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Bell's latest price bumps are punishment for stubborn customers

Bell Canada is initiating a price increase for monthly wireless plans that it no longer offers, potentially affecting thousands of Canadians that have stubbornly held on to older offerings that, in many cases, offer superior value.

The increases, which apply today to so-called 30-day plans -- those that are month-to-month, allowing customers to leave at any time without penalty -- are between $2 and $5 per month, and will affect dozens of older deals, from days before two-year contracts and share plans.

The move shows Bell at its shrewdest, attempting to move long-time customers to new higher-cost share plans that include unlimited calls and text. But many of the older plans, like the popular "Fab 10" options from the early 2010's, included up to 6GB of data for under $60, a price per gigabyte that would be unheard of in today's market. In those days, it was voice minutes, not data, that customers mainly yearned for. But as screen sizes increased, and with it smartphone usage in general, airwave-clogging data bandwidth became the hot commodity, edging out voice revenue among the Big Three.

The move shows Bell at its shrewdest.

When the Wireless Code of Conduct was implemented in 2013, carriers began offering share plans that tied a portion of the device's subsidy to a customer's monthly plan. Want the latest Galaxy for less up front? Pay the difference over two years with an extra $20 per month. Want to save some money over the course of a contract? Buy a cheaper unlocked phone and bring it your carrier of choice. But this option, dubbed Bring Your Own Device, or BYOD, caught on quickly, perhaps more so than any of the carriers were intending.

And so earlier this year, the Big Three crawled back some of their BYOD benefits, cutting that all-important discount from $20 to between $10 and $15. While investors applauded the move -- Bell's stock is up nearly 10% since January -- customers decried the price increases as punishment for the savvy. Buying a $200 unlocked Moto G and bringing it to Bell or Rogers to save $20 per month -- $480 over two years -- fostered substantial savings. Now, that same strategy yields only $240.

With this latest price increase, Bell is once again ratcheting the pressure for long-time customers to move over to these newer plans. Though they have substantial benefits, including unlimited nationwide calls and texts, and value-added services like Mobile TV, many customers would pay as much as double for the same amount of data which, for most people, represents the mobile plan's true value.

Once the change comes into effect, Bell will also begin charging an extra cent per megabyte for data overages -- $0.06 from $0.05 -- which translates to an extra $10 per gigabyte. Customers who go over their limit will now pay $60 per gigabyte, a number that in many countries is so high as to be unbelievable.

With this latest price increase, Bell is once again ratcheting the pressure for long-time customers to move over to newer plans.

All of these moves are meant to spur ARPU, or average revenue per user, during a time of relatively slow growth, owing to a maturity in the Canadian market. Carriers must contend with the fact that they are less likely to attract new postpaid customers, most of whom are either first-time smartphone users or have transitioned from the lower-margin prepaid market, than they were just two years ago. Most Canadians already have a smartphone, so carriers are battling to keep customers, and keep them paying more. The holdouts -- the customers affected by these unilateral price increases on older plans -- are the treasure chest of untapped ARPU for providers like Bell, Rogers and Telus. Intermittently dosing the experience with friction, while teasing the benefits of these newer share plans, could be the tipping point.

Either way, starting today customers will pay more for the same service.

Daniel Bader was a former Android Central Editor-in-Chief and Executive Editor for iMore and Windows Central. 

