Reason for low growth
Research In Motion Ltd., riding high after finally gaining entry into China's lucrative wireless market, blasted Canadian cellphone companies yesterday for their high data rates and for not competing against each other strongly enough.
The Waterloo, Ont.-based BlackBerry maker said carriers in other countries, particularly Western Europe, "get it" and are lowering prices on services such as mobile web browsing.
That has led to more subscribers, cellphone usage and revenue overall from RIM's consumer-friendly BlackBerrys such as the Pearl and Curve.
"They've got these entry-level service plans that they're putting out there that you're not seeing here in Canada," said Don Morrison, RIM's chief operating officer.
"It makes the BlackBerry proposition that's the Pearl or the Curve that much more palatable because now they've got an affordable plan. We don't see that here in Canada yet."
Mr. Morrison said RIM has been trying to convince Canadian carriers to lower their rates for some time.
"We haven't seen a carrier yet take up the banner of really going after the mass market," he said. "We think it's to their benefit."
Canadian carriers could increase the number of BlackBerries they sell each week by eight or nine times if they lowered their prices to the levels seen in such countries as Germany, France and Spain, he said.
RIM, which last week reported it had won access to China and that first-quarter revenue increased 76% on the back of strong international BlackBerry sales, is facing slowing growth in North America.
This is partly the result of greater BlackBerry penetration rates here, Mr. Morrison said, but the high rates charged by Rogers Communications Inc., Bell Canada Inc. and Telus Corp. also contribute.
Rogers, for example, offers customers 200 megabytes of download capability for $100 a month. In comparison, T-Mobile in Germany offers 400 megabytes for about $50, or 12? per megabyte versus 50? for Rogers.
RIM's comments lend considerable weight to the argument that the federal government should intervene with measures to help potential new carriers get into the market through next year's auction of wireless airwaves.
Potential new entrants, including MTS Allstream Inc. and Quebecor Inc., say the existing three players are operating an oligopoly that is keeping prices high and non-voice usage low.
"They're coming down on the side of something [that] has to change," said Iain Grant, president of the Seaboard Group telecommunications consultancy.
"For RIM to say, 'We know the world of data and given our world perspective ? rates in Canada are pretty high,' that should ring all the bells on Parliament Hill."
Canadian carriers, meanwhile, maintain their rates are competitive and getting lower all the time. Rogers last week told the government that Telus had recently increased the amount of data it offered customers by a factor of eight, yet the company didn't raise prices. That spurred similar moves at other carriers, Rogers said.
RIM's sentiment, however, echoes that of fellow tech giant Google Inc., which is increasingly banking on mobile usage of services such as Gmail and Google Maps.
"There's no doubt that wireless data pricing is higher in Canada," said Andrew McLaughlin, director of global public policy for Google, and as such usage of those services is lower here.
Lawrence Surtees, vice-president and principal analyst of Canadian communications research for global technology consultancy IDC, said the high prices are holding back innovation and productivity.
"With wireless search our data charges tend to be among the highest in the world, and that's going to be an inhibitor," he said.
"We could have consumers latching on much more and faster if the prices weren't so punitive."