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Cellular Phone Forum / Providers / Fido / February 2005The euthanizing of Fido. Poor doggy. by Tyler Hamilton Toronto star
snip Well, Rogers is slowly inserting the lethal injection into the dog. I refer to the Rogers announcement this morning that it has "redesigned" the CityFido phone service -- a safe way of saying they're screwing the pooch. It wasn't unexpected. Everybody assumed that Rogers, following its acquisition last fall of Fido master Microcell Telecommunications, would give itself a couple of months before destroying the spirit of a flat-rate wireless service it has long considered "ridiculous." The original CityFido offered the following: Unlimited local calling, number portability and included the service access charge (normally an additional cost of $6.95) for a grand, tidy total of $45. The new CityFido still includes the service access fee and LNP, but here's what has changed: A $45 plan with only 750 minutes or a $65 plan with 1,500 minutes. No more unlimited local calling. Also, it has made the local calling area smaller to make it "more urban-focused." Gee, thanks. Calls made outside the zone will cost 50 cents a minute -- Yikes! Calls made after plan minutes are used up cost 30 cents a minute. Yikes again! You'd get a better deal signing up for a U.S. wireless plan. 50 cents a call? Are we operating in 1988 or something? Customers on the older plan will only be grandfathered for a year. Existing CityFido customers should be pissed, and the Competition Bureau should be ashamed for permitting Rogers acquisition of Fido without imposing some conditions. The analysts I'm talking to say this "redesign" is the last step before completely killing Fido, likely sometime next year. by Tyler Hamilton Toronto star > You'd get a better deal signing up for a U.S. wireless plan. 50 cents > a call? Are we operating in 1988 or something? Customers on the older > plan will only be grandfathered for a year. No, customers will be grandfathered for as long as they renew their fido agreement. > Existing CityFido customers should be pissed, Why, FIDO is taking care of them, but removing the plan from the market as it was, given a new reality. > and the Competition Bureau should be ashamed for permitting Rogers acquisition of Fido > without imposing some conditions. The analysts I'm talking to say this > "redesign" is the last step before completely killing Fido, likely > sometime next year. and if FIDO wouldn't have negotiated a purchase by Rogers it would have been bought by Telus (remember it was Telus' offer that started this whole thing rolling), when bought by Telus it would have been killed then and there.. > No, customers will be grandfathered for as long as they renew their fido > agreement. Does anyone really believe this ? I expect one cycle of renewal but not more. > and if FIDO wouldn't have negotiated a purchase by Rogers it would have been > bought by Telus (remember it was Telus' offer that started this whole thing > rolling), when bought by Telus it would have been killed then and there.. Nop. Microcell was essentially owned by banks. The owners of Microcell did not have to accept ANY offer. Fido had been restructured, essentially debt free and had become profitable, thus giving the owners good chance of making money on their investment over long term. Banks prefered short term cash and sold Fido in exchange for cash received by Rogers, and Rogers in turn went to the bansk to borrow the money to buy Microcell. Win win situation for the banks. The owners of Microcell could have petitioned SERIIOUSLY the government to have foreign ownership caps lifted for them (being a small player) allowing an outfit such as Virgin to invest in Microcell. But had a foreign player come in, the banks may have gotten their cash back from their investkment in Microcell, but they woudln't have lent tyhat money to the buyer, hence the poor banks would have been deprived of the revenus from interest they charge on Rogers' debts. I thought Virgin buying Fido would have made the most sense (or DT/TMobile/Voicestream). Increased competition, better value for consumers... you knew the government wouldn't let that happen. Think Air Canada / Canadian and how wonderfully that turned out. I can vouch personally for how lousy the TD Canada Trust deal was for customers (I think I actually mentioned this in another post). Anyhow, what's done is done. Just keep your eyes pealed for a good pager deal and let me know what you find. >>No, customers will be grandfathered for as long as they renew their fido >>agreement. [quoted text clipped - 20 lines] > to the buyer, hence the poor banks would have been deprived of the > revenus from interest they charge on Rogers' debts. > I thought Virgin buying Fido would have made the most sense (or > DT/TMobile/Voicestream). Increased competition, better value for > consumers... you knew the