  • Gigabytes are so expensive in the Americas. Posted via the Android Central App
  • We, and our wallets, are painfully aware. Until the Wireless Code of Conduct came into effect people would have bills in the thousands or tens of thousands of dollars. It was so bad that the CRTC imposed a maximum overage charge of $50, after which point the customer must consent to more overage charges to continue using data. Unfortunately the message to allow more charges isn't always sent to the account owner, and so sometimes children will hit the "allow" button and still rack up those $1000+ bills.
  • Reminds me of Verizon increasing the price for unlimited data customers. Posted using my Moto Maker Moto X Pure Edition on Verizon... Unlimited Data as well...Android Central App helped as well ;)
  • So how long do you think companies should wait before price increases? Five years, ten, never? Everything eventually has to go up in price. Posted via Nexus 6 running on any data plan I want
  • I don't think existing customers on old plans should have to face an increase tbh. Posted using my Moto Maker Moto X Pure Edition on Verizon... Unlimited Data as well...Android Central App helped as well ;)
  • So if you work the same job for say 10 years, would you be willing to work for the same wage all that time? Posted via the Android Central App
  • Not even close to being the same thing. Posted via the Android Central App
  • Exactly the same thing. Economics. How do you think this or any company pays someone a salary? With the revenue brought in. Posted via the Android Central App
  • Their network is mature, the price of 4g technology has gone way down, and they have a saturated market. To say it only makes economic sense to raise prices is ludicrous, you must work for a wireless network or cable company. Posted via the Android Central App
  • Exactly, the minute Verizon announced the price increase they lost me as a 10 year customer. Posted via the Android Central App
  • Here in Canada, the Big Three can all collude and gouge all they want since nobody has the power to stop them! Yay!
  • I probably would have left Rogers a long time ago but there isn't really any good alternatives. Besides Wind maybe. Posted via the Android Central App
  • Mobilicity is a good option too Posted from my Moto X 2nd gen and my Nexus 9 both on Android Marshmallow
  • Carriers want to have the highest ARPU to show investors what a great job they're doing while at the same time want customers to think they are a great value. You can't have it both ways carriers. Posted from my S7e/Note 4/iPad Pro
  • If I'm reading this right, we are complaining the bill will go up around five dollars for a plan from the early 2010's? OK then. Posted via Nexus 6 running on any data plan I want
  • While not earthshaking....think in terms of signing up for service at a certain price point and the price increasing for the same service. Would the carrier reduce the price or offer an automatic credit due to an outage? I doubt it. VZWMAIL@ECRMEMAIL.VERIZONWIRELESS.COM had unlimited and they grandfathered many customers. Yet they found legal interpretations to increase the amount Posted via the Android Central App
  • So customer should be locked in for life? Not the real world, I don't care what product or service we are talking about. Posted via Nexus 6 running on any data plan I want
  • Just the opposite if you have met the terms of your contract you continue month to month at the same rate. Why would anyone want the same level of service for MORE money? Posted via the Android Central App
  • If you can show me in the so called signed agreement where prices were locked I will agree. Posted via Nexus 6 running on any data plan I want
  • The price increase on legacy unlimited data plans at Verizon was applied only to those out of contract. They can do anything they want to you once you are out of contract - no legal agreement binds them, only what the market will bear. I was angry when VzW raised my monthly data cost per line from $30 to $50, but how many people in the US are still getting true unlimited data for $50/month? Posted via Turbo
  • Not entirely. All carriers' contracts have a clause that basically says they can do whatever they want to your plan whenever they want and you have to deal. They just rarely take advantage of it because that'd be PR suicide. But if they wanted to suddenly double your price halfway thru a contract, the agreement you signed says they can Posted via the Android Central App
  • Doesn't change my point... out of contract you have no justifiable expectation that the terms under which you accepted the contract must continue. The only incentive the carrier has to not escalate your costs is to retain you as a customer, and that incentive is not exercised at these individual customer level, all they care is that at the aggregate level leakage to other carriers is held to an acceptable level while revenue continues to rise. That's why, for all their faults, I love what T-Mo has been doing in the US; their aggressive tactics for a while must have been hurting Verizon because I'd been seeing for the first time some softening of VzW's horrendously anti-customer arrogance. Posted via Turbo
  • Your comment is interesting, it almost makes a person believe they have no choice outside a contract but to go with what ever the carrier wants. That wasn't the case for me. After 10 years with them, I dropped Verizon outside contact and went to straight talk, which uses Verizons network. I pay $35 less per month for the same coverage. Sure, no unlimited data, but 5 GB is plenty for my use and the unlimited talk and text is nice. I don't buy into the whole thing about having no choice, consumers have a voice with their money. Posted via the Android Central App
  • Unless you're in a signed term contract that locks the price for x years, then you can't expect a locked price for ever. Everything rises in cost, including there maintenance and operating costs. Posted via the Android Central App
