Family discounts and easier device payment plans launch, too
VANCOUVER – The day after its three-week, $75/month with no overage charges wireless promotion officially ended, Telus has decided to make the lower price permanent – and to add some new wrinkles.
Today, the company launched what it’s calling “Peace of Mind” rate plans, which begin at $75/month for 10GB of high speed data with any overage delivered at 512 Kbps. There are also plans at $95 for 20GB and $125 for 50GB. Speeds are slowed for users who cross their limits in those plans, too. While Rogers – when it was first with the $75/10GB plan last month (with overage slowed to 256 Kbps) – called its new Rogers Infinite plans “unlimited”, Telus has chosen a different descriptor, calling it “endless data” instead.
Telus chose “endless” over “unlimited” because even though there’s no maximum on the amount of data which can be consumed, the speeds at which that data is delivered is limited past those GB thresholds. Most other carriers have also jumped on the $75/10 GB bus, but we don’t know yet if their re-pricing will be made permanent, though it’s likely it will be.
“We want to be very transparent, that at the end of the data bucket, we do bring the speeds down, and the reason why we bring the speeds down is so that the quality of the network is fantastic for everybody,” said Jim Senko, Telus’ president, mobility solutions, in an interview with Cartt.ca. “The use case that we're trying to avoid is that one user who is using hours and hours and hours of video consumption can ruin the network performance for others in that area. So we wanted to focus more transparently on the fact that we're eliminating data overage.”
Telus Easy Payment device financing, also launched today, gives customers access to any smartphone in its line-up for no up-front cost, with no interest financing options to pay for the handset over 24 months – alongside new billing which clearly separates the device cost from a customer’s monthly rate plan fee. This makes monthly bills clearer and device repayment easier to track, while removing device subsidies from Telus’ balance sheet.
Senko’s primary regret when it comes to financing increasingly expensive smartphones, however, is that he can’t offer a 36-month plan, which would lower customers’ monthly expenses even further. The 2016 CRTC wireless code forbids any wireless contracts longer than 24 months, which is frustrating for a large segment of Telus’ customers, he explains.
“We would dearly love to provide them 30-month or 36-month financing because that would allow them to get a zero dollar device up front and pay less monthly – and customers are actually asking us for that.” – Jim Senko, Telus
Thanks to improved durability, better battery life, fewer iconic handset innovations and the sheer cost (the iPhone XS Max retails for over $1500, for example) approximately one-third of Telus customers keep their devices longer than 30 months, said Senko, “and we would dearly love to provide them 30-month or 36-month financing because that would allow them to get a zero dollar device up front and pay less monthly – and customers are actually asking us for that.
“There's a big base of customers that love 24 months and they love residual value programs like Bring it Back (where customers can get a rebate on an upgrade by returning their used device), and that's fantastic for them, and that's 70% of the customer base. Then, 30% of the customer base would love to have longer financing contracts so that they could get their device and pay less monthly, and I just really believe it's the right answer for our customers,” added Senko.
Also announced today is the Telus Family Discount, which provides incremental savings off monthly rate plans, depending on how many family members connect. Two family members will each receive $5 off a month, three family members $10 each, and four or more family members will each receive savings of $15 a month.
(See image below [click to enlarge] for the full breakdown of the new Telus offers.)
All of these changes are in line with what customers have been demanding, added Senko (the CRTC and federal 
government have been demanding lower prices and clearer bills, too). “We pride ourself on being customer first, and yet there's complexity in our pricing… As an example, in the old world, we had over 200 different rate plans, so customers were very confused on: ‘what do I pick? How am I paying off my device?’ They don't understand the separation of device and service rates, those kind of things,” he explained, no to mention their own salespeople.
This shift to simplify will also be a net positive to the bottom line, hopes Senko (Rogers and Bay Streeters and others are hoping for the same…). While some customers currently paying more will inevitably opt for a lower price, it’s hoped the simplicity of the $75-and-no-overage pitch will resonate and see customers from other, lower cost and data plans, or from other brands, take the new offer.
“This is a much simpler value proposition for us to support, which will help us reduce our cost to serve and will also help us to be able to accommodate more customers in our stores, especially during peak volume.” – Senko
Plus, simpler offers make it easier on company sales reps, too, driving down costs for the carrier thanks to fewer calls, and shorter, happier, customer interactions. “There will be customers that step down, but that will also improve loyalty, so we think churn will improve,” said Senko. Also, “many customers that are with the flanker brands will step up, which will offset those stepping down.”
As well, “this is a much simpler value proposition for us to support, which will help us reduce our cost to serve and will also help us to be able to accommodate more customers in our stores, especially during peak volume, and… when you look at how costs have been escalating in the Canadian marketplace, where a lot of that is due to exchange rates and device costs, creating transparency on what a smartphone costs is just good for everyone… fairer for everyone.”
But why $75? What’s the magic in that number, especially since Freedom Mobile’s Big Gig is $60 for 10GB, with no overage fees?
“We think that this is priced right and value proposition has both value and cost,” said Senko, “and our network performance is superior to Freedom, so we believe the customers will choose to pay a premium for the quality of experience.”
Finally, this new pricing makes wireless cheaper in Canada than in the U.S., he added, if the exchange rate is factored in, he added.
“When you look at a $75 entry, no overage plan, and if you were to convert the U.S. carriers (plans) to Canadian dollars, the entry level unlimited price point at Verizon would be $106 Canadian, at AT&T it would be $106 Canadian, the unlimited entry plan at Sprint would be $80 Canadian, and it would be $87 at T-Mobile.”
