A $50 cap on extra wireless data charges such as roaming fees may not be high enough and could end up inconveniencing consumers, MTS Allstream CEO Pierre Blouin said Thursday.
A cap of $200 to $250 may be more in line to prevent customers from losing service, Blouin said in an interview after a presentation to investors.
A $50 cap can kick in sooner than anticipated in some countries, he added.
“We would have to stop service to a whole lot of customers, which would create quite a bit of unsatisfaction, in my opinion,” he said.
The $50 spending limit on extra wireless data charges is one of several ideas on the table as the Canadian Radio-television and Telecommunication Commission holds hearings on a national wireless code of conduct.
“We think it should be a bit higher based on the experience we have had with our customers,” Blouin said.
The Winnipeg-based telecom company will comment on the proposed wireless code at CRTC hearings on Friday.
Consumers are usually notified of how many megabytes of data they have used via text message, often making it difficult to understand the additional fees they will see on their monthly bills.
For example, 10 megabytes of data would allow a cellphone user to, for example, download two songs, do some emailing and pull up a couple of web pages, while 50 megabytes of data would allow customers to view about 50 maps, 200 web pages, 1,000 emails or over 5,000 tweets.
Some countries do not immediately provide real-time data usage, Blouin said, further complicating a low cap.
Rogers (TSX:RCI.B) and Telus (TSX:T) have already told the CRTC to scrap the $50 cap at the hearings this week, saying it would be too disruptive to service.
Under the draft code, service providers would have to stop all services that can cause consumers to have additional fees once the total amount of extra fees reaches an amount set by the consumer, or in the absence of an amount set by the consumer, $50.
MTS Allstream (TSX:MBT) will comply with the amount the CRTC sets, Blouin said.
“I think the issue that we have to figure out is what is the right amount,” he said after the company outlined growth for 2013.
For fiscal 2013, MTS Allstream expects more growth from its wireless, Internet and Internet protocol TV services to consumers, and from its high-speed data networks in its business markets.
The company’s Allstream business division is undergoing a strategic review, which could result in the sale of the division.
The Allstream division provides services to corporate, institutional and government customers across Canada.
The strategic review of Allstream was announced last September and Blouin noted that analysts have complained it’s taking too long.
“For us, we’re focused on getting the right outcome for our company and our shareholders, not the fastest outcome but the right outcome.”
MTS Allstream released its quarterly and year-end financial results on Wednesday after markets closed.
The company reported a net profit of $37 million in the fourth quarter of 2012, almost unchanged from $36.9 million in 2011.
Revenues in the fourth quarter were down six per cent to $413.1 million from $439 million in the same quarter of 2011. Earnings per share were down a penny to 55 cents year-over-year.
For 2012, MTS Allstream said it had revenues of $1.7 billion, down 3.5 per cent in 2012, mostly due to a decline in revenue from older technology and voice services.
Net net profit was higher at $175.4 million in 2012, compared with $167.1 million in 2011. Earnings per share for fiscal 2012 were $2.63, up 3.1 per cent in 2012.