government wouldn't let that happen. Think > Air Canada / Canadian and how wonderfully that turned out. I can vouch > personally for how lousy the TD Canada Trust deal was for customers (I > think I actually mentioned this in another post). Virgin is an MVNO. > > and if FIDO wouldn't have negotiated a purchase by Rogers it would have been > > bought by Telus (remember it was Telus' offer that started this whole thing [quoted text clipped - 15 lines] > to the buyer, hence the poor banks would have been deprived of the > revenus from interest they charge on Rogers' debts. This news group is pretty much dead (and that's not because RW purchased Microcell), but I will say one last thing.. You are an idiot who accepts no version of reality except that which your own perception colours. The Microcell CEO (now EVP @ Rogers Wireless) has communicated to analysts, partners, and employees that there was no choice in getting a deal done once the company was put into play by the Telus offering. Fact is, the Telus offer was a 50% increase over the stock price when it was tendered and EVENTUALLY the stock would have settled to that amount and the shareholders (banks afterall) would have been STUPID not to accept this premium vs the prefer Telus offer price (it was $19). Anyone looking at the situation rationally would see that this was the only road to travel, given all the options. To say that IC or the CB would have made it better had they not allowed this to occur is irrational. Microcell was being marginalized in the wireless market, did not have the capital to expand its network or implement the next generation of technologies. It sucks plain and simple, that the dream of being the ultimate consumer advocate, driving the most value to the consumer and ultimately all winning in the end didn't work. Only goes to show that consumers will demand everything, but provide marginal rewards to the company that does. People like you killed that effort because everything wasn't enough, only realizing once it was all said and done how good it had been. So what you have left is a customer focused corporation that will drive profitability back to the organization while doing the best it can. > You are an idiot who accepts no version of reality except that which your > own perception colours. And you're the one who called me an idiot for stating that Rogers would not keep Fido packages for more than a few months. I don't know your real identity, but your nick is very NEW to this newsgroup. > The Microcell CEO (now EVP @ Rogers Wireless) has communicated to analysts, > partners, and employees that there was no choice in getting a deal done once Hint: The Microcell CEO was working for hsi shareholders: the banks. The Banks had stated categorically that they were not interested in holding Microcell any longer than necessary. The government could have stopped this and told the banks to be patient and seek someone who would keep the microcell network separate. Sirois and company could have petitioned the government to allow foreign investors, stating that more than 70% of the candian mobile industry had to remain canadian owned or something like this. (instead of forcing all companies to be canadian owned). Precedent was set in the USA already. The banks didn't want this. They saw Rogers as the likely suitor and knew that rogers would end up borrowing more money from them in order to buy microcell from them (converting equity in microcell into loans to Rogers yielding known interest rates/revenus). Where there is a will, there is a way. There was no will to maintain Microcell. And if you think the Telus offer was serious, you need to become much less gullible. (this is the same as the Onex offer to buy Air Canada during the AC/CP debacle, the offer was designed to fail in court). Both were designed simply to raise the stakes fot the second bidder and in the case of Onex, a way to give unins lots of leverage to force AC to make all sorts of promises to maintain jobs (which AC did until 9-11). > the company was put into play by the Telus offering. No, it was put into play because the banks put a big "for sale" sign over the Microcell property. > made it better had they not allowed this to occur is irrational. Microcell > was being marginalized in the wireless market, did not have the capital to > expand its network or implement the next generation of technologies. Microcell was an important asset to canadian telecom and forced the legacy carriers to stay honest. And it was not so marginalised. CityFido was a pretty big move. Fido had a large presence in the canaian market due to good markleting. And in terms of 3g, Rogers is today less able to invest into 3G since it is in much higher debt level than befoer the purchase of microcell. And you don't hear about Rogers spending megamoney for 3G, nor do you head about Bell or Telus going for 3G. In fact, 3G would have had greater chance if Virgin had