Canadian mobile prices higher than peers, report...
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Jul 14, 2014  |  Vote 0    0

Canadian mobile prices higher than peers, report says

Canadians are paying higher than average rates for mobile phone service despite recent price declines, a report for Industry Canada and the CRTC says


Canadians are paying higher than average rates for mobile phone service despite declines in some pricing plans, an international comparison study shows.

The heaviest users of mobile phone services, including voice, text and data, saw their rate plan fall by 27 per cent last year to just under $80 a month, the study commissioned by Industry Canada and the CRTC found.

The lowest users of voice-only mobile service saw their rate plan rise by 16 per cent to nearly $36 a month, the report by Ottawa-based research firm Wall Communications found.

Typical users of voice and text services saw their rates fall by 15 per cent to just over $45 a month, according to the study released Monday.

“On balance… prices continued a general downward trend,” president Gerry Wall said in a statement.

However, when compared with mobile pricing plans in other countries, Canada’s international ranking worsened slightly, the study found.

Prices in Canada were “average” in 2012 but “higher than average” in 2013, when compared to its peers in the G7 — the U.S., U.K., France, Germany, Italy, Japan — plus Australia, the study found.

“When you look at how Canadian prices have changed over time, it’s generally been a downward trend and that continued this year,” Wall said in an interview. “When you compare them internationally, we don’t fare as well here as we did last year.

Last year, we were in the middle of the pack. This year, we’re still in the middle but more in the upper range and in some cases we’re the highest against the countries we compare with.”

The study found the newer competitors in mobile service — Wind, Mobilicity and Public Mobile — charge much lower rates than the major brands, Bell, Rogers, Telus, Shaw and Videotron. The biggest savings– up to 50 per cent — were reaped by the heaviest users, defined as customers with high call volumes, plus a set of features, 300 texts and 1 gigabyte of data usage per month.

The 89-page report provides a detailed breakdown of telecom service pricing, from traditional wireline telephone service to high-speed wireless Internet data costs.

For the first time, the study also compared Canada-U.S. roaming rates – and found very little difference in costs between the two countries, when special add-on plans are taken into account.

Roaming rates are extra fees charged when a mobile phone is used outside its home country.

Mobile phone service pricing has been a hot button issue for Canadian consumers.

The report comes a week after federal Industry Minister James Moore announced the government will auction additional wireless spectrum next year to smaller carriers in a bid to fuel competition and reduce prices.

John Lawford, executive director of the Public Interest Advocacy Centre, has applauded the move.

“Wireless competition is lacking in Canada,” Lawford said after last week’s announcement.

The country's three big incumbent carriers, Telus Corp., BCE Inc. and Rogers Communications Inc., control about 90 per cent of Canada's wireless market.

Iain Grant, a principal in The Seabord Group, noted the main phone companies have introduced alternative no-term “BYOD” or bring-your-own-device plans, which can yield a discount of $10 to $20 a month off the cost of monthly service.

He credited the government’s decision to ban three-year contracts that tied customers to a specific mobile service plan for an extended period.

The report also points out that Canada’s smaller carriers offer far lower U.S. roaming rates than their major Canadian rivals, “which again suggests that the alternatives offered by the new entrants should be viewed as a victory by consumers,” Grant said.

- With files from Star staff

Toronto Star

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