CRTC Scrutinizes Telus on Controversial Pricing Issue

The federal telecommunications regulator has scrutinized one of the Canada’s largest wireless carriers on Tuesday stressing on the controversial issue of pricing. It was the second day of the public hearings on the formation of a code of conduct for the almost $19-billion wireless industry. Canadian Radio-television and Telecommunications Commission inquired from the Telus Corp. to give details on why is it not a routine matter to lower the monthly fees of customers that continue using the carrier even after the expiration of a three-year contract and use the same cellphone.

Even though the commission has previously implied that it has no interest to potentially regulate wireless pricing, the chairman, Jean-Pierre Blais, is attempting to restrict Telus to profit from consumers who continue using fully-paid devices on a month-to-month basis. In essence, this happens because the smartphone subsidies are usually incorporated in the monthly rates for consumers of three-year plans, but it is interesting to point out these prices are not automatically waived off after the carriers recover their costs.

Mr. Blais informed the representatives of Telus that “I don’t get that because it has been amortized. Why are they paying past the 36th month?” He added that “If you’ve said that you’ve recovered your costs in that 36 months to subsidize it – and I get that is sort of a way of helping folks get into this and you want to keep it. But assuming that somebody does not want to upgrade because the phone is great (and) meets their needs, why doesn’t the cost go down?”

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