High prices are sparking a wireless black market in Canada

Cheaper Prairies-based subscriptions are being sold to the rest of the country on Kijiji.

yakov smirnoff, wireless black market

“In my country, wireless service subscribes to you!”

Wireless Black Market:

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You know wireless pricing in Canada is messed up when there’s a black market emerging to provide people with better deals.

Take a fellow who identifies as “Tony,” for example. Tony is selling monthly plans with Koodo on Kijiji for $48. His fee for setting up the plan, which features unlimited nationwide calling and 5 gigabytes of data, is $100. He ships customers a SIM card for their phone, and off they go. (Update: Tony appears to be laying low and has removed his ad. Here’s a preserved version on Howard Forums.)

For the majority of Canadians, 5 GB of data and unlimited calling for $48 a month is an absolute steal. In most parts of the country, such a plan costs at least $90. Anyone taking Tony up on his offer will see his fee pay off in just two months of service.

Tony is cagey about answering questions texted to him, probably because he knows that what he’s doing isn’t exactly above board. What he’s doing, according to a source familiar with the situation, is setting up Koodo plans in Manitoba – where $48 does indeed get unlimited calling and 5 GB data – and then exporting them to the rest of the country.

His customers simply use their Manitoba-based account by roaming on the networks of Bell, Rogers and Telus, wherever they happen to be.

The reason why this is happening is well known by now. The Big Three carriers and their sub-brands, including Koodo, sell service for much cheaper in Manitoba and Saskatchewan because of the presence of strong fourth players: MTS and SaskTel, respectively.

A recent report from Ottawa-based consultancy Wall Communications found that monthly wireless plans are between 30 per cent and 50 per cent cheaper in the prairie provinces because of the extra competition.

The price discrepancy with the rest of Canada is evidently opening up opportunities the same way that a lack of toilet paper and blue jeans created entrepreneurial possibilities in the old Soviet Union. As Yakov Smirnoff would say, what a country!

Regulatory aficionado Ben Klass, he of the forcing-Bell-to-stop-favouring-its-own-video-services fame, says this wireless black market is likely to get shut down if dumb journalists (my words, not his) keep writing posts like this one:

“New roaming tariffs include explicit provisions preventing roaming partners from allowing ‘permanent roaming,’ and requiring them to take measures should 50 per cent or more of a person’s monthly usage be out-of-home network. This is not currently enforced… but could be if too much attention is drawn.”

It would indeed be ironic if the authorities took steps to shut down these Robin Hood-like workarounds while at the same time allowing the source of the problem to continue unabated, which is probably what will happen.

As Dylan Young wrote recently over on Yahoo, it would be a cold day in hell before, say, Apple were to sell iPads for dramatically different prices in neighbouring provinces. Competition watchdogs would probably fall all over themselves with a crackdown, that is if the company were stupid enough to do such a thing in the first place, which Apple isn’t.

But hey, this is the wireless Soviet Union, where the oligarchs call the shots. What a country!

UPDATE: A fellow claiming to be the “Tony” in question got in touch to clarify some of the above. He says he doesn’t ship SIM cards, that the accounts he signs up aren’t based in Manitoba or Saskatchewan and that he doesn’t “touch” customers’ addresses or phone numbers.

I emailed him to ask what he does do and how he manages to set up non-Prairies residents with what are clearly Prairies wireless plans, but he hasn’t yet replied.

The folks over at iPhoneInCanada.ca explain a bit how other enterprising individuals have run similar bootleg schemes with Prairies plans in the past. Doing so has involved customers taking “creative” approaches that generally involve convincing official sales representatives of a move to and/or from Manitoba or Saskatchewan for school or work.

If Tony replies to my queries, I’ll update this post again.

UPDATE 2: Here’s the workaround for accessing the cheaper Prairies Koodo plan from other provinces. I haven’t tested it myself but others have reported it works.

