It’s a good day for wireless subscribers in Quebec.
Videotron, the scrappy cable company that launched cellphone services across the province a few years ago has at last landed the vaunted iPhone, which continues to be the most popular wireless device on the planet.
The launch of the device isn’t so much the big news – it’s the monthly pricing that’s come along with it.
Videotron is substantially undercutting the plans offered by Bell, Rogers and Telus in the province, offering monthly rates that are as much as 36 per cent less expensive than what the Big Three incumbents charge for iPhone eligible plans.
Videotron is charging $74.95 a month for unlimited Canada-wide calling, text message and four GBs of data. The equivalent incumbent plans are $110/month – which Bell, Rogers and Telus uniformly charge their subscribers.
For $80 a month, Videotron iPhone subscribers can get the same deal and a total of six GBs of data, a plan that costs Rogers, Bell and Telus subscribers $125 currently, according to analysts.
Videotron’s pricing is clearly designed to win over droves of new customers in a hurry.
It is also a powerful example of how the presence of a long-term fourth competitor in the market can deliver “more choice” and “lower prices” for customers – two stated objectives of the federal government, which has been aiming to boost competition in wireless services.
Better pricing across Canada?
Videotron’s pricing may be maddening for customers in other provinces where monthly bills are generally higher — and only getting more so, with the Big Three carriers raising rates on plans in recent weeks.
But there’s hope for subscribers in other provinces such as Ontario, Alberta and British Columbia, where the Big Three have regained their collective hold.
The Montreal-based carrier bought in February valuable airwave licences from Ottawa across the country, licences that would give Videotron the capacity to expand beyond Quebec’s borders.
The company has remained noncommittal, instead focusing on retooling its current network with faster 4G technology.
The current pricing likely in part reflects the slower speeds and lower capacity those new iPhone subscribers will have to put up while Videotron is overlaying its existing network with new gear.
Once the upgrade is complete later this summer, some experts suggest Videotron may look to raise rates.
But that still opens up a window of several months for new customers to lock into a contract on a brand new iPhone at rates far cheaper than what the bigger cellphone companies are offering.
And if this kind of pricing competition can be broadened out to provinces where prices between carriers vary little if at all and are higher, consumers likely wouldn’t mind at all. And neither would Ottawa.
Plans for iPhones among the four carriers in Quebec appear uniform with two big exceptions — the price charged by Videotron on its two offerings. (Source: analyst reports)