Wireless 'black market' offers cheap plans outside Manitoba, Saskatchewan

Want a wireless plan with unlimited voice and text and 5GB data for under $50? You can move to Manitoba or Saskatchewan — or, if you live in the rest of Canada, you can try the wireless "black market."

Recent postings on Kijiji  offer the cheap prices to residents of other provinces — for a fee.

"Tony," whose ad is based in Toronto, offers to hook you up with a Koodo monthly plan with unlimited nationwide calling and 5GB of data for $48. That's the price you'd pay in Manitoba or Saskatchewan, but the same plan costs $90 in the rest of Canada (including Alberta). For his services, Tony charges $100, paid once the service is working, 

Meanwhile, someone named Kevin is offering a Fido plan for the same price and the same setup fee. "I can also get you a 416 number for extra $25," he claims, referring to a popular Toronto area code. Both ads were active on Monday morning, but had been removed by Tuesday morning.

You know wireless pricing in Canada is messed up when there's a black market emerging to provide people with better deals.- Peter Nowak, technology journalist

Tony says he uses "internal tools" like promo codes to help people in other provinces access cheaper cellphone plans advertised in Manitoba and Saskatchewan. 

The practice was first flagged by freelance technology journalist and blogger Peter Nowak, who received a tip about Tony.

"You know wireless pricing in Canada is messed up when there's a black market emerging to provide people with better deals," Nowak, a former CBC journalist, wrote on his blog Alphabeatic earlier in July.

Pricing 'out of whack'

In a phone interview, he said the purpose of the blog post was to "point out again that the pricing between the Prairies and the rest of Canada is just out of whack."

The huge difference in pricing between Manitoba and Saskatchewan has led to animated discussions on online forums such as Red Flag Deals and Reddit about workarounds to access Manitoba and Saskatchewan plans outside those provinces, which typically involve changing your address.

Tony says he doesn't change people's addresses because "that would be fraud" — although he acknowledged that his service has been called fraud anyway. He himself refers to it as a "grey area."

"But [cellphone companies] are screwing us over too," he told CBC News in a phone interview. "They're stealing money from us because it shouldn't be this expensive."

Canadians pay some of the highest prices in the industrialized world for cellular service, according to a report commissioned by Canada's telecom regulator.

Tony wouldn't say how many people he's hooked up, but insists "it's a lot," stretching from the East Coast to British Columbia. 

Nowak says the reason for the difference in pricing between Manitoba and Saskatchewan and the rest of Canada is the extra competition provided by local wireless carriers MTS and Sasktel.

"The big guys can afford to but they don't extend that," he said in a phone interview. "It just illustrates how much money they're making in the rest of Canada."

Telus 'looking into the practice'

Telus, which owns Koodo, has a different explanation for the regional pricing differences. Spokesman Shawn Hall said in an email that the different pricing in Manitoba "reflects that Koodo is a new entrant without the same market and network advantages the provincial incumbent enjoys."

He added that the company is "looking into the practice" advertised by people such as Tony.

And he warned that consumers should be wary of services that ask for customer account information "as that opens up the possibility of fraud."

Rogers spokesman Kevin Spafford offered a similar warning and a similar explanation for the company's different pricing in Manitoba and Saskatchewan.

"Our customers' plans are based on their home address," he said.

However, neither Rogers nor Telus indicated that they were taking any measures to target people like Tony or their customers.

Gerry Wall, president of Ottawa-based Wall Comunications, a company that studies cellphone plans for the CRTC, echoes that concern.

"You're giving up on one hand in terms of security. You're taking a chance," said Wall, who calls ads like Tony's a "grey market."

Still, he says it's no surprise people are looking for cheaper plans.

Wall says a small number of people using workarounds to access regional plans is unlikely to affect a market with 28 million wireless subscribers.

"If I'm Rogers or Bell, am I going to be worried about these types of resellers? Not now because I think it's a very, very limited take up."

He added that he doesn't think cellphone plan prices will ever drop in Canada. Instead, he says, Canadians are more likely to see new uses for their wireless networks in the next few years.

"I think those new uses are going to be so valuable we'll find ways to pay for them," said Wall. "And we won't like it."