Telus Corp. has announced that it will be ditching its activation fee and its equipment exchange fee. The activation fee runs about $35, while the equipment exchange fee totals $25 when customers buy a new device.
Before one gets too optimistic, it should be noted that Telus will be charging $10 for SIM cards. This will cover costs that were previously part of the now-nixed activation and equipment exchange fees.
Telus has been working hard to separate itself from its incumbent rivals, swinging into play a plan that has thus far included the recent slashing of roaming fees and its renewed focus on “clear and simple” pricing.
Without any content assets to speak of, Telus has been matchlessly able to keep its focus on the customer front.
“The wireless industry and competitive landscape have changed over the years and with that our customers’ needs have evolved,” said Brent Johnston, vice president of marketing. “Our customers have told us they feel activation and renewal fees are unfair. We have been listening and that’s why we’re giving them exactly what they’ve asked for.”
To have Iain Grant of the consultant SeaBoard Group tell it, Telus is simply playing catch-up. “The way to this has already been paved by the new entrants,” he said.
Telus does claim to be one of the first “established brands” to cut the fees, however, and that may bank it some currency in the short-term. It is expected that the others will follow suit – and in relatively short order.
“The others will match – they’ll have to,” Canaccord Genuity analyst Dvai Ghose said.
Telus will put the new pricing into place on November 1.
The incumbents have done away with activation fees and renewal fees (for the most part) affecting their so-called flanker brands: Fido, Chatr, Virgin Mobile Canada, Solo Mobile, and Koodo. But cutting the fees on the flagship brand has been out of the question, at least until now.
Expectations are that the financial hit will be worth the lasting favour Telus will earn from customers – at least until the other companies make the move and it becomes industry standard. Canaccord Genuity predicts that Telus will sacrifice about $30 million as a result of the move, but things will balance out sooner or later.