When Bell and Telus begin carrying the iPhone in November and end Rogers’ monopoly on the popular device, consumers shouldn’t expect to pay much less for the smartphone.
With three wireless carriers competing for iPhone subscribers, price wars shouldn’t be expected, economics experts say.
Rogers Wireless was the first to carry the iPhone in Canada back in July 2008. Today, the range-topping 32GB iPhone 3GS costs $299 on a three-year term.
But Ryerson University economics professor Eric Kam says he’s not entirely sure that consumers will be saving big bucks with other carriers in the mix.
“I’m not 100 per cent sure that’s going to happen,” says Kam. “If prices fall on this thing, I think it will be a minimal price drop.”
He says that even though new providers will increase the supply of iPhones (a quick check of Rogers and Fido websites shows the latest 3GS model is hard to find), there could be strong demand by people who are still with Bell or Telus – and those who prefer not to go with Rogers.
Bell and Telus announced Monday they’re completing a new high-speed 3G network in November, ahead of schedule and in time for the 2010 Olympic Winter Games in Vancouver.
But University of Toronto marketing professor Sergio Meza also says he doesn’t think there will be increased competition.
“(Carriers) could do several things - new plans, reduce the prices - however that has to be a short-term move because they’re going to lose money every time they subsidize the handset,” says Meza, who’s a visiting professor at the University of California, Davis.
He says the telecom providers may try to advertise a different image or bundle new services to attract customers.
“If you perceive the products to be the same, then you will go with the cheapest. But if you get additional features, you may make a different decision.”
Should carriers cut the prices of monthly plans, the savings will probably be minimal as services are re-packaged and re-branded.
“They’re going to find a way to make their money,” says Kam. “Your bill won’t change much, and if it does, it’s by $1 or $2 a month.”
The Palm Pre – launched this summer by Bell with several features that compete with Apple’s smartphone – will now face added competition.
But Bell spokesperson Julie Smithers says the carrier is still committed to the handset.
“The Palm Pre still continues to be exclusive to us and continues to be one of the hottest phones launched,” she says.
Kam, however, doesn’t agree. “It seems to me that between the Blackberry and the iPhone, they’re cutting the Palm Pre’s knees,” he says.
Launch dates and pricing are yet to be announced for the iPhone from Bell or Telus.
