Art Of Geek

13 Comments Add your own

• 1. Blue Ninja  |  July 9th, 2008 at 3:00 pm

  Dammit. What’s with all the 3-year contracts? I am not going to get locked in. I’d rather pay the premium for getting a non-subsidized iPhone than pay $1100 to Robbers…ahem…I mean, ROGERS (or Fido), for breaking their contract between now and 2011…

  I know I’ve been with Fido for 5 years, and I think that should count for something as opposed to being forced to sign a freakin’ contract. Hmmm…Unless, I play the “OK, I’m moving to Bell - convince me to stay” routine.

  I’m likely gonna hold out for an unlocked phone - which may be more difficult as the policy apparenty is to have all iPhones activated before they leave the store. Either that or I’ll wait until the hype dies and see what other offerings are out there.

• 2. madgunde  |  July 9th, 2008 at 3:08 pm

  @Blue Ninja

  The 3-year contract is in exchange for a heavily subsidized phone. Rogers will sell you an unsubsidized iPhone with no contract if you wish. I think the price is going to be around $600-650, which sounds about right for a device with it’s features and coincides with the estimates of how much Rogers pays Apple for the iPhone. After all, there has to be a reason the iPod touch starts at $319CDN, and doesn’t include a phone, BlueTooth or GPS and costs you extra for software updates which are free on iPhone.

  I think I heard somewhere that the early cancellation fee is something like $400, so in reality there’s not much benefit to buying the iPhone without contract unless you’re SURE you are going to switch carriers in the near future. Question is, who are you going to switch to?

• 3. Blue Ninja  |  July 9th, 2008 at 3:55 pm

  I’d rather pay $650 for the phone, now than worry about a heavy fee, later.

  Good question. I heard rumours that T-mobil and / or another unnamed carrier (with an actual network) is coming to Canada. It’s one not to ignore, especially with advances in GSM technology and with Rogers / Fido receiving a lot of press lately - even in the US. (What?! You have cell phones in Canada?). So i’d rather NOT be locked in for 3 human years (which is like 9 years in a cell phone technology timeframe).

  $400 makes sense to allow Rogers/Fido to recover their subsidy cost, but I called Fido and the cancellation fee I was quoted is $1100. F**K that.

  The reason the iPod touch (and STOP calling it an iTouch, PEOPLE!) is $319 as compared to one with a phone, etc., is the marginal cost of bringing it to market. I mean, it’s the same reason it’s $500 to paint a single car door and $700 from the same place to paint your whole car…

  OK, so It looks like I’ll be getting the $650 unsubsidised, unlocked iPhone from a non-Rogers / Fido store. Pacific Mall, here I come!

• 4. madgunde  |  July 9th, 2008 at 4:06 pm

  @Blue Ninja

  I think you were misinformed by the Fido rep, or the cancellation fee has changed. According to the Fido website, it’s a maximum of $400, minimum $100, depending on how much time is left in your agreement:

  An Early Cancellation Fee (ECF) applies to all subscribers with a Fido Agreement, if , for any reason, their service is terminated prior to the end of the Fido Agreement. The ECF is the greater of the (i) $100 or (ii) $20 per month remaining in the Fido Agreement, to a maximum of $400 (plus applicable taxes), and applies for each deactivated phone number.

  We will be seeing some new carriers in Canada thanks to the wireless spectrum auction but, according to that article:

  The changes won’t occur overnight. It will take about two years for the winners of the new licences to build infrastructure and operations. But the auction results are a watershed moment in Canadian communications, said Genuity Capital analyst Dvai Ghose.

  Seems to me you’d be better off investing the $400. By the time a competing GSM provider could build-out a new GSM network in Canada (assuming they use GSM), you’d likely have less than a year left on your contract, so it would only cost you around $100-120 to cancel it, assuming you didn’t decide to just stick with Fido, who will no doubt react to any new competitive threat that comes along with more competitive rates. Not to mention the potential warranty headaches in dealing with a grey market product.

• 5. Blue Ninja  |  July 9th, 2008 at 4:41 pm

  Well, I guess the Fido rep was seeing double and somwehow read $100 as $1100 of her ‘cheat sheet’.

  If it’s $400 then that’s a risk I may be willing to take, but I need an unlocked iPhone, given all the travelling I do (especially to the US) AND given that I already have invested in SIM cards from 3 major US cell providers.

  So, I’ll be waiting for an unlock method to be published. I figure that’ll be in about a week or so.

