Canada’s wireless carriers don’t need zero rating

They’ve benefited from sameness, so why the sudden need to stand out from each other?

wireless carriers, triplets, identical

Identical Wireless Carriers:

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The CRTC’s hearing on differential pricing – also known as zero rating – is winding down, which means it’s time to digest the arguments made by the more than two-dozen testimonials presented over the course of the week.

One line of questioning that wasn’t satisfactorily answered was why – exactly – the big wireless carriers want or need zero rating, or the practice of exempting certain internet applications from monthly usage caps.

Telus insists differential pricing isn’t about controlling the internet, but rather about service providers being able to distinguish themselves from each other in the eyes of customers:

That’s a hard statement to believe given that the country’s Big Three wireless carriers – Bell, Telus and Rogers, which actually opposes zero rating – are equal to each other in every key measure:

  • Their revenues are nearly identical – Bell’s average revenue per user (ARPU) is $64.32, Telus’s is $64.38 and Rogers’s is $62.30.
  • Their market shares are nearly identical – Bell has 29 per cent of the nation’s subscribers, Telus has 28 per cent and Rogers has 33 per cent.
  • As anyone who has shopped around can attest to, their prices are identical – a smartphone plan with unlimited nation-wide calling and texting and one gigabyte of data in Ontario, for example, is exactly $90 on all three carriers.

It’s been this way for as long as anyone can remember, so why the sudden need to differentiate? Do the carriers really have a genuine desire to stand out from one another?

That sameness has served them well till now, delivering outsized revenues and profits. Collectively, Bell, Telus and Rogers reap the highest ARPU and among the highest profit margins in the world, according to the Bank of America Merrill Lynch Global Wireless Matrix. Exactly what financial need would zero rating address for them?

Rogers, the industry maverick on the issue, wants customers to pay for all of the data they use. It’s a hostile-sounding position on its surface, but it’s at least a more honest acknowledgement of the benefits the company gets from that sameness.

Rogers is instead trying to differentiate itself in other ways, like giving customers free Spotify subscriptions – a sort of stealth zero rating – and with better data management tools. There are issues with those efforts to be sure, but they are preferable than Bell and Telus’s desire to shape what people consume online.

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