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11 Comments on High prices are sparking a wireless black market in Canada

  1. Let’s hope more of this happens and that more competitors emerge in all provinces nationwide.

  2. Just to be clear koodo is fully owned by Telus. Telus created koodo so that it could compete with lower cost carriers like wind while still charging higher prices to those people that mistakenly believe koodo is an inferior network to Telus/Bell. You don’t roam with koodo anywhere in Canada any more than you do anywhere else. Bell and Telus cooperated on their current network and so the Bell network is the Telus network is the koodo network. They are using the term roaming incorrectly when really what they are saying is if you leave the geographic area that your plan was priced for we will cancel your plan. This is very different from roaming. For example if you are with Wind they only have towers in certain cities and if you constantly use your Wind phone outside their home areas you are roaming and they get charged more. This is not the case with koodo or Telus or Bell (Bell and Telus are of course different companies but it is the same network now.)

  3. The first rule of fight club is…

  4. He’s not replying because he literally does nothing on his end. Getting this plan is no different from any other; you just have to lie a little bit.

  5. Mr Novak, as you had already mentioned , this telecom oligarchy is one of its kind among the G20 countries. As a nation our policy makers who champion Canadian values as free markets and democracy seem to be wearing their patriotic glasses only for speeches. Unfortunat though, we all seem to have forgotten the fact that bell and Rogers built their infrastructure on tax payers money and yet have plans that certainly put a lot of stress on the average man/woman’s wallet.consider $30 minimum to get an incoming call!. We call ourselves a developed nation, I am sure I can get a cheaper plan in Africa and Asia to receive calls at least.
    We need more people like Tony , as you rightly said like a robin hood to put these companies to heel. I have interacted with Tony before and he does not do his business as you claim, not one bit!. So , I would suggest that you spend the time going after the political connections that still make this oligarchy possible.

  6. The analogy of the soviet era shortage in paper towels is not a fair one. The soviet union had a shortage of a certain commodity and the black market thrived on absolute corruption within their state owned companies. We do not have any shortages in our infrastructure.. We just don’t let any one outside to compete with the big 3.

  7. MichMichael // July 8, 2015 at 8:33 pm // Reply

    Tony did a fantastic job for me.I am totally satisfied with service
    No Complain at all. Fast responds.

  8. Tony is excellent, took a day and I had everything switched from two different providers. Works like a charm. Koodo is known to work better in buildings anyway and I wanted to switch to them for a while, just that they didn’t have good plans otherwise. Thanks!!!

  9. The Howard Forums have all the info on how to set up your phone for a SK/MB number for Koodo. From what I’ve read, Rogers will kick you off if you try it with Fido so maybe Telus is trying to increase its numbers to overtake Rogers and let the costs fall where they might. You are still on a two year contract after all, and maybe you get bumped to a higher contract when they “discover” you are not really from SK/MB.

    I’m on Wind and it suits my needs and I prefer the cost savings over the need for speed. I stay mostly in Winds coverage area so don’t need the big 3’s bigger area. Others need that bigger area.

    News to me that MTS was privatized though. Thought it was still government owned.

  10. If you talk to retentions when your term comes up they’ll usually offer your the SK/MB plans and/or match other advertised rates… at least they always have for me (living in Alberta, with Telus). I’ve been on the Sask60 plan for years (unlimited nationwide and 5GB data for $60).

    Seems I should be able to get a bit of a discount off that now knowing that price, but at the time that was a lot better than anything advertised in Alberta.

  11. I’m not sure what Tony does that one can’t do for oneself. I live in Quebec and a Koodo employee at the local kiosk signed me up the Manitoba $48/month plan. They used my valid address. I had to show my Quebec driver’s licence.

    I wanted to keep my Ottawa number and I was told that after the start of the next billing cycle I could change my number myself by porting my existing Ottawa number using their online Self Serve portal.

    It worked. The plan was set up at the kiosk. The number port was initiated by me using their portal.

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