Oh, Canada: My Home and iPhone-less Land
It's morning; the dull Canadian sun seeps in through the blinds and the alarm sounds on my iPhone. I flip over, swipe to silence, grab the phone from off the side table, and quickly check my email for anything urgent. The weather widget shows clear skies, Twitter is abuzz with the latest SDK updates, and PhoneDifferent.com tells me Apple made a bit of money this year. Closing the browser, I flip on a podcast for some easy-learning and try to decide whether the day needs facing.
Sounds pretty normal, right? Actually, it's still pretty revolutionary, really. One device to rule them all, as the meme goes. The iPhone. Apple’s gift to the mobile world. And something that, as a Canadian, I can't legitimately own or use.
Biggest NAFTA- and Free Trade-powered partner, friendliest borders in the world, and seemingly endless source of hot singers and gifted comedians, and while we Canadians can buy every other bit of gear Apple produces, we get absolutely no iPhone love.
Why is that exactly? Read on.
Every cell phone needs a network to function. Voice, data, sms, etc. all requires an existing infrastructure, and the iPhone in particular needs the most prevalent global cellular infrastructure, GSM. Like the United States, Canada has both GSM and CDMA cell providers. Unlike the US, however, where there’s GSM competition between AT&T and T-Mobile, following a merger a few years ago, Canada has only one (1) GSM provider: Rogers.
Reason 1: GSM Monopoly
Way back in 1925, Ted Rogers Sr. invented the first radio tube to work off alternating current (AC), revolutionizing the industry and helping make the radio ubiquitous. Before his untimely death, he was even granted a television license which was still in the experimental stages at the time.
Ted Rogers jr. followed in his father’s footsteps, pioneering stereo broadcasting in 1962 with CHFI-FM. Come 1967, after helping popularize the FM system, Rogers moved into cable television, and by 1985 he entered the cell market with Rogers Cantel Inc.
Rogers began its cellular service with an AMPS network and later transitioned through IS-136 before adopting the de facto global standard of GSM in the 90s. (Currently Rogers is deploying their 3G/3.5G UMTS/HSDPA network to major cities with future plans to expand from there.)
During the early 2000s, Rogers faced GSM competition in the form of Fido. Originally known as Microcell, it was funded in part by T-Mobile and made its bones through (then) innovative and customer-friendly practices like per-second billing and, at one time, unlimited internet access. Due to the competition from Fido and similar upstart, Clearnet, Rogers and the two other large Canadian cell providers, CDMA monoliths Bell Mobility and Telus Mobility, began trying to match per-second billing or start their own boutique operations, like Bell’s Solo brand.
Then, in 2004, Rogers bought Fido. Per-second-billing had already been dropped by the 3 major telcos following Telus’ purchase of Clearnet in 2000, and with Rogers’ purchase of Fido, unlimited internet also disappeared for users not locked into a grand-fathered contract. Rogers wasted no time in integrating Fido into their own network, even while keeping it as a distinct brand and giving “Fido” customers the option of paying an additional $5 a month the “roam” on the Rogers network proper, or pay-per-minute at $0.30.
And with that, the Rogers' GSM monopoly began.
How does this effect the iPhone in Canada? In the US and EU, carriers competed to get the iPhone, and agreed to revenue-sharing models with Apple in order to lure valuable data-centric customers to their networks. As a the GSM monopoly in Canada, there is no other carrier that could deploy the GSM-bound iPhone, and hence no one for them to compete with.
Perhaps the iPhone could help Rogers lure customers away from their CDMA-based competition, Bell and Telus, but not only is this a partial consideration, it is more than a little muted by the existence of gray-market unlocked iPhones already on the Rogers network. (In other regions, regions without a monopoly, GSM providers would still have to compete even for unlocked iPhones.)
Even if Apple chose to sell unlocked iPhones themselves, directly through Apple Online and retail or, as past rumors have gone so far as to suggest, through ultra-high end retailer Holt Renfrew at a steep $799 a pop, it would still have to run on Rogers' network.
It's widely speculated that Apple used the iPhone to get many carriers to agree to unprecedented unlimited data plans at reasonable rates as a condition of their agreements. Lacking competition, Rogers has no incentive to cut its own data rates, which are highly limited and anything but reasonable.
Reason 2: Of Data Rates and Third World Countries
AT&T offers unlimited iPhone data plans for $20 a month. As recently as 2007, before Rogers’ made such information much harder to find on their site, their top-tier data option was $200 a month for 100MB. That’s literally 10x as much for an infinitely smaller amount of data. Leading Canadian newspaper, the Financial Post, has guesstimated that, given Canadian data rates, an iPhone plan would cost $295 a month and still include fewer minutes and less data.
This has led to companies such as RIM, Canada's homegrown pride and joy and makers of the market-leading Blackberry line, along with the likes of Google, to publicly blast the Canadian telcos for their data rates.
Recently, due to pressure from Bell and Telus, rates are coming down, but in only the most confusing manner possible. You can now find $7 - $15 data plans, but only for certain phones (e.g. only Blackberry Pearl or only HTC Touch), or only for certain services (e.g. only for email or only for wall-gardened browsers).