  • Yes. Technology costs decrease over time, so providing the same technology-related service over a long period of should actually decrease as well. Costs tend to only increase when the amount or quality of service being provided also increases, but those increases are often mitigated or completely offset by the economies of scale, even when considering things like inflation. For example, the cost of providing 1 MB of bandwidth in 2006 was significantly higher than providing 1 MB in 2016, possibly even higher than 1000 MB in 2016. Considering the carrier's cost for providing the same service decreases over time it's absolutely reasonable to expect prices to remain static.
  • But carrier's have operating costs that aren't only technology related. Inflation, Marketing, maintenance, R&D, consumer support, consumer relations, business expansion, etc, etc. Sure, the costs of old tech may decrease, but operating costs and inflation, impacting marketing, payroll, investment, acquisitions, & R&D, among other things, all usually go up. Meaning product pricing increases. Posted via the Android Central App
  • Readers comments are making sense to me. I think i would just pay the extra 5$ a month to keep the plan that i already have. If it really is great, then why get rid of it cuz you dont want to pay a few extra dollars? To each its own i guess.
  • You get it. Complaining about 5 bucks over a few years is ridiculous. Posted via Nexus 6 running on any data plan I want
  • Except the rate went up $5-10 a month. If a person has 4 lines that adds up quickly. Posted via the Android Central App
  • I know it's five per month. Five higher than it was five years ago per month. What's the problem? Posted via Nexus 6 running on any data plan I want
  • Totally see where you're coming from. I'm not saying there's anything inherently wrong with raising prices on older plans. I'm saying that Bell is taking advantage of its ability to do so to encourage people to switch to share plans. Instead of truly incentivizing, they're performing dead through a thousand cuts.
  • This was my point. The only reason to do this is to push the tiered plans on people. Posted via the Android Central App
  • I get it. This is why I buy unlocked phones and just shop around for the best deal. I do not like working with carriers myself. Up in Canada do you have prepaid like in the States? Posted via Nexus 6 running on any data plan I want
  • Prepaid plans tend to be more expensive than postpaid. Weird eh? Posted via the Android Central App
  • But it's still usually cheaper than going to the new plans, isn't it? So how is it pushing people Posted via the Android Central App
  • Problem is that the rates of regular plans went up far more in a really short period of time. We have a fixed oligopoly in Canada for our servers providers. there are only 3 who own all the networks. And they are all priced the same. All raised their prices at the same time. All offer exact same handsets at exact same prices. if this business practice wasn't actually encouraged by the government, it would be ilegal everywhere else. But this has had a disastrous affect on our pricing Canada, already paying one of the highest data rates in the world saw the rates go up by anywhere from 50-100% almost overnight. The CRTC mandated that those who were in 3 year phone plans can walk away from their plan during the 3rd year. So Bell / Rogers stopped offering 3 year plans, and raised the rates of 2 year plans. Even without subsidised phones, the prices skyrocketted. 4 years ago, I signed up a new plan, brought my own phone. Unlimited local calling, Unlimited Canada wide long distance. unlimited text. Voicemail. Call display and 2gb of Data for $55 / mth. in the last year, Bell refused to upgrade my phone on the plan. Requiring that if I get a new phone, i must pay them $35 activation fee up front, then $90 /mth for the same plan I was already on because "we no longer offer the plan you are on now" This is without the cost of a phone (since I was BYOD). So Bell, arbitrarily raised the prices on the exact same plan by $45 / mth. Without ANY reason, without any phone subsidy being part of the contract. And now, because, like myself, so many people refuse to move to these rip-off contracts, bell is going to arbitrarily start raising my prices? Bell is a prime example of corporate thuggery and they need to be smacked down a few more times
  • Sorry can't edit Posted via the Android Central App
  • The problem is what stops them from going to $10, $15 or higher later on. Basically going back on people that decided to buy phones outright vs getting a new contract because those rates are ridiculous. Posted via the Android Central App
  • As terrible as this move is, even if my "grandfathered plan" is increased by $5, I am still spending $22 less compared to in-market plans that they are trying to switch customers to. So...*censored finger gestures*
  • $60/gb seems reasonable... /sarcasm Yeah, they're really handicapping the smartphone experience by charging so much. I really wish Google Fi would come to Canada
  • They've listed Google Fi as available here. But reviewing the speeds, it's limited to 2g. Bell/Rogers is refusing to license out any 3g/LTE network access to Google.
  • I love Project Fi. I've been on Fi for 7 months now, and It's the best carrier experience I've ever had. I love paying for only what I use. My plan is set to 2gb of data, and last month I used 4.15GB. I just pay for exactly the amount I went over. The previous month i used less than 2 GB and I got a $1.43 credit on my next bill. If it does come to Canada get it Posted via the Android Central App
  • I am with you on how great it is, but not at 2g Posted via the Android Central App
  • Oh I definitely agree. Even at 3G I wouldn't consider it. I was simply saying if it becomes available at 4G speeds in Canada he should really consider it. Posted via the Android Central app on my Nexus 5X with Project Fi
  • Big game in Hockeytown tonight Posted via Nexus 6 running on any data plan I want
  • Worry not; Bernard Lord is there to save the day!
  • You crazy Canadians! You don't have to get raped by your wireless providers to be more like us here in the States. Just don't exercise as much and spend more time curating ridiculous hipster beards and you'll get there. Posted via the Android Central App
  • Garbage company Posted via BlackBerry priv with physical keyboard