Bus error: Jake Billo’s weblog

His Holiness Steve Jobs announced the iPhone 3G today, and it’s finally official: the sparkling device will be available for Canadians to purchase from Rogers or Fido on July 11th. In this post, I’ll prepare you for the possible scenarios when the Christ Phone becomes available to mere mortals - and then discuss their likeliness.

Note: These are my best guesses from the unofficial information online at HowardForums, the Apple press releases, and general observations about the wireless industry. These points are subject to change before release: if they do, I’ll update the post with details. When I say “Rogers” in this writeup, I mean both Fido and the parent company.

The iPhone 3G will cost $199 in the US, but be ludicrously overpriced in Canada.

A false assumption, but not entirely unreasonable considering how device pricing in Canada has typically worked. Apple has set prices globally for the 8GB model to be at most $199 - not with a minimum advertised price, but with carrier advertising and promotional agreements that have the same effect. Expect to pay $199 CDN for the 8GB model and $299 CDN for the 16GB, keeping in line with Apple’s announcement.

You’ll have to sign a new three year contract (or renew for three years) with Rogers or Fido to get an iPhone 3G.

Correct and accurate. The iPhone 3G will only be sold in Canada under a contract, at Rogers or Fido dealers and not at Apple stores. If you’re a new customer, it won’t be a two year commitment as AT&T demands in the United States or 18 months as per O2 in the UK. Rogers’ three year standard is the only way you’ll get the device - and expect that you’ll have to keep both your voice and data plan during this time.

Existing customers will likely have to pay a $35 (re)activation fee to switch to Steve’s pride and joy, but will end their current contract without an ECF penalty. In other words, if you’re a year and a half into your contract and decide to grab the iPhone, you won’t be stuck for four and a half years - just three. This is probably the only reasonably consumer-friendly element of the device launch. It comes with a benefit for the carrier, though.

After all, while Rogers may lose money initially on letting you out early from your existing subsidized phone - you know, the one that wasn’t brewed in Cupertino - they have two things going for them:

1. They don’t have to pay Apple for each subscriber anymore - like AT&T did for the first year of the device - so all the monthly fees are going directly to the carrier. Average revenue per user is now up by, say, $10 to $18 per month for anyone on an iPhone plan automatically.
2. Your bills are going to be higher, since you’ll need a fancy data and SMS package custom-tailored for the device. Don’t expect pricing to be anywhere near the stock Mega Time 25 plan. Average revenue per user on an iPhone voice and data package will have at least doubled, if not tripled or quadrupled from $25 plus System Access Fee. When this happens, it halves or thirds the time it takes for Rogers to recoup their losses on the previous handset.

   Average revenue per user for Canadian carriers in 2007 was $56 - but under 10% of that was on data services. iPhone users will be seen as “above average” (read: suckers and chumps) to both investors and executives; so ARPU will also follow this trend.

Also? It wouldn’t be too out of place to see an increased Early Cancellation Fee for people trying to escape their iPhone contracts. At minimum, expect $400 plus a $100 data ECF for a total of $500. The sky’s the limit for the maximum, but my best guess would be an increase of $200 (specialty product) for a total of $700.

I already have an iPhone and it won’t work on Rogers after July 11th.

Any existing iPhone you may have unlocked and working on Rogers already won’t cease to work, but there’s a high chance you won’t be able to take advantage of any new iPhone-specific data plans. Rogers has lately restricted data packages to specific phones - and not just models, but specific Rogers-branded and sold devices. They accomplish this by checking the IMEI number of the device, and falling back to $0.05/KB standard data rates if you don’t have a phone with an IMEI in a certain whitelist. Good luck getting on that!

(This has recently been a major problem with unlocked BlackBerry devices, and specific data packages. For example, trying to add the $15 “unlimited personal email” package or the $15 Smartphone Value Pack to an unlocked Curve 8320 is now a difficult task. Since the IMEI isn’t in Rogers’ database, the customer service representative doesn’t see what kind of device it is and can’t provision the correct plan. The correct response is to tell them to use the generic 111111111111119 IMEI and then the packages appear.)

If you manage to pick an iPhone 3G up on eBay or outside of the country, and it’s not branded to Rogers - I wish you well when activating, but you’ll run into the same “not our product; not our problem” attitude. You also won’t be able to sell the device to a foreign user easily: Rogers refuses to provide unlock codes to users, so the best solution might be a software exploit that Apple can revoke at any time.

The iPhone won’t be the beginning of truly unlimited data in Canada.

Definitely possible and should be expected. After all, in Irish markets, O2 Ireland caps data usage for the iPhone at 1GB per month. Australian customers get a slightly more lenient 3GB allowance.

