For customers on 15Mbps plans or lower, monthly costs will go up by $5 CAD per month. Customers on higher plans will see a $10 increase. Further, TekSavvy told MobileSyrup that the new plan pricing went into effect for new customers as of August 16th, while existing customers will see the change come into effect on October 1st.
The Chatham, Ontario-based company sent out an email statement to customers explaining the cause behind the increase. According to TekSavvy, the federal government “effectively directed the CRTC to increase these wholesale rates.”
For context, about this time last year the Canadian Radio-television and Telecommunications Commission (CRTC) released a decision regarding wholesale internet rates. Companies like TekSavvy, Distributel and Start pay these rates to access high-speed networks from incumbents like Bell, Rogers and Telus. The CRTC determines how much incumbents can charge based on its reviews of the cost of operating networks.
The CRTC’s decision announced lower ‘final’ wholesale rates than the interim rates set in 2016. Further, the CRTC applied the rates retroactively, which meant incumbents would have to pay back the difference. TekSavvy responded to that decision by applying discounts to over 85 percent of its internet subscribers, passing the savings from the lowered rates on to customers. Additionally, TekSavvy changed several of its plans and upgraded several customers to unlimited internet. The company told MobileSyrup that this rate increase largely undoes those discounts, although its “hard to compare” since TekSavvy also changed several plans.
Following appeals filed by the larger carriers, the federal court suspended the CRTC’s wholesale rates decision in November 2019. Since then, TekSavvy has repeatedly appealed to Canadian consumers for support in the battle with independent internet service providers versus the bigger telecoms.
TekSavvy says the federal government effectively said retail prices should go up
Over the weekend, Innovation Minister Navdeep Bains released a statement about the lowered rates, noting that they don’t balance the policy objectives of the wholesale service framework and that the rates could undermine investment, particularly in rural and remote areas.
The statement comes after months of pressure from Canada’s big telecom companies, which attacked the CRTC decision legally. Further, TekSavvy accused big telecom companies of threatening to pull investments in rural internet projects over the lowered rates, saying the federal government “caved” to those demands.
“Having gone five years without cost certainty, paying inflated interim rates and facing brazen anticompetitive conduct in a climate of extreme regulatory uncertainty, TekSavvy is left with no choice but to interpret this announcement as an expectation from the government that retail prices should be raised,” the company said in a press release.
Although rate increases of any kind can be frustrating — especially now, given the ongoing pandemic, economic uncertainty and increased financial stress — TekSavvy may still come in cheaper than competitors. For me, at least, TekSavvy’s increased pricing remains less costly than similar internet packages from both Rogers and Bell in my area, although the amount I’m saving is less than before. Of course, your mileage may vary in this regard.
For those who may not be able to afford the increased cost, TekSavvy says customers can call in or visit the company’s ‘MySavvy’ portal to downgrade their plan to something more affordable at no extra cost.