Canada

How Bell Canada got the iPhone


BellCanada1902A Bell Canada (BCE) press statement Tuesday made official what the Canadian press has been reporting since Monday: that the company, in partnership with Telus Corp. (TU), will start carrying Apple's (AAPL) iPhone in November.

The deal puts an end to the exclusivity that Rogers Communications (RCI) has enjoyed — to the dismay of many Canadian iPhone owners — for more than a year.

It's news that is likely to be closely watched in the United States, where AT&T's (T) exclusive contract with Apple is expected to expire next year — opening the door, in theory, for Verizon (VZ).

But only if Verizon's network can be upgraded in time.

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Apple-Rogers falling out: A story too good to be true?


Daniel Smith, a Canadian sales and marketing consultant with an eclectic blog called Smithereens, posted on Saturday what he called "a very plausible rumour" about the launch at of Apple's iPhone 3G on the Rogers Communications network.

The gist of the post — entitled "Apple Flips Rogers the Bird" — was that Apple and Rogers, Canada's largest mobile carrier, have had a falling out over the negative publicity generated by Rogers' pricing plans for the new iPhone that goes on sale Friday morning. Rogers' plans require a three-year contract, have no unlimited data option and, compared with comparable AT&T (T) plans, offer a third of the calling time and half as many text messages. (See here for the petition for rate relief that has gathered more than 43,000 signatures and here for the Vancouver Sun editorial urging customers not to buy an iPhone.)

The net effect, Smith claims, is that "thousands" of Canadian part-time workers hired by Rogers have lost their jobs and untold numbers of iPhone 3Gs earmarked for Canada have been diverted to Apple's European partners.

On Friday, wrote Smith, "while the American giant slept, the Canadian telecom industry was a-buzz with information, albeit all of it internal and very hush-hush….

  • First, an employee of Apple Canada sends a text message to my source that says something to the effect of: "You guys are screwed for iPhone," but will not respond to multiple replies asking for clarification.
  • Next, an employee at competing handset manufacturer RIM (Blackberry's parent) (RIMM) sends my source a text soon after saying there are rumours of an Apple-Rogers fallout.
  • Then, my source receives a call notifying him that all the part-time staff who had been hired for next week's launch have been fired without notice.
  • And finally, a senior Rogers rep confirms to my source that Apple has decided to divert a large percentage of their planned Canadian shipment to Europe and that each Rogers store may now be getting as few as 10-20 units. This is ostensibly due to Apple's displeasure over Rogers' high data and voice rates." (link)

Not surprisingly, given the passions surrounding the iPhone 3G release in Canada, Smith's "plausible rumour" soon took on a life of its own. By Monday it had risen to the first page on the Techmeme news aggregator and spawned more than a dozen secondary posts.

But none of the follow-ups have been able to provide independent confirmation of any details in Smith's story, and now Smith himself is backing away from some of his claims.

In a Sunday update he added this caveat: "Apparently, only certain dealerships took on additional staff for the launch, although most urban locations did. Also, some dealerships may not have let all their iPhone help go, but others definitely have. It's important to clarify that any decisions to let staff go were made at the individual dealer level, and not by Rogers corporate…at least not directly."

In a second update he replaced the phrase "ostensible due to Apple's displeasure" with "possibly due to Apple's displeasure" and added this:

"Although no per-store numbers can be confirmed, the verbiage used by head office is apparently that numbers will be "significantly reduced" and that stores should "exercise caution" not to over-promise. Europe has also been reconfirmed as the destination for the allegedly diverted units."

Finally, he showed up on The Mac Observers' Apple Finance Board to post what he called a "pre-emptive defence."

"This could be something as simple as a shipping or production delay that's been blown out of proportion. I haven't ruled that out. … Something's definitely up, whether it is indeed an Apple power play is up for debate." (link)

Indeed.

Neither Apple (AAPL) nor Rogers (RCI) have commented on the rumors.

UPDATE: In a private message, Smith says his estimate of "thousands" of temps laid off by Rogers, which he posted in an online forum, was an extrapolation, and that on reflection "hundreds" is probably more like it. "I misspoke in that forum entry and I apologize," he writes. "It is unfortunate because the intent of the story was not to spread untruths, and I have been trying to clarify and add to the conversation as much as possible to avoid doing so."

