It drives John Boynton crazy when analysts and the media link his products to current news events. Some reports on Rogers’ new smartphone-and-tablet data-sharing plans, which the company launched last month, connected them to the specter of Verizon entering Canada.
“If I could launch something like this in our billing system in like two months, I’d be a genius,” says Boynton, Rogers’ executive vice-president of marketing. “I wouldn’t be here, I’d be selling that billing system to every carrier in the world.”
The “Share Everything” plans had nothing to do with Verizon and had in fact been in the works since September, 2011, he says. Rogers was hoping to introduce them this past February, but instead decided to wait in order to integrate them with a new billing system that’s being launched this fall.
The plans lets customers pick a tier of data for their primary smartphone, then add additional lines or devices that can then share the same data allotment. A one-gigabyte plan, for example, costs $85 a month. Connecting another on-contract smartphone costs an extra $55, while a tablet runs $10. Every connected device then feeds off that same one gigabyte.
In general, the sharing system constitutes a savings over getting separate data plans for each device. Each of the big carriers has rolled out similar offerings, although Rogers is now expanding its plans to accommodate up to 10 devices, which Boynton says is the largest limit in Canada.
The real driver of the plans is exponentially increasing data usage, which has increased by 500 per cent since 2011 and 80 per cent year over year, he says. The typical household has three lines, as well as multiple devices, which means that customers are starting to look for ways to either consolidate or eliminate some of their spending.
“We kind of looked at each other and thought we’re going to need another solution to this other than the standard rate plan,” Boynton says. “The old structure wasn’t going to accommodate that.”
Canada is thus firmly into a new paradigm, where data is the main determinant of wireless prices, he adds. All of Rogers’ sharing plans have unlimited nation-wide voice and texting, as well as voice mail and call display. All those other things are basically throw-ins on data plans.
The shift means carriers are also having to change how they account for revenue. Although Boynton says Rogers didn’t institute its data-sharing plans because of the Verizon threat, the company did take inspiration from the U.S. giant, which rolled out a similar system last year. In doing so, Verizon moved away from reporting average revenue per user (ARPU), which has traditionally been the main metric in comparing performance across wireless carriers, to average revenue per account (ARPA).
Boynton says ARPA is increasingly being used internally by carriers, but the decision on whether to adopt it externally will have to be made by Rogers’ chief financial officer Anthony Staffieiri.
Next up is the elephant in the room: roaming. The Canadian Radio-television and Telecommunications Commission announced in August that it is looking into the fees that carriers charge customers for using their phones abroad. The probe was likely sparked by a recent study by the Organization for Economic Co-operation and Development, which found that Canadians pay among the highest roaming rates in the world. The average of US$25 per one megabyte of data was well above the $9.84 found in a cross section of 34 countries studied.
Roaming bill shock has become a major concern for consumers, not just in Canada, but elsewhere as well. Bell announced Monday that is slashing its U.S. roaming fees in half in response to consumer concerns over pricing. Regulators in the European Union, for example, are also moving to eliminate high roaming fees entirely.
Boynton says Rogers has “lots of work to do” in this department and indeed has a roadmap of new roaming offers that will be rolled out over the next 18 months, regardless of what regulatory or government events may bring. Of course, that won’t stop observers from making connections.
“I can’t do anything about that,” he says. “We have to do what we think is right and not worry too much about it.”