A price comparison study prepared for Innovation, Science and Economic Development Canada by Wall Communications, an economics consulting firm, shows that Canadians pay a lot more for wireless services than other G7 countries and Australia.
Note » Below you will find the Federal Government’s response to the study.
The study found »
“For the level three wireless service basket, the average Canadian monthly rate of $74.42 CAD is well above the average for the group of surveyed foreign jurisdictions of roughly $36. Canada ranks second highest among the surveyed countries, surpassed by Japan at $78.42.”
Gary NG, iPhone in Canada »
A chart from the pricing report comparing Canadian wireless prices to other countries, “in purchasing power parity (PPP) adjusted Canadian dollars” seen below, shows prices are more expensive in Canada when it comes to data ranging from 1GB, 2GB, 5GB and 10-49GB data buckets. Look at the price difference between Canada and Australia, for example:
Aisha Malik, Mobile Syrup »
Further, the study revealed that average prices from regional providers (e.g. Freedom Mobile, SaskTel, Vidéotron) were up to 45 percent lower than plans provided by the Big Three (Bell, Rogers, and Telus). The government says that although this progress is promising, the cost of mid-range plans have not moved, hence the push to lower prices.
The most significant difference in pricing between the national and regional carriers is found in the ‘level two’ basket level, which is 1,200 voice minutes, 300 texts and 1GB of data usage per month.
For this category, the national incumbents’ prices average at $77.81, while the regional carriers’ average at $42.43.
This is a 45.46 percent difference in pricing. Interestingly, the study also indicated that “the lowest average mobile wireless prices were generally found in Winnipeg, Regina and Montreal for most mobile wireless service baskets — consistent with the past several years.”
Study » Price Comparisons of Wireline, Wireless and Internet Services in Canada and with Foreign Jurisdictions 2019 Edition
The Government’s Response
Minister Bains announces next steps to help reduce wireless prices and promote competition
March 5, 2020 – Toronto, Ontario
More than ever, Canadians are relying on wireless services for their everyday needs, making access to high quality and affordable wireless services absolutely essential. That is why the Government of Canada is offering Canadian consumers more affordable options by helping to reduce the cost of mid-range wireless services by 25 percent and further increasing competition.
Today, the Honourable Navdeep Bains, Minister of Innovation, Science and Industry, took the opportunity to highlight the progress made to date to help reduce prices. He announced the release of the 2019 Price Comparison Study. The study shows that average prices from regional providers were up to 45 percent lower than plans provided by the three big national carriers. While this progress is promising, the prices for mid-range plans have not moved.
To that end, Minister Bains presented the next steps to lower prices for telecom services and promote competition. To track progress of a 25 percent reduction, the Government will report on wireless pricing quarterly by establishing a clear benchmark. This will also increase transparency. For cellphone plans that offer 2 GB to 6 GB of data, the three big national carriers—Bell Canada, Rogers Communications Canada and Telus Communications—are expected to lower their prices by 25 percent in the next two years.
If these targets are not met within two years, the Government will take action with other regulatory tools to further increase competition and help reduce prices.
To promote greater regional competition and lower prices, Minister Bains also announced the rules for the 3500 MHz spectrum auction. In the past, pro-competitive auction rules have allowed regional providers to more than double their share of low-band spectrum, creating more competition in the marketplace and lowering prices as a result. That is why this auction will reserve 50 MHz for small and regional telecom companies, encouraging more competition in the wireless market and ensuring they are on a more equal footing with the three big national carriers. The 3500 MHz bands are recognized around the world as one of the key spectrum bands for 5G technologies. This spectrum will support higher speeds, increased data usage and new applications.
“Canada is at an exciting turning point in the future of connectivity. Wireless services are no longer a luxury. They are a critical necessity—for working, for learning at school and for engaging in modern society. We heard Canadians when they asked for more affordable options for their wireless services, and we have delivered. Canadians shouldn’t have to choose between having a cellphone or heating their home. These new tools build on a number of initiatives we already set in place to help lower prices, improve access and ensure affordable, high-quality wireless services in every corner of our country.”
– The Honourable Navdeep Bains, Minister of Innovation, Science and Industry
- The 2019 Price Comparison Study also shows that Canadians have been paying more overall compared to consumers in other G7 countries and Australia.
- The Government’s priority is to enhance competition as it contributes to more choices at affordable prices for consumers. To enhance competition, the Government has taken these steps:
- Set out pro-competition rules for the 600 MHz band spectrum auction that led to regional providers more than doubling their share of spectrum, creating more competition in the marketplace;
- Issued in June 2019 a policy direction to the Canadian Radio-television and Telecommunications Commission (CRTC) to encourage all forms of competition and to foster affordability and lower prices in all telecom decisions;
- Engaged the CRTC to explore lower cost wireless offerings, resulting in its mandating the three big national carriers offer low-cost data-only plans; and
- Reserved 50 MHz in the upcoming 3500 MHz spectrum auction for small and regional telecom companies to enhance competition in the market.
- The CRTC’s ongoing Wireless Framework Review is looking at three broad areas: competition in the retail market, mandating wholesale access for mobile virtual network operators (MVNO), and the future of mobile services in 5G. The Government is following this proceeding closely.
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