invested in Microcell. It would have broiught new capital to the canadian mobile business. The microcell transaction just shiften equitiy into loans and obliterated Microcell. No new capital. > And in terms of 3g, Rogers is today less able to invest into 3G since it > is in much higher debt level than befoer the purchase of microcell. And > you don't hear about Rogers spending megamoney for 3G, nor do you head > about Bell or Telus going for 3G. Bell has already announced the roll out of EV-DO by the end of the year in major centres and the rest of it's network by Q4 2006 > People like you killed that effort because everything wasn't enough, only > realizing once it was all said and done how good it had been. Yeah, blame everything on me. Fact is that prior to Fido messing with SMS a few years ago, I was a staunch supporter of Fido (except for their outright lies about there not being any DATA service). But since then, they've been going donwhill. Note: we are not here to serve Fido, Microcell, Sirois or Tremblay. They are here to serve us. And when they don't serve us that well, we have every right to complain. And we are certaintly not here to serve Rogers. Any corporation taking over another cannot take customers for granted. They must earn the trust of those customers, they must earn the loyalty of those cutsomers. I have 0 loyalty, and probably negative loyalty towards Rogers, especially now that they have begun to mess with Fido. Anbd I now have 0 loyalty to Fido. The minute they remove my package, I go look elswhere. If you are bitter because you see the end of your job, don't take it out on customers. > If you are bitter because you see the end of your job, don't take it out > on customers. An end to my job, doing what? Please tell? All I see is a company that tried to do everything for the customer and ended up getting screwed by those same people. Because those people can be led by the noses (see below for handset scenario), even if the overall value scenario DOES NOT become a win for them. Everyone needs to benefit in the entire equation, not just the end user. If a company cannot become profitable it must adjust or the result becomes what Microcell became (fido solutions, as subsidiary of Rogers Wireless). Customers like nice new silver flip phones with colour screens and cameras built in.. plus they want them for free or close to it. With that comes an obligation. Something has to give, the pot of money doesn't always flow on way.. That low barrier of entry comes with a big price at the end of the day. If you think Branson will fight the consumer's battle you need to think again. Bell is a joint owner in that company and Bell wont do anything that will interrupt its revenue streams. Oh and one more thing. Your new employer would have factored in a certain percentage of digruntled customers and feel that this is quite tolerable. They have predictions on certain loss of Fido customers, especially as they new raise the rates in the face of *apparantly* very appealing offers from Bell and Telus (one year free etc). So your employer has to be perfectly OK with Fido customers not being happy with what is happening. If it had underestimated this level of dissatisfaction and anger, tough luck. Rogers is suqandering a great company and a great product. Within 2 years when all contracts lapse, Rogers may find itself with a very large churn. But they shoudl be perfectly aware with it, and thus you must asssume that your employer is OK with it and that it is within its financial predictions. > Your new employer would have factored in a certain percentage of > digruntled customers and feel that this is quite tolerable. Why do you keep harping on this new employer bullshit? > So your employer has to be perfectly OK with Fido customers not being > happy with what is happening. See above.. I see no disservice being provided to FIDO's current sub base, only keeping with what they have done to date (grandfathering those subscribers). Where are they screwing the current customers on City or any other plan? Removing a product from being marketed to new customers is not the same thing as taking something away from current customers. Finally, this is a cell phone company, it is not a church nor a religion. We operate in a capitalistic society where the strong prevail and the weaker become marginalized. It's not pretty sometimes, but it is what it is.. We have benefited from the Clearnet and Fido's participation in the wireless sector, but it's time to grow up and realize that somewhere down the road money had to be made and amalgamation had to occur. I for one am glad that I have one account on City Fido (wife's/home phone) which I will continue to renew for as long as I need it and another account for work, which now gives me GSM coverage in places I didn't have it before. I get the best of both worlds :) You're as good an argument for communism as they come. > We > operate