BUSINESS

Telus Texting Fee Hike: OpenMedia Warns More Will Come If Small Players Disappear

04/25/2013 01:32 EDT | Updated 04/25/2013 01:32 EDT
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A recent announcement by wireless carrier Telus that it’s raising fees for texting to the U.S. will be just the beginning of price hikes if Canada’s large wireless companies are allowed to swallow up the small players, a consumer watchdog group says.

This is only the beginning,” OpenMedia said in a statement this week. “Big Telecom conglomerates often mimic each others’ price-gouging, so we can expect providers to add new fees across the board if we don’t speak up.”

Starting May 1, Telus is changing its plans that include unlimited texting by adding an additional 40-cent fee for text messages sent to the U.S.. Customers can still opt for unlimited texting to the U.S., but it will cost an additional $10 a month.

OpenMedia describes this as “price-gouging,” pointing to estimates that if text messages were charged at the same rate as other wireless data, they would cost eight-tenths of a cent.

But Telus spokesperson Shawn Hall said the cost of text messages involves much more than just the cost of transferring a small amount of data.

“We're making this change because only a small, but growing, number of customers send texts outside Canada, which is more expensive for us to provide because we have to pay the international carrier to connect the text,” he said in an email to The Huffington Post Canada.

“There are substantial costs involved to operate our text messaging network — billions of dollars — not just the cost of transmission, but of the extensive infrastructure and work by team members involved,” he added.

Telus is reportedly in talks to buy Mobilicity, one of Canada’s small wireless entrants.

The other two small wireless players — Public Mobile and Wind Mobile — have also put themselves for sale, a fact that has raised concerns among consumers’ advocates that fledgling competition in Canada’s wireless market will be stifled.

“We see the big three (Bell, Rogers and Telus) pushing more and more to maintain their control by influencing regulatory decisions,” OpenMedia executive director Steve Anderson told HuffPost in an email.

Anderson cited Rogers Communications’ efforts to buy wireless spectrum controlled by Shaw as further evidence the big three are trying to crowd out other potential players.

Shaw was awarded a band of wireless spectrum in 2008 under rules meant to allot spectrum to small players. The company had planned to become a wireless carrier, but backed out.

OpenMedia points out that the Rogers buyout is a contravention of a federal rule that sets aside wireless spectrum for small players. The rule expires in 2014.

Anderson suggested Rogers’ buyout of the Shaw spectrum may have been at least part of what convinced the small players to give up the ghost and put themselves on sale.

“I believe the indie providers were waiting to buy up this spectrum and having it appropriated by Rogers now puts them at a major disadvantage. They need more spectrum to reach customers and Rogers (who has enough already) is going to limit that access,” Anderson wrote.

A takeover of the smaller wireless players by the big three would be problematic. The federal government has pushed for greater competition in the wireless market in recent years, and regulators would likely balk at approving such acquisitions.

With files from CBC

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