Telus makes biggest change in its wireless pricing strategy in four years

TORONTO — Telus’s decision to offer wireless plans with unlimited amounts of data for a fixed monthly price, starting at $75 for 10 gigabytes, is the latest evidence of a fundamental change in how Canada’s mobile phone industry does business.

As with similar unlimited data plans offered by Freedom Mobile, Rogers and Bell, the new Telus data plans will reduce data transfer speeds rather than charge extra money if usage is above a certain level specified in the plan.

Freedom Mobile has claimed the Big Three are just following its Big Gig pricing strategy, announced in October 2017, but Telus and Rogers say they’re actually getting ready for higher data traffic on their fifth-generation networks.

Jim Senko, president of Telus Mobility Solutions, says that the Vancouver-based company has struck a balance between satisfying the growing demand for wireless data and the capabilities of the network that delivers it.

As a result, he says, Telus chose to slow data transfer rates to 512 kilobits per second if usage goes above the plan’s full-speed limit — rather than 256 kbps as its rivals are doing.

“Our customers, at 512 kbps, can have a good experience opening a web page, engaging in social media, (or) stream music at that speed,” Senko says.

“What it really limits is that one user that is hitting video really hard. That creates problems in (network) performance for other customers.”

Senko also says that customers who sign up for one of its new service plans will initially be getting fourth-generation transfer speeds, until the throttling begins, but unthrottled speeds will be 10 times as fast with 5G networks.

“5G is coming next year and 5G changes the whole paradigm in terms of how customers use the network,” he says. “So the reason we’re going to the Peace of Mind plan is because it future-proofs our customers for when 5G comes.”

Telus will offer several plans that replace overage fees with throttling, with the higher-priced plans providing more unthrottled data per month before transfer speeds are slowed to 512 kbps.

The company is also making a couple of other changes that reflect how Canada’s big national wireless carriers are responding to pressure from competitors, policy makers and consumers.

Telus technically became the first of the national carriers on Wednesday to embrace a hardware pricing strategy that’s been used by Freedom Mobile and Eastlink.

But Rogers announced within hours that it will also begin offering zero-down, zero-interest financing for new phones starting next week — a move that Rogers had said previously that it would do this summer.

Telus is also adjusting its strategy for families. In addition to offering pools of data that can be shared by two or more people, it’s also offering price discounts when a family opts for two or more unlimited data plans.

Companies in this story: (TSX:T, TSX:RCI.B, TSX:BCE, TSX:SJR.B)

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