In Canada, 1GB of data usage is readily available - for $100 per month on Rogers’ existing BlackBerry plans. With Sprint now capping their mobile broadband Internet at 5GB/month and still advertising it as unlimited, expect that a lot more data in quantity will become available - but not “all you can eat.”

Consider that Apple’s involvement after the phone sale is drastically less than with the first generation device, leaving the carriers significantly more room to do evil things to consumers.

I’ll have to pay a lot of money per month for the iPhone 3G, making the $199 pricetag pretty much a drop in the bucket.

No pricing details have been acknowledged or leaked yet, but we do have the comparisons available for the UK: for 30 pounds ($60.53 CDN as of posting time) per month, the 8GB iPhone will cost about the same as it will in Canada, with 75 minutes/125 text messages and “unlimited” data.

A more prudent analysis would involve O2 Ireland’s pricing schema for the existing device. The “paddy tax”-ing company charges about 35 pounds (~$71 CDN) for 175 minutes, 100 text messages and 1GB of data.

Best guess from my end of the court would be a combined voice and data $90+SAF plan with a 1GB cap.

What’s the bottom line?

Without Apple’s direct intervention, don’t expect too much of a change in Rogers’ status quo, and prepare to pull your pants down for three years if you absolutely must have the shiny trinket.

I’m still waiting to hear how the spectrum auction’s going.

From Boy Genius Report:

Deutsche Telekom has been pre-approved for a financing and protocol agreement which will allow them to introduce T-Mobile to the Canadian market (subject to restrictions in all provinces except Ontario during a 6, 12 and 18 month trial period that expires in 2010), and also pre-approves them for testing roaming, cell tower reception and international data agreements.

More details from the source, but the information seems credible - and after all, isn’t another wireless player in Canada what we’d like?

The most common complaint I hear about T-Mobile in the States is their lack of coverage compared to AT&T or Verizon, but realistically, another GSM carrier would really only give people options. The ability to roam on Rogers towers for brief periods of time - especially if government mandated cooperation occurred - could also improve the coverage situation drastically.

As a followup to my initial post on Canadian wireless technology, here’s some additional information on hot topics.

For those not in the know, consumer data rates in Canada absolutely suck. In the States, technically (if not truly) unlimited plans are available starting at $20 per month. The best comparable plan in Canada is Telus’ 1024MB for $100 option. Part of the reason for this situation is our (comparatively limited) selection of wireless providers and population concentration near the border.

What’s all this I hear about “unlocking” phones?
When you buy a phone directly from a GSM carrier like Rogers, it comes with a provider lock on it. This means that the only type of SIM cards that can be used are those provided by your original carrier - so if you buy a Rogers phone, you’ll need to use a Rogers SIM card with Rogers service. If you put a SIM from any other provider in the phone, the only number you’ll be able to dial is 911.

Since most cell phones are subsidized by the wireless provider and people like low initial prices for phones (for example, the phone you get for “free” for signing a contract costs something), the carrier will lock the phone to ensure that you stick with their service. The carrier also likes getting paid for extras such as long distance and out of area calling. Due to the global nature of GSM networks, the better solution for the consumer is to buy a prepaid SIM card when travelling. This way, you’re only paying 20 to 50 cents per minute rather than $1.95/minute. Locking prevents this from happening.

The solution is to unlock your phone, removing the restriction on the carrier. This process can be done for free with some models of phone (the original Razr, for example, can be unlocked fairly easily) and a few minutes of Internet research, or you can find an independent dealer that should perform the operation for a fee. A good place to look is Howard Forums, since Rogers will not give you the unlock code for your phone even if you’re out of contract. Unlocked phones carry a higher resale value on eBay, since any buyer can use their own GSM provider at will.

Public interest in unlocking phones has spiked since Apple’s release of the iPhone, which up until this point has always been shipped with a lock to AT&T in the United States. Since it’s not possible to get an AT&T phone plan from outside the US, and a prepaid card would have astronomical roaming fees for being on a different GSM network, users who want to play with shiny, lickable iFruit have been looking for an unlock solution.

This post comes at an interesting time, since tomorrow Apple is expected to release a European version of the iPhone on the O2 network. The latest news from Rogers about Apple’s device is that negotiations are still ongoing; don’t expect anything until 2008. In the meantime, you’ll not only have to unlock the iPhone to use it properly here, but you’ll need a data plan that will likely be more expensive than any cell bill you’ve ever received.

Of course, with the recent unlocking progress, it’s possible to disable cell data and simply use the phone for your calls, and WiFi for Internet browsing when you’re in a hotspot. Still, at that point, it’s the same price to buy a 16GB iPod touch, pair it with a cheap Nokia for $0 on contract, and call it a day.