Rogers caves on iPhone pricing, sort of

Rogers Communications Inc. has bowed to public pressure and temporarily lowered the price of internet usage on Apple Inc.'s hotly awaited iPhone, which is being released in Canada on Friday.

The company will now offer a $30-a-month plan that allows customers to use six gigabytes of internet data on the iPhone, on top of voice plans that start at $20 plus a system access fee of $6.95 a month. The new plan will be offered until Aug. 31, after which the company will revert to its previous offerings.

Rogers' previous basic plan cost $66.95 and allowed only 400 megabytes of internet usage, the main reason behind many potential consumers' outrage. The new data rates will also apply to other smartphones that run on Rogers' third-generation cellphone network, including Nokia's N-series, the Blackberry Bold and the Samsung Jack.

Rogers announced its new rates on Wednesday but has not yet published them on its website.

That anger expressed itself in a number of anti-Rogers websites, including ruinediphone.com — which has seen more than 56,000 people petition against the company — and cancelrogers.com.

John Boynton, senior vice-president and chief marketing officer for Rogers, said the company changed its mind after seeing many well-reasoned arguments for why data pricing should be lower.

"It's not ranting and raving. People were very thoughtful," he said. "What they said is they want to use this device in ways that their previous usage would not be an indicator."

The 6GB plan is the largest Rogers offers and should be more than enough for what most people want to do with the iPhone, he said. Many websites now clock in around 1MB per page while a five-minute streaming video can use up to 80MB of data. The original plan would have burned through those limits quickly, a problem Rogers has moved to correct.

"We think we're being thoughtful and respectful and responsive," Boynton said. "We're going to err on the side of the biggest and watch and learn."

International comparisons not relevant: company

The company has also been criticized for the length of its required contract on the iPhone, which at three years is the longest in the world. Even under the new pricing, consumers will still be on the hook for a minimum of $2,360 after paying the phone's initial $199 cost and 36 months of service.

Boynton said the majority of smartphones in Canada are sold on three-year contracts, and the iPhone is the most expensive device the company has ever carried.

"It's not very helpful when you look around the world. What does a gallon of gasoline cost, what does a can of beans cost? It's not a relevant example," he said of the international comparisons.

Industry analysts said the move was a positive one but won't be enough to ameliorate criticisms, particularly because Rogers continues to demand such lengthy service contracts and it refuses to introduce the unlimited data plans that are common in the United States.

"It's a positive step for wireless data pricing but it's still a far cry away from the U.S. model of having one bucket of all-you-can-eat. There's still a huge reluctance to go down that path here," said Lawrence Surtees, vice-president of communications research at analysis firm IDC Canada. "As long as that's the case, it's going to be a lightning rod for criticism."

The temporary offer did little to placate petitioners on ruinediphone.com, which on Wednesday afternoon displayed the message: "Thank you Rogers for helping out. We still need more help. We need your offer to be: 1. Unlimited Data Plan, 2. Not a limited time offer, 3. Competitive rates on your voice plans."

"It would be nice if Rogers stopped treating us like idiots," wrote one petitioner. "Smart consumers know the difference between a fair deal and a bandage being used to cover-up some bad publicity. This is clearly the latter, and won't fool anyone."