Ahead of the busy back to school shopping season, when new customers are expected to purchase phones, the two large wireless operators in Canada have increased their data overage fees for new users.
Rogers Communications increased its overage fees to $7 for 100 MB from its earlier rate $5 for 100 MB, similarly Bell Canada too said it was increasing its data overage per 100 MB by $2 to $7. Industry experts said the move was intended for new customers to choose pricier package plans to avoid overage charges.
Data overage occurs when, for a given billing cycle, a user exceeds their data plan’s monthly data allowance. They then have to choose an add-on plan that will suit their requirements. According to Canadian wireless regulations data overage charges are capped at $50 per account per billing cycle unless a customer provides consent to buy more data, but the higher data overage means customers will reach the $50 limit faster than earlier.
While data consumption fees has become an important revenue generator for wireless carriers, with users needing data on multiple devices for various purposes like streaming and live videos apart from usual videos and pictures. The move comes in the wake of the CRTCs decision to stop device-unlocking fees as providers will lose out on significant revenue from that.
While both companies dint provide any reason for increasing their data overage charges, the new charges will only apply to new customers or old customers who upgrade their plans. The companies also said customers will receive frequent notifications about data overage which would prevent many users from incurring these fees. Rogers also said only around 10 percent of its users get data overage fees.
Many industry experts also suggested that many entry level customers who are looking to buy new phones this fall in time for back-to-school would have to deal with the higher prices. Higher overage prices are intended to make customers buy bigger data packages rather than having to deal with overage issues, they said.
While some experts felt that the competition bureau’s stand on retail telecom prices was not enough, others said the increase in overage fees was overdue. However other telecom providers have not increased their overage fees and Telus Corp said it had no immediate plans to hike its current overage charge of $5 for 100 MB.