In a letter to customers this week, Rogers has announced it will be discontinuing its Portable Internet service on March 1, 2012.

The pre-Wimax service, first announced in 2005, used the Inukshuk Wireless network to deliver wireless Internet service to over 150 communities and 30 million Canadians across Canada.

Portable Internet customers are typically located in rural areas which are not serviced by cable or DSL internet. They typically pay $45 a month for internet service which provides download speeds of up to 3 Mb/s and a bandwidth cap of 30GB a month.

The shutting down of the Portable internet service will likely mean much higher prices for the bulk of rural customers who will be unable to sign up for cheaper DSL or cable internet service and will be forced into subscribing to higher cost 3G wireless internet service.

Back of the envelope calculations by Digital Home suggest a Portable Internet user who regularly consumes 20GB a month of downloads would have to pay over $1,000 a month for the same level of service using a regular Rogers Wireless 3G data plan.

For example, Rogers Wireless charges $66.93 per month for a Rogers data plans with a 5GB cap plus 5 cents for every megabyte of overage. Our hypothetical Portable Internet customer who downloads 20 GB a month would be subject to a whopping overage charge of $975 (19,500 MB x 5 cents per MB). A customer downloading a more modest 10GB of data over a Rogers 3G plan would still be subject to overage charges of $250.
Update: Several readers have pointed out that Rogers offers a 3G  Flex data plan for use with the Rocket Hub which is priced at $93.86 or $103.86 per month (depending on the speed you chose) plus $10 per GB for overages over 15GB. This would translate into $143.86 or $153.86 per month  for 20GB of download or $243.86 or $253.86 per month for the same 30GB bandwidth cap provided by the current Portable Internet service.  

Using the less expensive 3G Flex data plan and the higher download speed, the cost of 30GB of data transfer would be $253.86 per month, still over five times the price of the current Portable Internet plan. 
Of course, most Rogers Portable Internet users will be unable to pay such a high price for data and will have to either,  cancel their internet service or resign themselves to at least an 85% reduction in their bandwidth cap each month.

Discuss in Digital Home's Rogers High Speed Internet and Home Phone discussion forum.