How Canadian Mobile Phone Customers Can Avoid Exorbitant Data Roaming Fees – the Back-Story

Wednesday, June 15, 2011

Some time back around 2004, Fido, then an independent company under the Microcell banner, was offering a $50 per month flat-rate data plan.  While this was offered on the Edge/GPRS (2G) network, the slower predecessor to the current 3G and 4G/LTE standards, it provided users with Unlimited data usage throughout the US and Canada.  Regardless of your data usage, you paid the same $50 per month – and this included tethering to a laptop.  When Rogers purchased the dying carcass of Fido in 2005, they eliminated the offering for new customers but allowed existing customers to be grandfathered-in.  They did eliminate the US aspect of the plan eventually (the most valuable feature of the plan to customers) but continued to grandfather existing customers in until 2008 and beyond.  With the advent of the first-generation iPhone in the United States, I was able to obtain one from an AT&T store, hack the carrier SIM-lock, and use it with abandon with my Fido Unlimited plan, at a time that others were getting their first brutal & costly education in using data-hungry smartphones on metered data plans.  The gravy days were over soon though and I abandoned my Unlimited plan in 2008 with the official release of the iPhone 3G in Canada and switched to a domestic 3G plan.

Fast-forward to today.  No incumbent carrier in Canada currently offers an “unlimited” data plan, and to be fair they have become less prevalent in other countries as well, largely due to abuse by overzealous nerds.  While new entrants are nipping at their heels, the big Canadian carriers (Rogers, Telus, Bell) are highly profitable, and much of this is due to charging outrageous data roaming rates.  Just this week Telus finally admitted that data roaming rates were too high and advised that it would be cutting rates by approximately 50%.  Half of a lot is still a lot however.

As in most countries, many of us pay reasonable rates for domestic data.  While there are no truly “unlimited” plans, there are generous data plans that provide a fair price for moderate usage.  I currently have a 6GB data plan through Fido (now a subsidiary of Rogers), offered during the launch of the iPhone 3G, and typically re-offered as a time-limited promotion with each annual iPhone refresh, for which I pay $30 per month.  Even though I would consider myself a power-user and am on my phone constantly – including watching the odd Netflix video – I have a difficult time consuming more than 1GB of data in a month.  Even tethering my laptop and iPad barely makes a dent.  A quick glance of Rogers’ web site reveals that their highest-volume offering is currently 1GB for $30/mo.  Telus and Bell appear to have similar data offerings.  This isn’t as generous as my 6GB plan, but it’s well within the usage band of even a heavy user.  (If you’re spending your allocation downloading BitTorrent files, etc., you’re just plain weird and you aren’t one of the normal ones.)

International roaming is where things get ugly, however.  All carriers deal with data roaming differently.  Rogers and Fido offer blocks of data (10MB, 25MB and 75MB)  you can purchase at a discount, in advance, before you leave the country.  The prepaid rate is between $3 and $5/MB, depending upon the amount of data you pre-purchase.  The trouble with the pre-paid International blocks of data is that they are only valid for 30 days, and you don’t get credit or roll-over for any unused data.

I currently pay Fido an add-on fee of $10 each month for the privilege of paying only $1/MB when roaming in the US.  For a short time last year Rogers offered a $5/mo additional fee that would extend your Canadian data pool to the US, but they abruptly cancelled that.  While my $1/MB is a significant discount over the a-la-carte $3/MB US roaming rate, it’s still excessive given that I pay $30 for 6GB of data in my home country, and that same amount of data usage would cost $6,000 at a “discounted” roaming rate in the US and $18,000 at “regular” rates.  (Where things really get out of control is a comparison with the a-la-carte International roaming rate, where that 6GB of data would be billed out at $180,000)  Logic dictates that the wholesale price our carriers pay to foreign carriers must be dramatically lower than what they charge us.

I travel regularly, primarily to the US but occasionally to Europe or Mexico.  I have always been paranoid about my data usage and have always been very careful about it.  With my $1/MB US roaming rate through Fido, my US data roaming charges were typically in the $60/mo range, which was a lot more than I was paying for my Canadian plan, but still within an affordable sphere.  I often contemplated getting an AT&T domestic plan, but was burdened by the fact that they typically required you to sign a contract, which required you were a US resident with a US address, US bank account, US credit card, etc.  This fact exists in many countries, and is the reason your domestic carrier has you by the proverbial short-and-curlies when you travel.

My day of reckoning finally arrived on a recent trip to Mexico.  I had been in Mexico a couple months earlier and had pre-purchased an International data block that I had barely used.  My hotel had WiFi, and I was typically paranoid about my 3G usage, so I ended up using only a fraction of what I had pre-purchased.  Based on that experience, I decided that upon my return to Mexico a couple months later, I wouldn’t bother with a pre-purchased block.

Failing to purchase a block of data in advance ended up being a huge mistake.  Part of my problem was my own mistake of miscalculating the data rate at $3/MB instead of the actual $30/MB  (3¢ per kilobyte).  Being paranoid, I did limit myself to primarily text-based data transmissions – email with no viewing of attachments, FaceBook status updates, FourSquare check-ins.  I also relied on the Fido iPhone app to keep track of my data usage.  The app stated right on it that data usage counters were typically behind by 4 hours, so when I got up each day I checked the counter to see how much I had consumed the prior day, and used that as the basis for what I could consume subsequent days.  That also proved to be a big mistake, as the counter ended up lagging by a couple days.

Using a miserly 30MB of data ended up costing me about $900.  Upon departure from Mexico, my Fido app counter had logged just shy of 20MB of data, but a couple days after returning from my trip, that had increased to over 30MB.  This just added insult to injury.  Using Fido’s own data to moderate my usage proved faulty.

A day or two after returning from Mexico and well before receiving my bill, I phoned Fido to see if they would allow me to retroactively buy a block of data.  I thought that my history of buying International data blocks in advance combined with 12+ years of loyalty as a customer in an industry constantly battling customer churn would mean something.  I also figured that they might give up some of the ten-fold premium I paid over the prepaid rate, since this was a clear cash grab on their part.  Why else would you discount something by 90% than if it was grossly overpriced in the first place?

I ended up speaking to a CSR who just read me boilerplate.  I was nice, I explained to her that I screwed up but that I was a loyal customer and asked whether I could retroactively purchase an International block of data as I had done in the past prior to leaving the country.  Her cue card told her to regurgitate some gibberish about “how they understand that when you’re excited to go on vacation, you often forget to take care of important things like preparing for foreign data usage…blah blah blah.”  I told her I was aware of all of that, but I was looking for some sympathy given my long tenure as a client.   She refused to transfer me to a supervisor and the best she could come up with after 5 minutes of hold was a $100 loyalty credit.  I could tell that she hears this sob story every day, and they’re clearly in the mode of retaining as much profit as they can, rather than acknowledging the scam and giving some of it up when clients call their bluff.

I admit that everything was within my control and that I could have simply chosen not to use my phone in a region that I knew could cost me a lot, but that didn’t make it any easier to swallow.  After so many years as a wildly loyal Fido customer (I even own a company that is a dealer for a competing mobile phone carrier) I then embarked upon a vendetta to limit the amount of revenue I contributed to them, and I will share my research with everyone else upon my next post…