On February 5th, 2008, Rogers joined the fray with an "unlimited" mobile browsing plan for $7. The restrictions? Only Rogers- and Fido-branded phones qualify. No smart phones. No Blackberries. No Windows Mobiles. And certainly no iPhone. Further, access will only be permitted on Rogers' branded WAP browser. No Pocket IE. No Opera Mini or Mobile. (Reportedly, Rogers will check IMEI numbers to enforce the plans, and bill non-qualifying phones and non-Rogers' WAP usage at the usually steep rate of $0.05/KB (do the math).
Notwithstanding the near-impenetrable specials, standard monthly plans for Windows Mobile-based smart phones on Rogers remain from $15 for 2MB ($10 per MB overage) to $80 for 500MB ($3 per MB overage).
The embarrassing state of Canadian cellular data has led some to use the phrase "worse than a third world country". Indeed, the now-classic graph illustrating the phrase shows costs for 500MB of data transfer starting at $41 in New Zealand, climbing to $74 in Rowanda, stepping up to $102 in the UK, and then soaring the $375 on Telus in Canada, before exploding upwards of $1600 on Rogers.
As mentioned previously, Apple has widely been seen as pushing for fairly priced data plans to go along with their data-centric iPhone. Rather than applying the leadership they showed in radio, or even show basic grasp of economies of scale and volume pricing models (one wealthy/desperate business user @ $200 is dwarfed by $1000 casual users @$20), Rogers has resisted anything approaching fair (by international standards) data plans.
If Apple can not get fair pricing, it's difficult to see an iPhone launch in Canada. And even if Apple is willing to bend on the fair pricing (as it has has already by accepting data caps in some EU countries), it's almost impossible to believe they would launch in a country where any reasonable use would result in $1000 monthly data bills. Would you pay that much for an iPhone? Or, rather, an "Apple" Phone...?
Reason 3: Oh, That Other iPhone, Eh?
Almost immediately after the iPhone was introduced by Steve Jobs, high atop the Macworld 2007 stage, ads began to appear for the iPhone in Canada. What's that you say? Ads in Canada for the iPhone? Yup, just not Apple's iPhone. It turns out a Canadian company named Comwave had been selling their own VoIP device, called the iPhone, since 2004. And boy did they jump on the newfound, Apple-powered buzz.
Some, including Canadian public broadcaster, CBC, have commented that a trademark dispute between Apple and Comwave over the iPhone name is a roadblock that could take up to 2 years to resolve.
Of course, this isn't the only iPhone related trademark dispute Apple has had to face. The moment Steve Jobs pulled his revolutionary new device from his pocket and called it the iPhone, no doubt other phones started going off -- at the Cisco legal offices in the United States. At the time of the iPhone introduction, Cisco -- not Apple -- held the registered trademark on iPhone in the US. And almost immediately Cisco made an announcement of their own: lawsuit.
Apple and Cisco settled their dispute just over a month later. That Apple didn't own the iPhone trademark in the US and went ahead with its introduction there, however, could cast some doubt on how much of a factor Comwave's claim is when it comes to delaying the iPhone launch in Canada.
On the flip side, settling a lawsuit after announcement but prior to launch, and settling one post-launch are different situations, and different intellectual property rights laws between Canada and the US could also be a consideration for Apple.
But let's face it, when you say iPhone in Canada, people don't think of Comwave -- they think of Apple.
The Great Gray North
Regardless of whether it's Rogers' GSM monopoly, ludicrously high data rates, Comwave's iPhone patent, or simply Apple's lack of urgency in the Canadian market (ranked 15th, after Mexico and before South Africa), as it stands right now there's no iPhone in Canada.
Or is there?
Rumor has it there are tens of thousands, bought in the US and unlocked in Canada. The same rumor holds that they are one of the more popular single devices on the Rogers network already -- so popular they are unofficially sanctioned by Rogers tech and customer support. Numerous forum posts comment on getting help choosing iPhone plans (exorbitant as they may be) from Rogers reps.
As far back as firmware versions 1.1.1 and 1.1.2, when unlocking iPhones was still a fairly tricky proposition, I routinely saw them being sold to Canadians via the web, and in person at mall kiosks. I also saw them at big box retailers being used by employees and customers alike. Now with virtually one-click, automated jailbreaking, activating, and unlocking tools available for firmware 1.1.4, gray market iPhone use in Canada can only be on the rise. And that's not even counting the inevitable increase in buzz come June and the iPhone 2.0 and SDK release, and the almost certain arrival of the second generation, 3G data-capable iPhone.
(No guesses yet on what size data bill a 3G iPhone would generate on Rogers...)
To Be Continued...
So this is where we are with the iPhone officially coming to Canada.
Gossip lingers on, month after month. Every time another country mentions the possibility of an iPhone launch, a "Canada too!" rumor pops up.
Some of us write to Apple and to Rogers to show them the demand. Some of us complain to the Canadian Radio-Televison and Telecommunications Commission (CRTC - similar to the US FCC) and the Minister of Industry, desperate for some government intervention on the monopolistic abuse with regards to data rates.
Meanwhile, Canadians make do with the iPod Touch and a second device for voice and data, or go to a gray market, unlocked iPhone to save the pocket-space.
I'm in the second category, of course. And every night, I check my news feeds, watch a video, and put on a podcast (set on a 15 min. auto-timer) as I drift off to sleep, hoping and dreaming for an iPhone announcement come morning...
(Want to see the iPhone in Canada? Contact Apple, Rogers, the CRTC, and Ministry of Trade via the links above, and Digg this story to help spread the word!)