Verizon in Canada? It's your own fault, Canadian telecoms

An open letter to Bell, Telus and Rogers

It seems that you folks, as Canadian telecom executives, are more than a little bit worried about Verizon's potential entry into the Canadian wireless market. (I saw the two-page spreads you've been running in the national dailies. They make you look terrified.)

You know what? I don't like Verizon either. And I certainly don't like the idea that our federal government might be rigging the rules to favour a big American player at your expense.

You should not, however, mistake my understanding and agreement for sympathy. Every cellphone owner in Canada knows that the three of you brought this problem on yourselves.

You could have competed against each other on price; instead, you've quietly agreed to offer similar cost structures and no real incentives to switch providers. You could have staffed your support departments with properly paid, properly trained Canadians; instead, you've outsourced your call centres to overseas providers who really don't give a rat's ass what the customer thinks as long as the call handle time is within spec. You could have set realistic usage limits and roaming charges reflective of the actual cost of providing service; instead, you give us plans designed to burn through a month's allocation in a single morning, and a never-ending string of horror stories of four-figure cellphone bills upon returning from a week out of the country. You could have honoured your advertised prices; instead, you use every interaction with your customers as an opportunity to clean our credit cards with a hidden fee, service charge, early termination fee, or some other secret financial nuisance.

Given the track record of the Canadian wireless industry, it's not at all surprising that the folks in charge in Ottawa might be open to a potential new player with no history here.

If you really are serious about keeping Verizon out of the country, then, here's how to do it. Remember that you're starting with zero credibility; you'll have to work hard every step of the way to earn back the customer trust you've squandered over the last decade. It is possible, though:

  1. Implement a "Fair Share" service plan. It's as simple as it sounds: A customer's device gets its fair share of the instantaneous bandwidth available to that tower. (Example: 1 Gbps of backhaul and/or airwaves, 100 devices using that tower, therefore each device gets 10 Mbps.) No monthly caps, no distinctions between SMS, MMS, data or voice, no usage metering. Just a fair fraction of whatever bandwidth is available at any given instant, for a fixed price per month- the same way you pay for your own backhaul fibre.
  2. Grandfather a few old plans for a while, but eventually transition all your customers over to the "Fair Share" plan. (You might keep a cheaper plan or two around, but only based on instantaneous speed- no monthly caps, overage fees or other nuisances.)
  3. Now that your billing process amounts to little more than "Has customer paid? Yes/no, if yes, allow connection", you don't need much in the way of staff or infrastructure for billing and account services. Get rid of all that back-office cruft and use those staff for customer and technical support.
  4. With a simple billing structure and an easy-to-understand plan that will never lead to unexpected charges, your customer support requirements will drop by half or more. You can ditch the outsourced call centres; the Canadian staff you've just freed up with the billing office reforms should be enough to handle it.
  5. Now you're a leaner, more competitive and more customer-friendly company. Your billing structure is directly reflective of the cost structure of your operations (a tower costs a heap of money to install and provision, but apart from back-haul fibre- which is billed by capacity, not by usage- it's virtually free to operate). Customers will never be confused by your service rules; they simply pay one set monthly fee to always get the best service that's technically possible at any moment.

This is where we find out if any of you are serious about keeping the Americans out of the Canadian telecom market. If one of you does something like the above, we'll know you're willing to put your money where your mouth is and show real innovation in this market. If the status quo holds, though, Canadian consumers will consider that to be proof that you're all stuck with your heads in the sand and are either unwilling or unable to turn yourselves from billing companies into service companies. If you aren't willing to compete, aggressively and fairly, then we will welcome the Americans with open arms. And, stupidly rigged rules or not, they'll have a good shot at beating you.

It's your choice. Choose wisely.



Add new comment