UPDATE 2: AppleInsider's Kasper Jade reported on Tuesday that Apple, "disgusted with Rogers Wireless," has decided that that Apple's Canadian retail stores — there are six in all — will not be selling the iPhone 3G on July 11, as previously planned. Jade says that although most of the Canadian stores he contacted were not sure whether they would be selling the phone, "one representative ultimately confirmed that Rogers and its partner stores will be the only place to buy iPhone 3G come Friday." The Canadian Apple Stores we called Tuesday morning could not confirm AppleInsider's report, and later that day CNet's Tom Krazit reported that none of the Apple stores outside the U.S. will be selling iPhones this week.

UPDATE 3: In a last-minute concession, Rogers on Wednesday offered a special 6GB data plan for 30 Canadian dollars ($29.76) a month. It will be available to customers who activate by August 31 on a three-year contract and can be added to any voice plans currently available. (link) It's not clear how many of the 57,000 who signed the original rate-relief petition will be satisfied. Rogers is betting that most will; it is opening its stores early on Friday and limiting purchases to 2 iPhones per customer. But a new petition drive has already been started under the banner: Rogers its (sic) not enough.

The iPhone in Hong Kong: A bargain at $24 a month


Even as Canada's Rogers Communications and Germany's T-Mobile compete to offer the worst voice and data plans for the iPhone 3G, Hutchison Global Communications on Monday unveiled what may be the best.

Hutchison (HTX), which stuck a deal with Apple (AAPL) in May to bring the iPhone to Hong Kong and Macau, will be offering customers a choice of two pricing plans:

  • 8GB iPhone for HK$2,938 ($377) plus HK$188 per month ($24/month) for 500MB voice and data
  • 8GB iPhone for free plus HK$498 per month ($64/month) for 2,200 minutes airtime and unlimited data.

"We believe the (minimum price) plan is comfortable enough for average data users," a Hutchison spokesperson told the Dow Jones Newswire, adding that 500 megabytes will allow users to send 250,000 emails or browse Apple's Web site 2,000 times. (link)

Bottom line in U.S. dollars: Including the cost of the phone, Hong Kong residents will pay between $955 and $1,532 over the life of a 24 month contract.

Some comparisons (all expressed in U.S. dollars for the equivalent of a 2-year contract):

  • Hutchison in Hong Kong: $955 (500MB voice and data) to $1,532 (2,200 min., unlimited data)
  • O2 (TEF) in the U.K.: $1,698 (75 minutes, unlimited data) to $3,588 (3000 min., unlimited data)
  • AT&T (T) in the U.S.: $1,879 (450 min., unlimited data) to $3,318 (unlimited voice and data)
  • T-Mobile (DT) in Germany: $1,366 (500MB data) to $3,374 (5GB data)
  • Rogers (RCI) in Canada: $1,624 (150 min., 400 MB data) to $2,932 (800 min., 2GB data)

30,000 Canadians petition for iPhone rate relief


It's taken more than a year for the iPhone to make its way across the world's longest undefended border, which may help explain why so many Canadians are upset this weekend.

On Friday, Rogers Communications (RCI) — Canada's largest mobile carrier and the only one with a contract to sell Apple's (AAPL) iPhone north of that border — announced the details of its voice and data plans. They struck some would-be customers as unreasonably high and unnecessarily restrictive, especially when compared with those in the U.S. and the U.K., and thousands of angry Canadians have made their feelings known in various homegrown websites, including eh Mac, GeekCulture, and blog.r4nt,.

But the largest and most pungent protest is a petition whose original name was unprintable, but which can now be found at ruinediphone.com. Its stated goal is to gather 10,000 names — accompanied by a letter to Steve Jobs — by July 11, the date when the iPhone 3G goes on sale in Canada. By Sunday morning it had already gathered more than 10,000; by Monday it had topped 15,000.

The letter to Jobs begins:

Dear Steve,

My name is James and I would like to thank you for creating the wonderful iPhone device. We really think that you will change the world with it, just as you changed the world with the iPod. We were so happy to learn that on July 11th, we would finally be able to buy the iPhone and legally use it in Canada.

To our great disappointment, Rogers Communications Inc. has announced VERY unfair rates in comparison to AT&T in the United States and to other authorized wireless service providers around the world…. (link)

What's wrong with Rogers' rate plan?

For one thing, it comes with a mandatory 3-year contract. In the U.K., O2 offers an-18 month contract and throws in the iPhone for free. And although both AT&T (T) and Rogers offer calling, data and text messaging for $75 a month, Rogers at that price gives Canadians a third less calling time, half as many text messages, and puts a 750 MB cap on 3G data usage — with steep fees for users who go over their monthly limit.

