Bell sacks cellphone system access fee on Solo phones
Last Updated: Friday, November 7, 2008 | 1:10 PM ET
By Peter Nowak CBC News
Bell would have got clobbered over the holiday season if it hadn't dropped its system access fee, analysts say. (Ryan Remiorz/Canadian Press)Bell Canada Inc. is axing the system access fee on its Solo brand cellphones to match similar moves by rivals Rogers Communications Inc. and Telus Corp.
The Montreal-based company announced on Thursday it was discontinuing the system access fee, as well as the 911 charge, for Solo customers who sign on to new two-year contracts. Bell later clarified, however, that the caveat was an error and that customers do not have to sign a contract in order to avoid the charges.
The offer is good until the end of the year. Bell spokesperson Julie Smithers said the new offerings will be re-evaluated then.
The system access fee for Solo customers ranges from $3.95 for prepaid subscribers to $6.95 for those on postpaid plans, or those who receive a monthly bill. The 911 fee is 50 cents for all customers.
"Solo Mobile always offers the very best value in Canadian wireless," said Bell mobility president Wade Oosterman in a statement. "Now we’ve sweetened the deal further with new pricing."
Bell's move comes two days after Toronto-based Rogers, one of its main rivals in the wireless market, dropped both charges on its Fido brand. Customers opting to go with Fido, however, do not have to sign on to a term contract to avoid the fees.
Vancouver-based Telus was the first major carrier to discontinue the charges with its Koodo brand, which it launched in March.
That left Bell as the only major cellphone company still charging the fees on its discount brand. All three companies still charge the fees on their core brands.
Bell also announced new pricing plans starting at $15 a month, also matching Fido and Koodo. The company also added two smartphones to its Solo offerings, the Samsung Cleo and the BlackBerry Pearl.
Industry analysts said Bell had no choice but to follow its rivals in chopping the extra fees heading into the busy holiday season, when cellphones are a popular purchase. The company's move also looks to have cemented the imminent death of the system access fee, which consumer groups have identified as the most hated aspect of Canada's wireless market.
"It is certainly a sign that the [access] tax is on the way out," said Iain Grant, president of the SeaBoard Group telecommunications consultancy. "[It's] totally unsustainable in any sort of competitive marketplace."
Smaller cellphone providers that resell airtime from the big three providers, such as Virgin Mobile and President's Choice, do not charge the extra fees. A host of new wireless providers starting up next year are also not expected to charge them.
Bell, Rogers and Telus are now under pressure from consumer groups to explain why they are still charging the system access fee on their core customers but not their discount-brand subscribers. All three companies say the charge is for ongoing maintenance and investment in their networks, yet their discount services use the same networks as their main brands.
Smithers said Solo phones have fewer features and place less strain on Bell's networks than handsets from its core brand.
"It's not as high-end of a service," she said.
All three cellphone companies, as well as regional providers Aliant, MTS Allstream and SaskTel, are facing class-action lawsuits over both the system access fee and the 911 charge. The access fee lawsuit received certification last year and is seeking the return of nearly $20 billion, while the 911 case was lodged in June.
Both lawsuits claim the cellphone providers misrepresented to customers what the charges were for.
