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April Fool's from Telus

Monday, March 31, 2008 | 10:02 AM ET

By Peter Nowak, CBCNews.ca

There's an interesting trend going on in the Canadian cellphone market - the country's Big Three carriers are admitting their rates are too high. But before you think they're finally coming clean, hold on a second: they're doing it through indirect means. The worst offender so far: Telus Corp.

The Vancouver-based carrier, the third-biggest of the Big Three, has for some time been losing out to Rogers and Bell when it comes to signing up prepaid customers. Rogers and Bell run their own respective "discount" brands, Fido and Solo, so on April 1 Telus is launching its own discount brand called Koodo, which might as well be called "Metoo." The thing is, Telus won't say a peep about it and finding a single mention of the brand's owner on the Koodo website looks to be impossible. Even my interview with "chief Koodo officer" Kevin Banderk was inexplicably cancelled today. Very mysterious.

Here's the sales pitch from Koodo's website:

We were created differently, with you in mind. We believe in being simple and straightforward. And we’re here to stop bill bulge. You see Canadians are consuming fatty, unnecessary mobility features like movies, video calling and satellite radio. All the while being weighed down by the excess cost. And for most, it’s proving to be a killer – on their wallet.

Koodo Mobile is here to help. We don’t do excess fees – in fact, we even pay the System Access Fee for you. We don’t make you pay an activation fee in-store or online. And our slimmed down prices will help you shed that stubborn cellular cellulite you’ve been carrying for years.

There's lots wrong with that, as others have pointed out. The bit about the system access fee is particularly disingenuous and could land Telus in further trouble. There is a class-action lawsuit currently going on that accuses the carriers of misrepresenting what the fee is for. The Koodo website makes it sound like it's something other than pure revenue for Telus.

Why the subterfuge? It's a trick endemic to Canada where the carriers know their rates are too high but don't want to admit it, so they set up phantom discount brands that indirectly challenge their main brands by advertising lower rates. It's a twisted Twilight Zone of logic that only makes sense in our messed-up cellphone market.

In the end, the phantom brands don't make a difference. I just did my taxes and found my monthly Fido bill in 2007 averaged to $69. Rogers' average monthly revenue per user was $72.21, so evidently I didn't get much of a discount by being on the company's "discount" brand.

As for Koodo's rates? Well, just like Fido, once you add on the stuff you really want - like voice mail or caller ID - it's pretty much run of the mill. Think Koodo is going to provide good value? April Fool's!

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Greg Farkas

Vancouver

Cellphone companies in Canada get away with robbery. Once I made the mistake of checking the BC Ferries schedule on my rogers cellphone, to later find that transfering 49kb of data cost me $20. I find that outrageous in an environment where unlimited internet access is almost taken for granted at a low price. We need more competition from some other brands that are not fat from stealing money out our pockets.

Posted April 1, 2008 10:56 AM

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