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Rogers has 'no commitment' to keeping low price for Fido wireless service: CEO
Posted on Canada.com
TORONTO (CP) -- Rogers Communications Inc. has "no commitment" to maintaining the low rates established by its newly acquired Fido wireless service, chief executive Ted Rogers said Thursday.
"We have no commitment to keeping the price levels the same as they were and we've already announced a significant increase in the price for City Fido for new customers coming in late December and early January," Rogers told an investor conference in New York.
"We're not known for having rock-bottom prices. With Rogers it's a premium brand, a premium service, a premium product."
Fido's previous owner, Microcell Telecommunications, had been more aggressive in its pricing strategies that Canada's other three cellphone companies, which have said publicly they didn't want to erode the economic viability of their businesses.
Rogers' subsidiary Rogers Wireless Inc. acquired Microcell for $1.4 billion. As a result, Rogers Wireless became Canada's largest cellphone operator, ahead of Bell Mobility and Telus Mobility.
Fido is best known among consumers and wireless providers alike for offering a $45 flat rate for unlimited calls within the Vancouver, Toronto and Montreal areas. In the past, Rogers and Telus had admitted concerns over the possibility of their wireless businesses feeling City Fido's bite.
Ted Rogers said Thursday his company will keep the Fido brand, but not necessarily the low price.
He also pointed out that despite the $45 flat monthly fee, average revenue per user of the City Fido service comes to over $62.
"That's above what the normal pricing ARPU is, so there must be something going on there," Rogers told analysts in a webcast question-and-answer period after his speech.
Rogers also warned that the future of the mobile phone business is not in simply undercutting the competitors' prices but an "evolution" in which "the wireline phones at home being replaced by, in my opinion, a combination of a phone that will work in the house . . . and then over to the cellular switch," Rogers said.
He said wireless companies have to work on increasing their revenues, because so many customers are using their mobile phones on weekends and in the evenings, when service is free.
His company will aim to do that, he said, by developing a combination wireless-wireline phone, including video, that works through the Internet cable network, which is owned by another Rogers subsidiary, Rogers Cable, when the user is at home.
"There's an opportunity therefore not to just go in and slash prices all over the place but to give greater value by giving better services," Rogers said.
While the wireless-wireline video phone won't be a reality for some time, the company will begin testing its voice-over-Internet phone in April and has set a target date of July 1 for deployment.
Shaw Communications Inc. and Cogeco Cable, the main operating unit of Cogeco Inc., are also working on Internet telephony services.
Rogers owns about 27 per cent of Cogeco Cable's subordinate voting shares and about 21 per cent of all the outstanding shares of its parent, Cogeco Inc.
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