news Rogers Bans Some Existing Customers From Buying iPhones

As we’ve pointed out many times before, Rogers boasts an exceptional brand of contempt for its non-business wireless customers, but the launch of Apple’s desperately anticipated iPhone has exposed a whole set of new lows for the Toronto-based company. Due to a breathtakingly boneheaded policy put in place by the company’s National Planning Department, existing customers currently under a Rogers contract and who have upgraded their handset within the year are prohibited from purchasing an iPhone. At all.



Well, that’s only partly true. They can buy an iPhone if they cancel their current contract, pay the early cancellation penalty fee ($20 per month left on the contract to a maximum of $400), and then sign up to a new contract, which includes an additional $35 activation fee. Customers aren’t even allowed to keep their previous phone number, as number porting is only available when transferring carriers—so, to retain a number with an iPhone, a customer would have to sign up for a brand new account with Rogers subsidiary Fido.

Reportedly, Rogers sales reps have also been specifically instructed not to waive any fees whatsoever in relation to iPhone purchases.

Essentially, a customer under contract who replaced a stolen or broken handset less than a year ago is now locked out of switching to an iPhone until the current contract runs out. This is especially problematic now because the only semi-reasonable data package is an offer that expires at the end of August.

The limited-time offer was implemented in response to a massive level of criticism of Rogers’ exorbitant data rates. It was hoped that the Canadian debut of the device would force Rogers to offer rates and data packages more in-line with other countries, but when the plans were revealed in June, it was business as usual for the communications behemoth, which enjoys a GSM monopoly in Canada (the iPhone only works on GSM networks). On July 9, Rogers caved somewhat to the mountain of bad press and offered a $30 add-on for existing plans with a more generous monthly data cap of 6 GB. That offer expires August 31, and although Rogers spins it as a gift to “early adopters,” what that move did was get some better PR points for the company while drawing a whole bunch of fence-sitters into iPhone contracts who otherwise might not have purchased one.

As with anything Rogers, the policy to lock-out potential iPhone customers until they finish a current contract seems suspicious: those consumers are still likely to buy an iPhone later, which effectively extends the lock-in period and employs the higher, extremely lucrative rate plan. Rogers has also not stated if they will allow new iPhone customers to upgrade as new generations of the iPhone are released over the contract term, or what options will be available as iPhones are lost, broken, or stolen (they claim that they can replace it with a phone; just not another iPhone). The company has clearly indicated that they might start blocking any non-Rogers, unlocked, or modded iPhones on their network, however.

Wireless carriers have always subsidized handsets in order to appear cheaper for the customer; the longer the contract, the cheaper the phone. That still doesn’t explain why Rogers won’t allow handset upgraders to pay out the remaining contract period and/or handset subsidy in order to get an iPhone, especially since the purchase of an iPhone brings thousands of guaranteed dollars to the company over the 36-month lock-in.

In related news, Rogers’ wireless sales, which make up 54% of the company’s revenue, jumped 12% over the last quarter, netting $1.36 billion and 41,000 new subscribers.

Photo by Marc Lostracco.