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Death Grip:

Caught in a Contract and Cannot Quit?

 
   

July 2010 - IGB Grant +1 514-849-3508, Amit Kaminer +1 416-413-1636, with Bianca Anghel

   
    OVERVIEW  
 

 

 

For many people, mobile phone contracts are a source of significant frustration. You cannot get what you want, when you want it. Or you cannot change carriers or downgrade service plans without incurring a significant financial penalty.

"Mobile contract" is a term that seems to upset many Canadians. Yet, the reason that we have wireless contracts is supposedly to help Canadians; to enable them to upgrade their wireless handsets without paying the full price of the new device. We are eager to grasp the benefits of the latest feature phone or smart phone, but we are reluctant to pay the full price.

The principle is clear – and Canada is no different from other countries: subsidies are available in most markets. What is different in Canada, however, are the contract terms, which are some of the longest in the world. Given that the costs to keep or cancel your contract are tied to the contract term, the penalties Canadians are paying are downright draconian.

Canadians are concerned about these costs, making mobile contracts amongst the most complained-about consumer service issues today. Now, governments are wondering if they ought to get involved. Indeed Quebec already has.

Our paper will examine the issues related to wireless contracts and early termination.

 
   


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Thursday, 18 December 2014

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