BUSINESS

National standards for cellphone contracts to benefit consumers: wireless group

06/04/2012 04:46 EDT | Updated 08/04/2012 05:12 EDT
National standards for cellphone contracts would need to set out rules for early cancellation fees, often a source of frustration for consumers, says the head of a wireless industry group.

Different rules for 13 provinces and territories would be confusing and push up consumer costs, Bernard Lord, president of the Canadian Wireless Telecommunications Association, said Monday.

"The hot button issue seems to be the early termination fees," Lord said in a phone interview.

"Let's have one set of consumer standards across the country. If we have rules that are different, it just complicates everything for everyone."

Canada's major telecom companies — Rogers (TSX:RCI.B), Bell (TSX:BCE) and Telus (TSX:T) — and consumer advocacy groups all support the idea of national standards that would apply to wireless devices, however they don't all agree on how those rules would work.

Lord said national standards would state obligations to both customers and carriers, adding it needs to be a two-way street.

National standards would have to take into account the different ways that consumers buy mobile phones including three-year contracts that subsidize the cost of expensive smartphones and prepaid services.

"We don't want any legislation or regulations or national standards to limit the choice of consumers," Lord said after a speech to the Canadian Telecom Summit in Toronto.

Lord noted that provincial legislators have proposed that consumers pay a $50 cancellation fee, but often neglect that the amount owing on subsidized smartphone has to be paid off by consumers, too.

"It could be several hundred dollars. It's a misunderstanding with some consumers."

The Canadian Radio-television and Telecommunications Commission has asked for feedback on whether it needs to create a national wireless code to ensure that wireless customers are protected.

Some provinces such as Quebec have put in legislation that limits cancellation fees and stops companies form automatically renewing cellphone contracts.

Rob Bruce, president of Rogers Wireless, said the company has given the CRTC an example of what it thinks a national code should look like, including contract language.

"We think a code really gives customers comfort," Bruce said from Toronto.

"It just doesn't seem right that depending on your geography as a Canadian that somehow you're treated differently."

Lord said almost half of all mobile users in Canada now own smartphones, with that number jumping to almost 70 per cent in the 18-to-34 year-old category. Tablet owners are also on the rise, he said.

Also on Monday, the Canadian Wireless Telecommunications Association said a new study found that the country's wireless industry supports more than a quarter of a million jobs and billions of dollars in direct and spinoff economic activity.

Based on 2010 data, the study said the wireless industry supported more than 260,000 jobs with an average salary of more than $64,000, compared to the Canadian average salary of just over $44,000.

The study estimates the industry generated $43 billion in economic activity, including direct and indirect employment as well as spinoff benefits to wireless customers.

The association says more than 26 million Canadians have a mobile phone or wireless device.