The Canadian cellphone industry and I guess the cellphone industry in the United States as well indulge in what I'd like to call "Legal Extortion". Extortion, in the strictest sense is without a doubt illegal: forcing someone to pay up by threatening them is a monstrosity. Ironically, service providers in the big two North American nations fleece their customers left, right and center by charging exorbitant usage fees and befuddling them with vague and totally lame "plans" which they bandy about with glee at customers' faces.
First things first. The contract system, which in principle is an excellent idea whereby users essentially get their handsets for free by remaining "loyal" to service providers, is tweaked subtly by the "extortionists" so that customers eventually end up paying as much as they would for a new phone or maybe even more. It kind of reflects one of the important tenets of gambling: "The house always wins!" Certain companies have come up with schemes like the "tag" by Koodo mobile or "supertag" by Virgin mobile. You get your phone for free or at a subsidized rate and the rest of the list price is paid off by the company. How? Every month, a sum equal to 10 % of your bill is paid by the company towards the price of your phone. If you think just a little more, they're actually encouraging you to use more every month so that your phone's price is paid off faster! It is only slightly better than a contract because you aren't technically bound to one. But, the phone price would only get paid off if you remain with the service provider long enough. If you do exit earlier, you'd have to pay off the remainder of the list price. After that the phone's yours. But, there's no knowing if your phone would support a different service provider or the one you want. This is why the industry should adopt a system just like the telecom industries in Asia where you purchase your own cellphone and choose your service provider which does away with the locking and unlocking of phones. By the way, did I mention that there is also a charge to unlock cellphones?!?! You could do it yourself if you knew how to but you could end up with a bricked phone as well.
Next, you have a host of very confusing plans. Voice plans, data plans, student special plans, family plans etc. "We cater to your different needs" is what they tell you. Like hell!
The terms of each plan are marked with numbers or asterisks in the end forcing you to squint and read tons of fine print. Every plan is lacking in one feature or another and this forces you to purchase "add-ons". Whichever plan you choose, you end up paying pretty much the same for all the services you need. Also, the terms of each plan and the usage rates are subject to change "without notice". You would thus use a service for an entire month, assuming it to be free only to realize that you have to pay a bomb when you get your bill statement.
When you get your unexpected fat bill, you decide to take it up with the service provider and call customer care. From what I've heard, customer service executives are really stupid and dumb and at times can be rude and unhelpful as well. Not only is your bill statement reversed, you end up very angry and smarting with your experience with customer care. Sometimes, it takes hours for you to get hold of a customer care representative. Ultimately, you realize its no use arguing your case out because the customer reps too can give lame excuses for the mistakes of the company. I guess that's what they're paid for!
There are also a bevy of ancillary fees that have to be paid for and which the service providers conveniently relegate to fine print. There is a one time activation fee which needs to be paid when one gets a cellphone connection for the first time. This can be as high as 35 $. There is also a system access "privilege" fee which needs to be paid every month for using the service provided. (What the hell are we paying usage fees for then??). There are also several other ridiculous fees that have to be paid like emergency 9-11 fees and provincial regulatory fees. However, recently some providers have mercifully done away with these.
New start-up telecom companies attempt to rectify some of the evils of the system by providing better plans without contracts and activation and system access fees. They do gather a good base of loyal customers too. But the major players invariably try to acquire the company and in most cases succeed as well thereby stifling any healthy competition which would have helped lower costs and helped provide better service.
An individual belonging to a low income group can find such practices largely draining on his finances. One could argue that he could do away with using cellphones entirely but that is very unfair. A cellphone has become an essential need for people today.In most cases, it is a must today.
The current high rates and host of confounding plans in the North American market can be attributed to the small customer base in the land thus prompting service providers to recover costs and maintain high margins by charging the customer whimsically. However, I hope that in the coming years, the industry is reformed and that it is also the customer that benefits along with the service providers. As I mentioned earlier, they are clearly engaging in "legal extortion"!
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