What’s Reasonable for the iPhone, Rogers?
Update: ehMac.ca appears to have got hold of an e-mail being sent to stores that will sell the 3G iPhone in Canada. The data packages looking surprisingly reasonable:
- Consumer Data Plan (must be added to qualified voice plan): $30 - Unlimited Data (E-mail/Web), includes Visual Voicemail when subscribed to any voicemail service.
- Enterprise Data Plan (must be added to qualified voice plan): $45 – Unlimited Data with personal and corporate e-mail, web, includes Visual Voicemail when subscribed to any voicemail service.
For consumers, it looks like the iPhone will cost you about $80 to $90/month, including voice service.
One of the great mysteries of the Canadian wireless market is how much Rogers will charge for data plans when it launches the 3G iPhone next month.
So, it was interesting to hear Rogers COO Nadir Mohamed say that wireless prices will “evolve” as subscribers begin using their wireless phones for more than just voice, and that “you will see more value in our pricing as we go forward”.
The key question facing Rogers is how it defines “more value in our pricing”. Without a doubt, the iPhone will be smash hit in Canada but the degree to which it becomes a smash hinges on what Rogers will charge for data plans.
If it follows the AT&T route - highly unlikely - and charges $30/month for unlimited data, the iPhone will be red hot. If, however, Rogers follows its traditional worship of the ARPU model, then we could be looking at $50, $60 or $70/month plans that could include bandwidth caps.
So, what’s Rogers going to do - play nice and enjoy a wave of iPhone customers - new and existing - or be financially conservative and see how much it can squeeze from the iPhone crowd.
One consideration that Rogers will have to take into account is there’s an estimated 100,000 Canadians using cracked iPhones already. If it offers the right data packages, many of these iPhone users will come in from the cold. If not, they’ll stay in the shadows.
Another question is how big the iPhone could be in Canada. RBC Capital Markets analyst Mike Abramsky estimates 300,000 iPhones could be sold in Canada (although it’s not clear over what period of time that will happen).
In any event, 300,000 iPhone customers paying $40/month would generate $144-million of data revenue/year - as well voice revenue and loyal customers. The ball’s in your court, Rogers, what you going to say?
June 18th, 2008 at 1:09 am
My guess, Rogers will go for the $60-70 a month with caps otherwise so they don’t end up cannibalizing all their lucrative corporate Blackberry customers who are paying a fortune for their bytes.
June 18th, 2008 at 2:17 am
I think Canadians tend to go for services they see value in.
The cellphone is seen as a valueable tool and whose service is worth paying for because often cellular service can be had for less than a landline. Not to mention the convenience of portability.
Considering Rogers past trends and inability to understand that mobile data means more than “email on the go”, their pricing structure will most likely be at the upper end of the scale. At this point, we can say that mobile data is not a greater convenience than, say, landline broadband internet service, and so will not choose to subscribe to it.
An example: the number of friends I have jumping onto the BlackBerry bandwagon is astounding. Out of a group of 10 people I would say 8 have a BlackBerry Pearl or Curve. But out of those 10, only 3 or 4 pay for the $15 email-only plan, and only 1 pays for data. Like the iPhone, the hardware is seen as “cool” and feature-rich. However the service is not.
Rogers will have to seriously reconsider their ways or else Canadians will latch onto competitive ads due to come from Bell and Telus promoting their unlimited smartphone data service at their current rate of $30/month. Just like our friends over the border.
And if I’m completely wrong and Rogers does all of the sudden step into 2008 and begin offering mobile data services at competitive rates, I will only ask “What took so long!?” and “They finally figured it out just because of the iPhone!?”
June 18th, 2008 at 7:47 am
Strategically, this is an interesting fork in the road for Rogers. For the past few years, it has all been about ARPU, and getting more money from subscribers. Now, the wireless market is changing as it moves beyond ringtones and voice. Rogers has to decide what kind of business model it wants to have implement to create a win-win scenario for itself and consumers. Let’s see how creative Rogers can be.
June 18th, 2008 at 1:30 pm
Rogers is in a unique position because while lower priced data plans from Telus and Bell will put pressure on them to lower their own rates, Rogers is the only one selling the iPhone. Rogers will probably realize that a lot of potential iPhone customers will pay more each month so they can have the Jesus phone.
June 18th, 2008 at 1:59 pm
@ Oliver Dueck - Thats the sad part…
What I’m interested in seeing is how Canadians take the idea of Rogers charging them $60+ a month for a very limited amount of services. Odds are, Canadians will still pay, as seen in other instances up and till now for other Data devices. I’m quite interested in how Telus and Bell will take it. I’d rather go for one of there desperate attempts to take some market-share away from the iPhone with much lower pricing. While I’d love an iPhone, if its gonna cost me an arm&leg, I’ll pass.
Also, what happens after the surge of dedicated customers and hype dies off in a couple months? Rogers usually gives pretty good incentives (albeit on a soul-sucking 3 year term) on the first month or so (Vision was a good example) and it slowly becomes of less value (less incentives, higher price) as time goes on. iPhone is just another phone on the market thats been marketed good by the likes of Apple after a year or so. Will Rogers try to continue that hype or go along with “business as usual”? Which in turn will allow Bell and Telus to jack up there rates, which is why the Canadian pricing system never changes. The telcos treat every new thing as a “promotion” so they can market in some customers for a short period of time and collect the real bonus in the long run.
June 20th, 2008 at 2:55 am
I think this will answer some questions: http://crackberry.com/rogers-new-blackberry-data-pricing
And this is only for EDGE phones! $30 for 300MB!? I’m scared to see what 3G will cost… Keep in mind at those speeds 300MB could easily be had in a day or maybe a week, depending on usage.
Good luck with the iPhone Rogers…
June 27th, 2008 at 10:56 am
If you buy the iphone from the Apple store you are paying the same amount that Rogers will be charging. The SIM card will still work in the phone and that way you don’t have to pay for a data plan through Rogers. I don’t see a point in paying so much money for a data plan through them since the iphone has wifi.