Changes to cell phone contract lengths and overage fees are being celebrated by customers across Canada this week after the CRTC announced new rules for mobile providers. They’ve eliminated the penalty for opting out of three-year contracts early and capped overage fees for data use.
SaskTel, however, is warning those changes might not be so welcome when you go to buy your next phone.
“I think the CRTC decided that it was more important that people could switch carriers than getting them a phone for a better price… smart phones are like 600, 700 bucks so, if you’ve only got a two-year agreement, the lump sum you’re going to pay for that phone is going to be much more,” explains John Meldrum, SaskTel’s Vice President of Regulatory Affairs.
“That’s probably an unintended consequence of what the CRTC has done,” he says.
While the Canadian Radio-television and Telecommunications Commission hasn’t outright banned three-year contracts, customers will be able to cancel theirs after two years without any penalties.
Meldrum added that the decision to cap overage fees for data use – to avoid huge, surprise bills – is another major change that will require providers to adjust how they do business. For example, if someone goes over their data use, are they just cut off or do they get some kind of a warning?
“We’ll have to provide some sort of notice as to where to call if they want to continue to obtain data,” he says. “Implementing it and implementing it in a way that meets customers expectations is going to be challenging and expensive in terms of our billing systems and notification systems.”
The changes take effect December 2nd.