Rogers relaunches Fido without system access fee

04.11.2008 17:04 Shopping - Source: cbc.ca

Rogers Communications Inc. has moved to head off greater competition in the cellphone market by relaunching its Fido brand with lower rate plans, shorter term contracts and no system access fee.

The Toronto-based company on Tuesday unveiled a new look and logo for its discount brand, with plans starting at $15.

Rogers billed the plans as "all-in" as they include voice minutes and text, yet they do not include voice mail and caller identification, which are $6 extra each. None of the new plans, however, include the hated system access fee or 911 charge and the longest term contract is two years, down from three previously.

The company also introduced an "owner's guarantee," which sends a free text message to cellphone customers warning them when they have used 75 per cent of their minutes, and when they hit their cap.

Rogers has also pared down the number of handsets it is offering through Fido with a lineup that is light on more advanced smartphones.

Apple Inc.'s iPhone is still available through Fido, although it is still on a three-year agreement. Fido is also offering the Samsung Jack smartphone on a two-year contract.

"Customers' needs are changing so Fido is changing as well," said Sylvain Roy, senior vice-president and general manager of Fido.

"People are looking for no surprise at the end of the month and to have more control over their spending … so we're responding to their needs."

Rogers had been charging postpaid Fido customers, or those who receive a monthly bill, a $6.95 system access fee for what it said was ongoing investment and maintenance in its network. Prepaid customers were already exempt from the system access fee.

Consumer advocate groups have identified the fee as the most hated aspect of cellphone service in Canada. Cellphone carriers in other countries consider network investment and maintenance as a regular cost of business and do not break out a separate fee.

'Customers were loud and clear'

Roy said getting rid of the charge was part of putting together simpler offerings.

"Customers were loud and clear on getting a simplified [service]. That was the whole intent," he said. "We thought it was easier to have those fees included in the price plan so the customer can more easily predict how much they're committing to or spending."

Rogers and other Canadian carriers have also explained the 95-cent fee for 911 service as a mandated charge by the Canadian Radio-television and Telecommunications Commission.

Existing Fido postpaid customers will continue paying both fees unless they switch over to one of the new plans.

Rogers and its fellow cellphone carriers — Bell Canada Inc., Telus Corp., Bell Aliant, MTS Allstream Inc. and SaskTel — are facing class-action lawsuits for both charges.

Regina-based lawyer Tony Merchant received certification for the system access fee lawsuit, which is seeking the repayment of nearly $20 billion to customers, last year while the 911 case was launched this summer.

In a court hearing scheduled for December, Merchant plans to argue that the system access fee should be opt-out instead of opt-in, meaning that cellphone customers who at any point paid the charge will be automatically signed up to the lawsuit unless they expressly choose not to be.

The 911 fee, meanwhile, is indeed a CRTC fee but it is set at no more than 11.5 cents, which means the carriers are profiting from a mandated charge, Merchant said.

Rogers core customers still paying fees

Postpaid customers on Rogers' own core cellphone brand, however, will still pay both charges and face fees for switching to Fido if they are in the midst of a term contract. Nevertheless, industry watchers believe the system access fee's days are numbered.

Telus Corp. was the first major provider to sack the charge when it launched its Koodo brand in March. Like Rogers, however, the Vancouver-based company continues to charge the fee to customers on its own core brand. Montreal-based Bell Canada Inc. also applies the charge to all of its core and Solo brand customers, but the company is now under pressure to follow its rivals.

A Bell spokesperson on Monday would not comment on whether company has plans to scrap the fee.

Consumer groups are also questioning how Rogers and Telus can apply the system access fee to one of their brands but not the other when they both run on the same networks.

The moves by the two companies come in anticipation of a host of new cellphone providers, who are set to launch services next year. Toronto-based Globalive Communications Inc. is planning a national network with the exception of Quebec, a hole that will be filled by Montreal-based Quebecor Inc. BMV Holdings, a new firm backed by a number of high-profile investors, has also announced it will launch service in Ontario and Quebec.

Toronto entrepreneur John Bitove and Halifax-based Bragg Communications are also expected to announce plans for services in Canada's major cities and the Maritimes, respectively.

None is expected to charge customers a system access fee.

A number of smaller providers that rent airtime on the big three's networks, including Virgin Mobile and President's Choice, also do not charge the fee.

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