May 27th was supposed to be the day that wireless data rates would potentially fall. It is now longer the case. MTS desolved a consortium formed to bid in an upcoming auction of Canadian wireless spectrum. This is very good news for the three heavy-weights: BCE, Telus, and Rogers. When the auction was announced, Telus fell from the high $50’s to $41.05 on the stock market. Rogers bottomed to $32.92 from $50. It is clear that Canada is in major need for another viable wireless competitor. Canada needs a new company that will offer wireless data access at a rate compariable to other countries. Otherwise, there is really no incentive for the big telcos to reduce rates.
What will happen to data prices with the arrival of the iPhone in June?
Rogers announced last year that it will release the faster iPhone to Canada in June. That’s great. More data consumption from more users should mean lower rates, right? Wrong! Rogers is the only network with 3G. 3G is fast for data transfer, and is something that the newer iPhones will need. So, until there is another wireless entrant emerging from the auction (we’ll know 3 months from now who it is), high data rates will stick around for a while longer.
Incidentally, when Rogers made the iPhone announcement, the stock rallied $1.60 to $44.50. Perhaps the best way to subsize high data rate plans is to buy shares in Rogers.