  I take the comments of industry analysts with a grain of salt. Mr / Ms. Ghose didn’t take into account (and can’t possibly) the size and / or power of the company who wins the auction.

  OK, so extrapolate the biggest player in the US and MAYBE you can get a result, but what if the new contender is from Europe or China? Maybe another projection model or 2?

  My point is that an aggressive company can do a LOT in 6 months, never mind 1 year of development when trying to break into a monoply type market when the monoply has a lot of disposable assets. Yes, Ted, I’m talking about you.

  I mean, I’m pretty sure the contender will be operating in stealth mode or at least coming up with a twist which will have to take Rogers by surprise to succeed. THAT will be their business model, or Rogers/Fido will have time mitigate any loss of profits to Company X, thus hurting Company X.

  Let’s see what happens. For now, I’m just protecting what’s mine…my hard earned moolah…

• 6. madgunde  |  July 9th, 2008 at 6:07 pm

  I think Ghose’s estimate is far more realistic. I just don’t think a national cell network can be cost effectively built in 6 months, and who knows how long Industry Canada is going to drag their feet to give the auction winners the green light to start deploying.

  More competition will come, but we’re going to have to be a bit patient.

• 7. Blue Ninja  |  July 10th, 2008 at 10:30 am

  Industry Canada’s blessing is a whole other issue, and in terms of Infrastructure development and (more importantly) deployment, I don’t see how Ghose could make a 2 year estimate. There’s no basis or rationale offerred. As I mentioned, we have no idea where the auction winner will be coming from.

  Besides, if past experience is the main basis for such an estimate, look how quickly and stealthily ING came out of nowhere. Even Fido, back in the day…

• 8. madgunde  |  July 10th, 2008 at 11:23 am

  ING didn’t have to build a national cell network and Fido took many years to build out their network to a point where it was competitive, we have no idea how long it took them to get to market.

  I don’t think Ghose’s estimate was only looking at infrastructure. I believe he was looking at all the logistics, contract negotiations for real estate and roaming, regulatory approvals etc. The auction isn’t even officially over yet, nothing can even start until there’s a clear winner.

  Another thing to keep in mind is that the wireless spectrum being auctioned is all in the 2GHz range. Canadian (and worldwide) GSM networks all operate at the 1900MHz range and below. So IF the GSM standard is expanded to include the new frequencies being auctioned (a very big if), then there’s also the matter of compatible phones being developed and clearing all regulatory approvals.

  I think our most likely source for GSM competition will come from an existing player (Bell or Telus), but that is likely even farther down the road since the technology that will allow them to economically migrate to GSM is still 4-5 years away, and according to that same article:

  It would take Telus up to two years to build out GSM coverage in Canada’s urban areas alone, he said, and even then it would not enjoy the monopolistic pricing and product clout that makes GSM a bonus for Rogers.

  That’s 2 years for an existing carrier who already has all the towers in place, just needs to install the infrastructure.

• 9. Blue Ninja  |  July 10th, 2008 at 4:27 pm

  One thing you’re forgetting is the power of a mass buy out. OK, so we’ve been talking about the Spectrum Auction, but what if (to add to the other IF’s in the articles you quoted) a large zaibatsu like Sumitomo come along and created their own infrastructure.

  Actually, they don’t even have to buy out Bell or Telus (but could in a heart beat). With their money, resources and power they would have no problem setting up a GSM network before Rogers would have time to react. They wouldn’t even have to sub-contract out any work, and have enough subsidiaries covering everything from electronics to construction, to steel and chemicals.

  Sumitomo also own and have full control of their own finance and insurance companies, so forget about delays in red tape and related resourcing. This is a true powerhouse that could easily come and change things in well under a year. They’ve also been around since the 17th century and won’t be going anywhere, anytime soon.

  Your assumptions are based on companies and money within North America. Asia has been a contender (and dominant power) for decades in many industries and their cell phone products have a massive market share, so why not their services in an area that is undergoing massive change.

  Your viewpoint and the articles that you quote seem to suffer from tunnel vision. This is the same tunnel vision that looks only at North America as a safe “island” and doesn’t take into account other powers in this ever expanding global economy.

  This type of viewpoint is what shocked the U.S. when it was shattered as their car industry took a hit from foreign cars and manufacturing methods. I am sure MANY analysts underestimated the power and impact of foreign markets entering the U.S. economy. I’ll bet that many of the same analysts never even accounted for it, or simply dismissed the fact as inconceivable, but it happened.

