Telus (TSX:T) is scrapping something that its lower priced subsidiary, Koodo, has never had: activation fees.
Telus announced yesterday that it is eliminating the $35 activation fee that it charges new customers. It will also scrap the $25 it charges to existing customers when they buy a new device. New Telus customers will have to buy a $10 SIM card when activating new devices.
“Telus has not only eliminated activation fees, it has dramatically simplified its entire fee schedule,” the company said in its announcement.
“Our customers have told us they feel activation and renewal fees are unfair,” said Brent Johnston, vice-president of Telus’ Mobility Solutions. “We have been listening and that’s why we’re giving them exactly what they’ve asked for.”
It’s not clear is why Telus is only now scrapping the fees, when its lower-priced subsidiary, Koodo – which Telus founded in 2008 – has never charged them. Koodo also does not require subscribers to sign fixed contracts.
“As a new entrant, no activation fees was always part of the value proposition for Koodo to have no fees as a low-cost, lighter service brand,” Telus senior communications manager Shawn Hall explained in an email to Business in Vancouver.
“At Telus, we are on a journey to put our customers first and we are continuously listening to their feedback. They told us they felt activation fees are unfair, so we took action and eliminated those fees.”
Telus’ announcement came just days after the Canadian Radio-television and Telecommunications Commission (CRTC) announced it is launching a public consultation process to develop a new national code for cellphones and mobile devices.
Canada is said to have some of the highest cellphone, long-distance and roaming charges in the world. The Organization for Economic Co-operation found that Canada has the third highest wireless rates among all the developed countries.
While some critics have pointed to a lack of competition in the Canadian mobile phone industry as the reason for the high rates, others point to the fact the CRTC decided in the 1990s not to regulate the growing mobile phone industry.
The CRTC will be accepting submissions on a new code until November 20.
“It's clear that Canadians are getting increasingly fed up with being price-gouged,” said Lindsey Pinto, communications manager for OpenMedia, the Vancouver-based organization that has campaigned for more competition in the Canadian mobile phone space.
“It seems that Telus is recognizing this and removing some of its extra fees to mitigate the increasing outcry.
“Interestingly, Telus’ move comes at a time when the CRTC is developing a code of conduct to protect cellphone customers.
“This will create a national framework that could, if the public interest is adequately taken into account, go a long way in ensuring Canadians get fair treatment. Telus’ action to remove something that is very clearly an unnecessary fee may have come in anticipation of these new protections.”
