Telus’ new plans to prepare ‘incredibly competitive’ industry for 5G, says senior exec

Telus' president of mobility says he doesn't think "anything less than 10GB makes sense anymore"

The initial pricing clashes have worn off since the few weeks that Rogers launched its Infinite unlimited data plans.  Bell and Telus initially fired back with promotional offers, including their own limited time unlimited plans.

But now, Telus massively overhauled its suite of plans, bringing it down from 200 plans to just six new options. It also changed how it handles device financing and family discounts.

In short, customers can now pick from six new plans that Telus is offering. They include three no overage plans and three sharing plans. Regardless of which plan you pick, you can choose between $75 10GB, $95 20GB and $125 50GB plans. The only significant difference is the new share plans let you pool all the data together, but charge overages, while the no overage plans keep data buckets separate and throttle users’ speeds down to 512Kbps when they surpass the cap.

MobileSyrup spoke with Telus’ president of mobility, Jim Senko, on why the company drastically changed its rate plans. Senko also talked up Telus’ push towards 5G and working to ensure customers have a great experience and value options to pick from when it comes to plans. The executive also detailed the importance of transparency in pricing and plans.

Below are some of the biggest questions we had, and Senko’s answers. You can also read up on the new plans here.

Why 512Kbps throttling instead of 256Kbps?

When asked why Telus decided to throttle speeds to 512Kbps, when both Rogers’ Infinite plans and Bell’s promotional Unlimited Data plans throttle down to 256Kbps, Senko said that the company throttles to ensure the network quality is maintained as it is a ‘shared resource.’

As such, Telus wanted to find a speed where it could restrict high bandwidth activities, such as streaming video, while still letting subscribers use typical functions on their phones, like instant messaging, checking email, loading websites and streaming music.

“We found that 256Kbps is too slow,” Senko said. “512Kbps strikes a great balance because at 512 customers can have a good experience opening a web page or [using] social media. They can even use Spotify. So most of the core functions work really good at 512, where they don’t at 256.”

Why are these massive changes coming now?

As for why Telus decided to launch these plans now, Senko said these new plans have been several months in the making.

Further, he indicated that setting up the new device financing options required “quite a bit of systems work” because it’s “a completely different way for us to price and bill our customers.”

Senko also said that Telus believes in sticking to a date when it picks so they can ensure employees are appropriately trained when new plans launch and can offer an excellent customer experience.

Regarding whether the Canadian Radio-television and Telecommunications Commission (CRTC) review had anything to do with the changes, Senko said no.

“We currently work under the wireless code,” said Senko. “When the wireless code was formed, we were really active participants in shaping it. And in fact, many of the items in the wireless code were innovations that Telus had lead in the first place and that’s just our orientation, that we put our customers first.”

He also noted that Telus believes customers will reward that mentality with their loyalty and lower churn rates.

That said, these plans come a few months after the CRTC launched a review on “the state” of the mobile wireless market and “whether further action is required to improve choice and affordability for Canadians.”

Plans launching in preparation for 5G

Instead, Senko said Telus is launching these plans in preparation for 5G and improving the customer experience.

“5G is coming next year, so customers that are starting to activate and upgrade now will kind of migrate into a 5G world over time and we wanted to get the market ready,” Senko said.

That’s also why Telus decided to start at the $75 for 10GB mark. Senko says that, in terms of 5G, he doesn’t think “anything less than 10GB makes sense anymore.”

Senko added that customers who want to go with a lower cost plan have options with other carriers like Koodo.

“The reality with 5G is that data usage will be much higher, data speeds will be much higher, and we just fundamentally need to rethink our rate plans, and that’s what this is.”

As for customer experience, Senko says that the more straightforward, more transparent plans will mean fewer calls to Telus call centres and fewer frustrated customers.

Senko acknowledges that, over time, Telus will have customers who pay less because it doesn’t have data overages. However, he also says there will be customers who will be willing to pay more for the certainty of no overage plans.

“We firmly believe in the way we did the analysis, that that will kind of be a wash. It’s adding incredible value to a large swath of our customers, and I think it’s going to make a lot of sense to them and it will help with loyalty,” Senko said.

What this means for competition in Canada

When asked about competition in Canada, Senko said the wireless market is “incredibly competitive,” especially when compared to the U.S.

“I think that’s really funny, right? And of course, I would because I’m with Telus,” Senko said. “But, hey look, if you look at our Peace of Mind plans and compare it to the U.S., our entry-level no overage plan is $75. If you look at U.S. carriers’ unlimited entry-level plans in Canadian dollars, Verizon is at $106.”

For the record, Verizon’s base unlimited plan for one person, ‘GoUnlimited,’ is $75 USD. According to a Telus spokesperson, Senko quoted the numbers at a 1.3 percent exchange rate to Canadian dollars. Our calculation puts the Canadian price of that plan closer to $98, but the point remains: our plans are a bit cheaper.

To add to the value, Senko also pointed out that Canada has the third-fastest networks in the world according to the SpeedTest Global Index, and he said that Telus is “the largest and fastest” network in the group.

However, the comparison to the U.S. is something Telus has made before, recently in its release about the 600MHz spectrum auction and, unfortunately, it’s comparing apples to oranges.

Canada’s wireless market is different than the U.S. — for one, the Canadian population is quite spread out, which increases the cost of infrastructure to ensure Canadians have high-quality networks everywhere. Further, the U.S. has a larger population, so the price per user can be lower.

The other issue is that U.S. cellular services largely aren’t available to Canadians, so it’s hard to argue that Canadian mobile services are competitive with the U.S.

Despite this, these new unlimited data plans from Telus, as well as the offerings from Rogers and Bell, are making wireless services significantly more straightforward, understandable and transparent. It’s an important step forward for Canadians and could lead to much better pricing in the future.