in a capitalistic society where the strong prevail and the weaker > become marginalized. It's not pretty sometimes, but it is what it is.. We > have benefited from the Clearnet and Fido's participation in the wireless > sector, but it's time to grow up and realize that somewhere down the road > money had to be made and amalgamation had to occur. > > We > > operate in a capitalistic society where the strong prevail and the weaker [quoted text clipped - 4 lines] > > You're as good an argument for communism as they come. Don't you like your fast cars, high definition tv's, or cool new laptops? That comes at a cost. There are winners and losers everyday. True communism is utopia which cannot occur. What has been called communism this last century is purely a socialist dictatorship setup. Which one are you referring to? True communism depends on human nature being basically altruistic. For communism to work, the members of the society either need to be altruistic enough to want to work for the benefit of their neighbors, or they need to be forward thinking enough to see that what benefits the whole benefits themselves. They must be very far-sighted indeed, because large-scale social benefits tend to be more abstract in nature, and more difficult to recognise. > Anyone looking at the situation rationally would see that this was the > only > road to travel, given all the options. To say that IC or the CB would have The only course of action? What about waiting a few years, to see how much money Fido was bring in as a result of having paid off their debts and actually making a profit? Long term thinking escapes most business types, yet good long-term planning could have provided more money over time than a quick, immediate sale. Selling to Rogers was not the only option. They could have said "screw off" to both Rogers and Telus and gone on their own quite happily. Instead, they chose to screw their customers. I hate to burst your bubble, but the primary concern for any customer service oriented company is the customers. Selling out to the competition is generally not in the customers' best interests. Keeping the customers happy is, even it it means telling the shareholders to suck eggs. They'll eventually recover and see the light. The customers will have to deal with the fallout of your poor decision for a much longer period of time, or go through the hassle of switching companies. And to be perfeclty honest, there really isn't much choice, and those numbers have been made smaller as a result of the boneheads who had been in charge of Microcell. So please don't sit there telling people that it was the only decision. It was based on bone-headed greed, pure and simple. And it resulted in short-changing a lot of people. > and if FIDO wouldn't have negotiated a purchase by Rogers it would have > been > bought by Telus (remember it was Telus' offer that started this whole > thing > rolling), when bought by Telus it would have been killed then and there.. Fido was owned by the banks. It had recently paid off it's debts and was becoming profitable. If the banks had waited 2 or 3 years, they could have had a nice steady source of income on their hands. Unfortunately, people tend to not think long-term. It's all short-term, show me the money now. Fido did *not* have to be sold. It would have been better for everyone concerned if they'd left well enough alone. Including the customers of other providers, since Fido was a balancing influence on price points. Losers. The lot of them. Now we have to deal with Rogers bullshit. > without imposing some conditions. The analysts I'm talking to say this > "redesign" is the last step before completely killing Fido, likely > sometime next year. Not the last step. I expect to see Fido plans greatly simplified (removing lots of choice in plans). What will survive is the Fidomatic (prepaid). They'll grandfather existing Fido customers, but the "simplified" plans just won't attract that many new cutsomers who will instead be steered towards Rogers. The next big step is when any new handset sold by Fido (or renewed for existing customer) will come with a SIM card that is already identified as a Rogers SIM inside, even if it says "Fido" on the outside. This way, they can gradually transfer customers over to the Rogers network without having to unlock phones etc. Within 2 years, they will have gotten around to transfering most customers.Consider that Fido started with contracts last year and final contracts signed this year at Fido rates. So next year, you'll start having a bunch of Fido customers whose contract expires at which point, they'll be turned over to Rogers. The big unknown pertains to actual network and spectrum. How quickly will they start to use Fido channels/spectrum on Roger's network ? How quickly will they start dismantling Fido towers where there is Rogers tower nearby ? |
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