• 10. madgunde  |  July 10th, 2008 at 4:44 pm

  Actually, the first article I linked to was talking about one of the largest mobile network operators in the world, so no, I don’t believe Ghose or myself are thinking only about North America. From the first article I linked to:

  Weather Investments, controlled by Egypt’s Naguib Sawiris, and Novator, founded by Iceland’s Bjorgolfur Thor Bjorgolfsson.

  Through Weather and its holdings in a firm called Orascom, Mr. Sawiris rules a wireless empire with more than 90 million clients in the Middle East, Africa, Asia and Europe. His customers are based in such diverse markets at Italy and North Korea. In a recent interview with The Globe and Mail, he said he was attracted to the Canadian market by a dearth of competition.
  …
  With a total of 94 million subscribers around the world, Weather/Orascom “enjoys a level of scale that cannot be matched by any of Canada’s wireless incumbents,” Mr. Ghose said.

  I actually don’t think it’s likely any buyout or new operator will come from NA but think it’s much more likely that an international operator would be involved. I still don’t see anything happening in much under 2 years for the reasons I mentioned.

  All of this is of course academic, since it still begs the question of why you’d spend $400 more now on the off chance that maybe a competitor is suddenly going to appear out of nowhere, instead of saving the $400 now. If you get an iPhone on contract, best case scenario, you save $400, worst case scenario you break even. But with a non-contract iPhone, best case scenario, you break even, worst case scenario, you paid $400 more than you needed to and potentially have warranty issues. It seems rather obvious which makes more sense, except from an ideological standpoint.

• 11. Blue Ninja  |  July 15th, 2008 at 11:00 am

  Then this even further reduces Ghose’s credibility of his multi-year estimate! I mean, to generalise on all carriers / potential companies world wide.

  When talking about saving money and / or getting the best bang for our back, the idea in itself is always ideological - our goal is always to obtain the best situation without compromise. The compromise only arises if unknown factors remove us from our goal.

  In any case, I came back here to post the fact that Rogers have mentioned that their iPhone plans and 3-year contract requirement will be changing on July 24th, this year.

  I actually called in to verify my Fido dollar amount and see how much the net cost of a non-subsidised phone would be. The rep suggested I wait until the 24th unless I’m just going to sign up for 3 years.

  My displeasure at 3-year contracts and their associated cancellation penalties, along with the lack of optional GSM carriers was the reason that this discussion started.

  So, we’ll see what changes. Either way the $30 for 6Gb is still available until August 31st, so I won’t be putting that option at risk.
  

• 12. madgunde  |  July 15th, 2008 at 11:27 am

  What I meant by ideology was if you valued not signing a contract purely for not signing a contract’s sake, despite the fact that it won’t save you any money and will likely end up costing you more.

  Thanks for the info. I assume you mean that you’ll be able to buy an iPhone without contract at the non-subsidized price (probably around $630/$730). I do suspect the price plans will change, given that probably very few people were dumb enough to sign up for one of the original iPhone voice/data plans. Personally, I think they should just give all their iPhone plans 6GB (or call it unlimited) and differentiate them with the number of included minutes/SMS messages. Every plan should include visual voicemail and call display.

• 13. Blue Ninja  |  July 17th, 2008 at 2:27 pm

  It seems that the iPhones are currently available for the non-subsidised price, however the July 24th date is because of the introduction of non-3 year agreements (and thus, corresponding iPhone pricing). So, I would assume as Fido have done in the past, that there would be a 2-year and 1-year agreement available with respective plans. I am also guessing that there will be another plan or plans offerred for the iPhone

  I would like all iPhones to have some sort of unlimited plan, too. However for obvious legal reasons Rogers can not call their 6GB plan “unlimited”, even though for most of us, it is like an unlimited plan as we’ll never even come close to using 6GB in a month.

  I also agree about all plans including voicemail and call display. It’s just another way for Rogers to squeeze an extra $7 or so (depending on whether you sign up for a value pack or not). This is because much of the iPhone’s phone component will be useless without it, and who doesn’t use either, or both features nowadays!?!

  To me, that’s like Rogers charging a per use fee for activating your bluetooth headset. When an BT device is activated, a signal is sent back to Rogers to add 25c or whatever.

  But of course, you’ll be able to add the unlimited bluetooth option to your existing plan for only $10/month.

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