The super-cheap Canadian cellphone deals only Americans can buy
Small Canadian companies say they can't persuade big providers to work with them
Timi Thornton loves her cellphone plan. She pays just $19 a month for a no-contract deal.
"I think it's super," declares the satisfied customer.
Thornton's provider is Waterloo, Ont., company TextNow.
Her deal is much cheaper than typical cellular plans because it includes only a small amount of data. To make up for that, Thornton's service also operates using Wi-Fi. When she has internet access, she can text, talk and surf all she wants.
Thornton lives on disability benefits. She believes it's important that low-income people like her have access to cheap plans.
"It really is a lifeline," she says.
Thornton also feels bad for Canadians because, even though TextNow is a Canadian company, her $19 deal is only available in the U.S. Thornton lives in Arkansas.
"Seems you-all ought to have the right to shop for and receive the [deal] that I have with TextNow," says Thornton.
Giving Americans our deals
Some upstart Canadian cellular providers claim it's next to impossible to offer their alternative cut-rate deals at home. Instead, at least a couple have turned to the U.S. market.
TextNow's CEO Derek Ting says he's tried hard with no success to make his company's phone service available to fellow Canadians.
"That is a very, very sore subject," he admits.
TextNow is a mobile virtual network operator. MVNOs are wireless providers that don't own their own cellphone network. So they lease access from the big telecoms at wholesale rates.
In the U.S., TextNow piggybacks on America's Sprint network. But in Canada, Ting says he can't persuade a big provider to work with him.
"They're basically making a point to keep us out of the market, and that's disappointing."
Earlier this year, the federal telecom regulator, the CRTC, rejected a plea by MVNOs to force the big telecoms to share their cellular networks.
Maybe someday, maybe
Ting says 17,000 Canadians have signed up for TextNow's mailing list to be notified if or when they can access the company's phone service.
"Hopefully one day it will make its way here," he says.
A 2015 CRTC report shows Canadians are still paying among the highest prices in the industrialized world for cellphone service. Average rates range from $37 to $107 a month, depending on the plan.
Critics charge prices won't come down until the Canadian market becomes more competitive. But smaller carriers here often struggle to survive and are sometimes gobbled up by bigger companies.
In the latest example, pending approval, Bell Canada is buying regional provider Manitoba Telecom Services for close to $4 billion.
Ting takes its business south, too
And TextNow isn't the only small Canadian provider that claims it has been shut out of its home market. Toronto company Ting — no relation to TextNow's Derek Ting — also offers a low-cost phone plan only in the U.S.
Ting cuts costs by charging customers only for the cellular service they actually use — not what consumers signed up for. The company says the average wireless plan costs users $23 a month.
Ting also buys access to Sprint's mobile network. But CEO Elliot Noss says he can't convince a Canadian telecom to grant him access in Canada.
Noss adds that he isn't holding out much hope because he believes the Liberal government isn't interested in helping MVNOs set up shop in Canada.
The Ministry of Innovation, Science and Economic Development told CBC News that the government is working to support competition and choice in the mobile market.
"[MVNOs] are not barred from offering services; in fact, there are some operating in Canada today," said ministry spokesperson Sabrina Foran in an email to CBC News.
Sugar Mobile on the rocks?
Many Canadian MVNOs, such as Fido, Koodo and Solo are owned by one of the big three telecoms. Some others only offer niche products like prepaid plans.
The Canadian Network Operators Consortium says the U.S. is home to dozens of MVNOs and that many of them are independent.
One of the few independents operating in Canada and offering monthly plans is upstart Sugar Mobile. But it could soon disappear due to a dispute with Rogers.
Similar to TextNow, Sugar Mobile offers Canadians mobile plans for $19 a month by using a combination of Wi-Fi and network access from the big providers.
Sugar Mobile gets that network access through its parent operation, Ice Wireless. That company provides cellular service in Canada's North. The big telecoms grant the company network access so its customers have roaming service when travelling.
But Rogers alleges Sugar Mobile's using its network for the upstart's new $19 venture is a violation of Rogers' roaming agreement with Ice Wireless.
The case is now before the CRTC. Both Bell and Telus have made submissions, siding with Rogers.
"It's very hard to do mobile business here in Canada," he says.
Bishay adds that if he loses network access for Sugar Mobile, he'll consider moving the operation to the U.S.
And that would be just one more cheap cellphone plan for U.S. customers like Thornton to choose from. While she subscribes to TextNow, she says her housemate is looking at Ting.
"It certainly seems sad that you have Canadians with wonderful business ideas who can't offer those services to their fellow Canadians," she says.
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