I'm surprised nobody's posted this yet.

http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_T
ype1&c=Article&cid=1106779811499&call_pageid=970599119419

Jan. 27, 2005. 01:00 AM

Rogers Wireless curbs Fido unit
`Redesign' raises calling costs

Two new plans starting in March

TYLER HAMILTON
TECHNOLOGY REPORTER
Toronto Star

Rogers Wireless Inc. has put Fido on a shorter leash less than three months
after acquiring its master, Microcell Telecommunications Inc., by upping the
cost, capping the talk time and shrinking the coverage of its "unlimited"
CityFido plan.

Analysts said the changes, what Rogers is calling a "redesign," signal that
competition in Canada's wireless industry is beginning to cool off as the three
service providers left in the market put more emphasis on profits than
subscriber growth.

The situation stands in contrast with the U.S. market, where wireless plans
generally offer more value for less money.

"The bad thing about all of this is we're going to get back to where the
carriers are very conservative," said Mark Quigley, Canadian managing director
for the Yankee Group, a technology research firm.

"The Canadian carriers definitely have not been as aggressive on the price side
as they have been in the U.S. market. From a consumer's perspective it certainly
is a shot."

CityFido created a stir when it was first introduced because it offered
unlimited local calls for just $45, including the $6.95 monthly system access
fee its rivals routinely charge. Montreal-based Microcell promoted the
controversial plan as a replacement for traditional local-phone services
provided by Telus Corp. and Bell Canada.

When it was introduced in Vancouver in late 2003 and in Toronto last May, the
flat-rate plan sparked pricing battles in each market as Bell and Telus moved to
defend their respective turfs.

"What CityFido was trying to do was get rid of that local phone," said Brian
Sharwood, a telecom analyst with the Seaboard Group in Toronto. "It was saying
to people, `Why are you wasting that money on Bell?'"

After Rogers acquired Microcell last fall to become the country's largest
wireless provider, it surprised analysts by going ahead with the launch of
CityFido in Montreal. It did, however, slightly increase the monthly cost and
hinted that bigger changes were likely to come.

Beginning March 1, the redesigned CityFido will be sold as two plans, both
"smaller in size and more urban-focused," said Rogers.

The first offers 750 minutes for $45 a month; the second offers 1,500 minutes
for $65. Each plan's local coverage area has been greatly reduced, and calls
made outside the local zone will cost 50 cents a minute.

"It's pricey," said Sharwood, pointing out that the 50 cent a minute charge for
calls outside the local calling zone harkens back to cellular prices of the late
1980s and those large bricklike phones.

"And it's nice to know they understand urban lifestyle needs. Apparently those
needs were not met by an unlimited plan."

Rogers said the system access fee, local number portability, as well as call
waiting, call forwarding and conference call services will continue to be
included in both plans. Calls that exceed minute caps will cost an additional 30
cents a minute.

Existing CityFido customers will be protected from the changes for a year or
until the end of their service agreements, Rogers said.

Quigley said the decision, while it makes good business sense for Rogers and its
shareholders, is going to anger many CityFido subscribers who, after the effort
of liberating themselves from their local phone company, will face paying more
or going back to Bell.

Analysts also pointed out that the changes benefit Virgin Mobile Canada, which
is planning to launch mobile phone services any week now and is expected to
aggressively target disgruntled wireless users.

"This will fall into their hands," said Sharwood. "They'll be like, `You've been
lied to again, come to us.' "

- ---
Norman
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