The unbearable disingenuousness of Bell rate hikes

Company rationalizes increases with investment in apps, PVR recording abilities.

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Bell Rate Hikes:

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The new year is only a few weeks old, but Bell Canada isn’t wasting any time jacking up rates. The country’s largest telecommunications company is raising prices on home phone, TV and internet packages in February, mostly in Ontario and Quebec, ranging from around $2.50 to $5 per month depending on the service.

The lame justifications for the price increases should be familiar by now to anyone who uses such services. Bell says it spends more than $3.5 billion per year on infrastructure improvements: “These investments enable us to keep providing exceptional new features, even faster and more reliable internet and world-class entertainment.”

Among these improvements: a Fibe TV app for Apple TV, a 4K PVR, built-in Netflix into that Fibe TV receiver, an HD PVR that can record six shows at once, faster internet speeds and a better wi-fi router.

Putting aside the fact that subscribers already pay handsomely for each of those “investments” through ongoing fees and hardware rental charges, what makes the rationalization particularly disingenuous is that no one has any choice in the matter. Bell is arbitrarily adding features and additions to customers bills whether they want them or not, or whether they’re useful or not.

It’s a lot like renting a house and then having the landlord tell you a few months in that he’s raising the rent because he just built a garage addition. Who cares that you don’t have a car?

The difference in that situation is you can always move to a different house where the landlord won’t screw you. Telecom customers aren’t so lucky.

What would be fun is if Bell was proactive about its hikes rather than after-the-fact with them.

What if the company polled subscribers and asked, “Would you be in favour of us developing an Apple TV app and increasing the number of shows you can simultaneously record in exchange for $5 more a month?” The answer to such a poll, we suspect, would be a resounding “no.”

But hey, business isn’t a democracy, it merely flows where the market leads it.

It’s too bad the flow in this particular market is thoroughly uncompetitive – and Bell knows it. Its main rivals in Ontario and Quebec, Rogers and Videotron respectively, generally follow in lockstep with their own rates hikes, so there’s little risk of significant customer defections. It’s why phone, internet and TV rates are rising at triple the rate of inflation across Canada.

Bell’s hikes are a little surprising, though, given all the press that indie ISP Teksavvy got for lowering its internet prices this week. Indie ISPs are minnows compared to Bell and Rogers, but they have perhaps never had such a good opportunity to steal customers as they do now.

Bell’s hikes are also surprising given that the company is waiting to hear from the government and competition regulators on its attempt to acquire Manitoba telecom company MTS. Opponents of the deal have suggested it will lead to higher prices in Manitoba, and Bell is certainly doing its part to prove them right.

By the way, it’s worth noting that Bell isn’t yet hiking its wireless prices. That’s something to look forward to next quarter.

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