It's this last element that has struck Canadian Apple fans as most unreasonable. One of the features that makes the iPhone so popular is how effortless it makes websurfing and multimedia downloads — activities that can quickly rack up the megabytes. That's why heavy users usually pay extra for unlimited data usage.

Rogers claims that its top data plan — 2 GB per month for $115 — is enough to download 16,000 webpages. But users point out that a single Facebook page can account for 1.2 MB, which reduces browsing from 16,000 pages per month to 1,600.

"It's like they're deliberately driving customers away," wrote wolfscribe on CBCnews. "I'll keep my money, ride out the contract and look for a new provider."

Rogers does offer unlimited data through Wi-Fi sites, and it defends its pricing on 3G data as consumer friendly. "Unlimited plans could end up costing customers more for what they don't use," argues a spokeswoman. "Our iPhone plans more than accommodate the vast majority of customers." (link)

Petitioners are asking Steve Jobs to pressure Rogers to offer a better plan — or cut a deal with another provider who will.

[UPDATE: As of Monday 9PM, ruinediphone.com is no longer responding, a development likely to spawn all sorts of Rogers Communications conspiracy theories. The site had reported collected more than 20,000 signatures before it went down.]

[UPDATE 2: The site is back up (DNR problems, we hear, not corporate censorship) and had gathered more than 30,000 signatures as of Thursday noon. Meanwhile, Ernst & Young has seen fit to name Ted Rogers, CEO of Rogers Communications, its 2008 "Entrepreneur of the Year." The award will be presented at a banquet in October. You can write your own punchline in the comment stream.]

Below the fold: Rogers' iPhone rates.

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iPhones in Switzerland, Spain, Poland and beyond


News and rumors about the iPhone's global expansion keep rolling in.

Citing a source at Swisscom, Lausanne-based Le Matin Online reported on Thursday that Apple had concluded an agreement to bring the 3G iPhone to Switzerland this summer (link, in French). Swisscom, with 5.1 million subscribers, is the country's largest mobile carrier.

Meanwhile, France Telecom CFO Gervais Pellissier said on Wednesday that his company was in talks with Apple (AAPL) to extend their partnership beyond France and into "more than just two countries." He was responding to a journalist's question about whether the company was hoping to secure rights to sell the iPhone in Spain and Poland, the largest countries in Europe still without an iPhone carrier. (link)

Also on Wednesday, America Movil (AMX) confirmed that it had signed a deal to bring the iPhone to 16 countries in Latin America and the Caribbean. America Movil, based in Mexico City and controlled by billionaire Carlos Slim, has 159.2 million subscribers. (see here)

Earlier this week, Vodafone (VOD) announced that it had signed an agreement to carry the iPhone in 10 countries, Australia, the Czech Republic, Egypt, Greece, Italy, India, Portugal, New Zealand, South Africa and Turkey. The same day, Telecom Italia announced that it had also secured the rights to sell the phone in Italy, leading to speculation that Apple had abandoned its original iPhone business model and was no longer demanding revenue sharing in return for exclusivity. (see here)

But France Telecom's Pellissier said that his company was sticking to the terms of its original agreement, which gives it the exclusive right to sell the iPhone in France for another two and a half years. France Telecom is resisting pressure to lower the price of the original iPhone — as O2 and T-Mobile did in the U.K. and Germany, respectively — at least until the 3G iPhone arrives. "We’ll see with the next model,” said Pellissier, according to Macworld, adding that the arrival of a new iPhone “will boost sales.” Pellissier declined to give exact sales figures, but said his company had sold more than 100,000 since November, 2007.

According to Piper Jaffray analyst Gene Munster, exclusivity agreements may soon be the exception, not the rule. He notes that the Vodafone announcement, unlike press releases issued by the first wave of carriers, "did not reference any exclusive terms." He expects Apple will start to feel the impact of the loss of revenue sharing from these nonexclusive deals in 2009, but still views them as a net positive for the company.

"While we expected an international rollout in CY08 (with the exception of China), this announcement is both sooner and more expansive that we were expecting. … The iPhone's international rollout is about 6 months ahead of our original expectations."

On Tuesday, April 29, Rogers Wireless, Canada's largest cellular carrier, announced that it too had signed a deal to carry the iPhone "later this year." (link)

Meanwhile, stocks of first-generation iPhones are running low. Spot shortages continue in the U.S., and Engadget reports that O2 on Thursday posted a notice on its website that iPhones — both the 8G and 16G models — are no longer available in its stores. The 8G model was on sale in the U.K., but the 16G model sold at full price until the shelves ran dry.

[Thanks to reader David C. in Switzerland for the tip.]

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