Letter to CBC - The Real Problem with Cellphone Contracts

SIR - You ran a fascinating article on the Competition Bureau's comments on the Canadian wireless code of conduct.

The Bureau states the Canadian Wireless conduct code would benefit from a maximum 2-year wireless contract (standard in the US) - "Discouraging the creation of switching costs that tend to reduced customer mobility" ("Cellphone contract crackdown", February 7th).  Curious is the omission of "increased" customer mobility statistics in the US measured by 'churn' the percentage customer base that takes their business to another provider.

Recent statistics from leading wireless providers in both countries imply shorter contracts do not correlate to increased customer mobility:

• AT&T Wireless Churn [US - 2 Year Contract] - 1.19%
• Verizon Wireless Churn [US - 2 Year Contract] - 0.95%
• Bell Wireless Churn [Canada - 3 Year Contract] - 1.7%
• Rogers Postpaid Wireless Churn [Canada - 3 Year Contract] - 1.34%
• TELUS Wireless Churn [Canada - 3 Year Contract] - 1.44%

Long wireless contracts frustrate Canadians because the length of most contracts extend past the useful life of their cellphones.  Carriers are equally flustered because contract subsidies devalue technological innovations and distort the cost of phones - a major reason many Canadians don't realize the actual cost of the phones they buy.

T-Mobile's CMO Cole Brodman against phone subsidies that accompany long contracts

Wireless contracts are a pain point but do not let the Competition Bureau's comments mislead readers - Canadians are less trapped, due to lack of industry competition, than the Bureau would suggest.

Matthew Tham
Toronto, Ontario