers.
Given local service is seen as the cornerstone for multi-service bundles, the last thing you’d want to do is raise prices. That would just piss off your customers and play into the hands of the cablecos, who would happily waste little time pointing out the fact.
Truth be told, the carriers will be hard-pressed to raise prices even though a $1/month increase by Bell Canada, for example, would boost annual sales by $150-million. There’s simply too much choice right now. In fact, the biggest challenge facing the carriers is avoiding the temptation to drop prices to slow down the cableco’s growth in the $10-billion a year local market.
This isn’t exactly the economic landscape Bell’s new owners want to see as they look for ways to increase cash flow and reduce debt but after decades of industry regulation, it is what it is right now.
