Canada bans cellphone unlocking fees, orders all new devices be unlocked - CBC News

Yes however there is 3 telecoms which charge the same.

They are pretty public they all match each other for the most part, and working for Telus in the past they absolutely plan to keep prices the same across the board only doing specials to equalize customer base across all 3 providers.

Competition doesn't work when the competition realizes they can make more money working together then by competing.

Think of it this way.

100 customers exist.

Company A and Company B exist.

Product costs 10$ for the company monthly.

A and B are charging 100$ each to customers. A total of 20,000$ of revenue exists. 100 * 200. Profit is 18,000(90$ per customer)

A and B now have 50% each of the customers. A makes 9,000 and B makes the same.

A wants more money, so tries to compete with B. Problem is, say they drop their price enough so B customers want to come to A. Well...

If A lowers their price to 80$ and gets 100% of the customers, then then they get 70$ * 200 = 14,000.

So that's incredible, they are making 5,000$ more.

However the price of the product is only really 10$, so B is mad about this and lowers their price to 60$ and get's 100% of the customers. B earns 1,000$.

A lowers to 50$... A get's 100% of customers but now makes 8,000$... Less then the original 9,000.

So the best option is not a price war, a price war for competing for customers always ends up in the companies worst interest which is it's bottom line.

Instead what happens is, A and B agree 9,000 is good. However when A pisses of customers and some move to B, then A lowers prices on specials briefly to equalize the 50/50 split, then raises prices again and when contracts run out, force the people on the special plans to go back to paying the same.

Moreover it's beneficial to use excuses to raise profits.

A and B both know price's raising will cause customers to leave. But if everyone does it, the price is the price, the customer has no choice except a semblance of choice. So every time a decision like above happens, they complain this will cause prices to raise, it's against the customers best interest. They don't actually care, it actually cost them nothing to unlock phones, but they can raise the price a little bit, making shareholders happy and profits will increase.

This is a major flaw of capitalism and people thinking competition and the free market will make things better for everyone. It really doesn't, because companies are not stupid.

For example: What if C comes around willing to offer at lower price? That'll fix it, someone will come in to compete if they can do it cheaper! Well A and B are worth a lot of money, one of them buys C and welp, their goes the competition.

/r/news Thread Parent Link - cbc.ca