Rogers offers cheaper iPhone plan after outcry

TORONTO Wed Jul 9, 2008 12:39pm EDT

In this file photo Apple Corporation CEO Steve Jobs speaks about the new iPhone 3G during his keynote speech at the Apple Worldwide Developers Conference in San Francisco, California June 9, 2008. Following criticism that its prices were too high for service plans for the eagerly anticipated Apple iPhone 3G, Canada's Rogers Communications Inc has rolled out a promotional six-gigabyte data plan for C$30. REUTERS/Kimberly White

In this file photo Apple Corporation CEO Steve Jobs speaks about the new iPhone 3G during his keynote speech at the Apple Worldwide Developers Conference in San Francisco, California June 9, 2008. Following criticism that its prices were too high for service plans for the eagerly anticipated Apple iPhone 3G, Canada's Rogers Communications Inc has rolled out a promotional six-gigabyte data plan for C$30.

Credit: Reuters/Kimberly White

TORONTO (Reuters) - Rogers Communications Inc (RCIb.TO), the exclusive service provider for the Apple iPhone 3G in Canada, has added a lower-priced plan for sending and receiving data over the handset after a wave of criticism over its original pricing options.

Rogers said on Wednesday it would offer a promotional, 6-gigabyte plan for C$30 a month. It will be available to those who activate by August 31 on a three-year contract and can be added to any voice plans currently available.

Rogers also said it will limit purchases of Apple Inc's (AAPL.O) iPhone 3G, available in Canada on Friday, to two per customer due to "anticipated high demand."

The Toronto-based company said 6 GB of data capacity will enable a customer to visit 35,952 web pages or send and receive 157,286 e-mails or watch 6,292 minutes of YouTube videos every month.

Rogers first announced voice and data plans for the iPhone 3G on June 27, ranging in price from C$60 ($59) to C$115 ($114) a month. Those prices include unlimited Wi-Fi access at Rogers hotspots and those of its Fido subsidiary.

The plans prompted an immediate outcry from consumers. A protest website at www.ruinediphone.com claims it had gathered more than 56,000 electronic signatures and letters of complaint.

The website is also encouraging consumers to cancel their Rogers accounts.

Carmi Levy, an industry analyst at AR Communications, said the bad press Rogers received as a result of its iPhone plans may serve as a lesson to others on pricing their products.

"It's completely out of line with what Americans are paying for similar service," Levy said. "The degree of difference was what was so galling to Canadians this time."

Canadians have long bemoaned high cost of wireless service compared with what U.S. consumers pay, and many blame lack of competition in a thinly populated country that stretches across six time zones.

Aside from Rogers, only Telus Corp (T.TO) and BCE Inc (BCE.TO) are national carriers, and Rogers is the only one of the three with the GSM wireless technology that the iPhone uses.

Rogers' top-end C$115 plan will buy 800 weekday minutes for voice calling and unlimited time at evenings and weekends.

It will allow users to send 300 text messages and have 2 gigabytes of data usage -- something that Rogers has said is enough for about 1 million text e-mails, or 16,000 Web pages, or 7,000 photo attachments.

By comparison, AT&T (T.N), the exclusive iPhone service provider in the United States, offers unlimited 3G iPhone data plans for $30 a month in addition to voice plans that start at $39.99 a month.

The iPhone combines Apple's ubiquitous iPod portable music player with a smartphone that can receive e-mails wirelessly and let users browse the Internet.

"This is probably the most important product launch in the history of Rogers," Levy said.

Having the iPhone in its stable is a big plus for Rogers ahead of the back-to-school season and the holidays -- two periods during which consumers snap up new handsets.

In the long term, it gives Rogers a leg up as the market moves away from older wireless technologies and toward third-generation, or 3G, products, he said.

It also helps it ready itself for stiffer competition following an auction of wireless spectrum that's currently under way and likely to yield new entrants.

"The landscape is about to change significantly for Rogers," Levy said. "They have to go into this period from a position of strength. The iPhone 3G is what's going to let them do it or accomplish it."

Prices for the phone itself are almost the same in Canada and the United States -- C$199 or $199 for the 8 GB version or C$299 or $299 for the 16 GB version.

But Rogers requires a three-year contract while AT&T asks for a two-year commitment.

On Wednesday, Rogers shares were up 46 Canadian cents to C$39.70 on the Toronto Stock Exchange.

($1=$1.01 Canadian)

(Reporting by Wojtek Dabrowski; Editing by Frank McGurty)

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