Canada outranks peers in wireless prices: report

Canadians continue to pay among the highest prices internationally for wireless and broadband Internet services, according to a new report comparing telecom service prices released Thursday by the CRTC. The ninth annual study was completed in January and February of this year by Nordicity and ranks Canadian prices among those offered by carriers in the G7 countries (United States, United Kingdom, Australia, Japan, Italy, Germany and France) and Australia. Mobile wireless prices “are, on average, higher than those in other international jurisdictions,” the report said, citing Canadian carriers as having the highest prices for the most basic level of service (voice-only with 150 minutes) at $41.08 per month, which is 41.4 per cent higher than the second-ranked Japan at $29.06 per month. Canada was ranked as having the third-highest prices for Level 2 services (450 minutes and 300 SMS) and second highest in the next four service baskets. Unlike previous years’ studies, the 2016 standings included costs “based on the least expensive lite devices available from each service provider rather than the previous devices included in last year’s Study,” which were the most-popular premium options. This change to include the cheapest device available in some cases “resulted in a sharp decrease in prices as the service providers’ implicit device costs decreased significantly,” the report said. Compared to 2015, the average Canadian price for wireless voice service increased by 10.18 per cent and by 0.19 per cent for the Level 2 service basket. The remaining service levels — excluding Level 6, which was a new category of a shared “family basket” added this year — all saw overall price decreases of 12.38 per cent (Level 3, 1200 minutes, 300 texts, 1 GB of data), 2.43 per cent (Level 4, which is unlimited nationwide talk and text, more than two optional features, 2 GB of data) and 10.19 per cent (Level 5, which is unlimited nationwide talk and text, more than two optional features and 5 GB of data). “Most people switching to postpaid are getting smartphones and they won’t get a smartphone without data,” John Lawford, executive director of the Public Interest Advocacy Centre (PIAC), said in a phone interview. “So it’s just reflective of the high price for voice. And that’s one of the hidden costs we underlined when we were making submissions to the Competition Bureau" on various merger proposals. Overall, PIAC is “concerned about the high costs in Canada just generally and the trend appears to be upwards, especially in broadband and wireless and wireless data which are the growing areas, and which is hard on customers and especially hard on low-income people,” Lawford said. But prices for the more popular, high-usage plans are still lower than those offered in the U.S., “which is the most relevant comparison for Canada based on network size and economic conditions,” Marc Choma, spokesman for the Canadian Wireless Telecommunications Association (CWTA), said in an email. “While reports like these provide some insight, they do not consider average data usage per mobile user (Canadians rank fourth highest in the world) and average network speeds (Canada ranks second in the world).” American prices (based on plans offered in four cities — Boston, Mass., Kansas City, Mo., Minneapolis, Minn., and Seattle, Wash.) outranked Canada by 5.6 per cent for Level 2 services ($51.64 compared to $48.77), 9.4 per cent for Level 4 services ($89.50 compared to $81.05), and 17.7 per cent ($117.33 compared to $96.55) for Level 5 services. Canada’s wireless network footprint covers an area bigger than France, the United Kingdom, Germany, Italy and Spain combined, Choma said. “Throughout this massive service area, Canadians have access to average smartphone connection speeds that are more than 50 per cent faster, on average, than in those five European countries. And Canadians also use about 90 per cent more data, on average, than users in these countries.” Customers in other countries are heavy users and carriers in other countries are also expanding their networks, Lawford said. “It depends on what you want, but there’s, I think, a better price point between what’s being taken now and what is being promised for service,” he said. “In other words, there’s a bit of gold-plating going on here. Compared to roughly comparable countries with roughly comparable economies, it’s quite out of whack.” The Nordicity report cautions that there are “number of caveats that should be taken into account” when interpreting the findings, including that prices are not meant to be statistically representative and that there’s no consideration of quality of service or network speed or external factors, like geography. Canadian wireline broadband Internet service plans “generally decreased over the past year,” the report said, with the average Canadian price decreasing by 3.78 per cent, in stark contrast to U.S. and France whose prices increased by nearly 17 per cent. However, Canada’s prices ranked third for Level 1 service (3-9 Mbps with 10 GB of data, at $41.94 per month), fourth for Level 2 service (10-15 Mbps with 50 GB at $58.88 per month), third for Level 3 service (16-40 Mbps with 100 GB at $63.48 per month), second for Level 4 (41-100 Mbps with 150 GB at $78.77 per month), and second for Level 5 service (100-1,000 Mbps with 500 GB at $114.65). The United States ranked number one in all wireline broadband service levels. — With reporting by Charelle Evelyn at cevelyn@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Canada outranks peers in wireless prices: report

News | August 11, 2016

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Canada outranks peers in wireless prices: report

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