Canada’s Cellphone Plans Among World’s Priciest

by - 3 min read

Canada’s Cellphone Plans Among World’s Priciest

by admin - 3 min read

by admin

 

Despite consistently ranking highly on many “best country in the world” lists, there’s one area where Canada lags near the bottom of many rankings: cellphone rates. The Organization for Economic Co-operation and Development (OECD) has noted that Canada has some of the highest wireless rates among any of its member nations, with data plans in particular being disproportionately expensive.

In a 2016 report examining wireless prices across eight wealthy countries commissioned by the CRTC, digital consultancy firm Nordicity Group found that Canada was among the most expensive in almost every category. According to the report’s findings, the lowest amount a Canadian can expect to pay for cellphone service is just over $41 a month for 150 minutes; the comparable cost was $27 in the US, just over $20 in the UK, and as low as $17.15 in Germany.

When it comes to mobile data, plans for unlimited usage are currently offered by every telecom carrier in the US, with prices ranging from $50 to $90 USD per month. In Canada, however, no wireless provider offers an unlimited data plan, and industry experts see the concept as the stuff of fantasy.

Why Do Canadians Pay More?

The reason for Canada’s higher wireless prices, at least the one cited most often by Canadian carriers, is the country’s size. With the second-largest landmass on the planet, covering the Great White North isn’t an easy task for telecom companies. The Canadian Wireless Telecommunications Association proclaims that the country’s cellphone networks cover two million square kilometres and Canadian telecom firms spend almost $2.6 billion every year in capital investments. By comparison, however, Australia has a similarly spread-out populace, and Australians pay considerably less – in some categories, as little as half as much – for the same wireless services.

As far as many observers are concerned, the real reason for higher cellphone rates in Canada is the fact that Canada’s “Big Three” telecom providers – Rogers, Bell, and Telus – are effectively an oligopoly, and control as much as 90% of the market between them. They can charge Canadians just about anything they want, and as University of Ottawa law professor and tech industry expert Michael Geist wrote in 2013, they’re able to increase prices simply “because they can.”

With what amounts to a three-way stranglehold on Canada’s wireless industry (and helped by a law that prohibits foreign ownership of a telecom company, essentially barring an outside firm from entering the market and undercutting the existing players), the Big Three don’t have a reason to lower their prices; having Canadians pay among the world’s highest rates for cellphone service is good for business. And business has been good.

Canada’s Competition Bureau has had its eye on the country’s wireless industry for some time. In a 2017 statement about Bell’s acquisition of Manitoba Telecom Services (MTS) following a nine-month investigation, the bureau cautioned that Canada’s telecom giants can hike their prices “without effective discipline from competitive responses by rivals.”

Calls for Change

University of Toronto professor Walid Hejazi argues that Canada’s entire economy stands to benefit from opening the wireless market up to foreign competition, which he says would not only benefit customers, but also create jobs.

“The telecom industry in Canada should not be protected. Full stop, end of story,” Hejazi told The Canadian Press in 2017. “You have three companies that are protected from international competition and the service they provide us is inferior.”

For its part, the Canadian government has indicated that it has heard the public’s frustrations. According to a press release issued last December, “the Government is focused on the three elements of telecoms service that matter most to middle-class families: quality, coverage and price.” The release also said that Ottawa has “taken steps to promote competition,” and noted that officials have asked telecom carriers to lower their prices.

There are no concrete details about exactly what the government plans to do about wireless prices, or how much it’s willing to get involved in the Big Three’s business. But for cash-strapped Canadians who have grown accustomed to some of the world’s highest cellphone bills, just about any change would be a welcome one.


 

Justin Anderson | Staff Writer

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