Telecom Trends

The news broke yesterday that Bell and TELUS were starting to tell their mobile customers that they plan to start charging for incoming text messages. No news releases were issued, leading to some mis-information. Customers were being notified by billing inserts providing them with 30 days notice of the rate increase, as provided for in their contracts.

Bell's contract reads:

We will not increase your basic monthly voice plan charge or out-of-bundle airtime charge during any Committed Service Period, as long as you remain qualified to receive your chosen plan and Services throughout the Committed Service Period. If you no longer qualify to receive a plan or the Services at the fees offered to you (for example, a corporate plan or employee plan, due for instance to termination of employment or termination of a corporate agreement) then Bell may transfer you to a comparable Service and plan, at the appropriate fees and charges for which you then qualify, and you accept same. During the Term we may increase other fees (including the System Access Fee), and charge additional fees, after giving you 30 days advance notice. Any promotional and upgrade offers are offered at our discretion for limited periods of time [emphasis added]

I generally don't have a problem with services providers charging what they want and what they believe the market will allow. Consumers have choices and can shop around to select the package that best meets their needs. Besides the big 3 (Bell, TELUS and Rogers), there are lots of alternatives out there, many of which have very attractive text messaging plans. In some cases, the 'off brands' like Fido, Solo and Koodo may save consumers lots of money. You even get to take your phone number with you.

One of my contacts tells me the charges won't apply to incoming spam, but I have no idea how service providers will define spam. For example, a new form of school yard bullying could be for kids with text messaging plans to start sending messages to one of their schoolmates without a plan. Do the carriers really want customers calling into the call centres each month looking for text messaging credits?

Will the Canadian service providers provide the same tools as in the US for end-users to manage their incoming messages? If customers are going to have to pay for incoming messages, then they should get to control those charges.

The main issue I have with this new text message plan is changing the rates in the middle of contract periods. People shopped around last Christmas and selected devices and packages based on the pricing that was in effect. They signed 2 and 3 year contracts based on the analysis they did at that time. Now, the rules are getting changed part way through.

It is another example of a one way contract I wrote about in May. At that time, I wrote:

How can it be reasonable for the service provider - a major Canadian telco - to lock up a customer for 2 years, but be free to change the price substantially in the middle of the contract period? What exactly is the meaning of a contract if one side gets to change a key term, price.

Just as I have written about changes to System Access Fees, if service providers want to change the rates, go ahead. But if consumers are tied up under a contract, the service providers should be held to honour their commitment as well, or release them from their contract to go shopping again.

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system access fees, SMS, contract