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Uncompetitive Canadian Pricing Threatens Mobile Internet

Appeared in the Toronto Star on July 23, 2007 as Time to Revamp Mobile Internet Pricing

The promise of an always-on mobile Internet – delivered through cellphones and wireless devices – has long been touted as the next stage in the evolution of electronic communication and commerce. That next stage is a reality in many countries, yet Canada finds itself rapidly falling behind even developing countries as a consequence of overpriced mobile data services in our cozy, uncompetitive market.

Until recently, the conventional wisdom held that there were two barriers – technology and cost – to the emergence of widespread mobile Internet use.  From a technological perspective, most cellphones and wireless devices could manage email and text messaging, but were ill-suited for the full Internet experience including browsing and Internet video.  That technology barrier has largely been eliminated, fuelled by popularity of devices such as the Apple iPhone.

The cost barrier still looms large, however.  Canadian carriers have treated mobile Internet use as a business product, establishing pricing plans that force most consumers to frugally conserve their time online.  Indeed, the mobile Internet in Canada is reminiscent of Internet access in the mid-1990s, when dial-up access dominated the market and consumers paid by the minute for their time online. 

Today, not only are cellphone data speeds comparatively slow – the attractiveness of wifi access for Research in Motion’s Blackberry or the iPhone is based primarily on the availability of substantially faster speeds – but they are shockingly expensive since cost is measured by the amount of data downloaded.

For example, Rogers – Canada's sole GSM provider and therefore the only telecom company currently equipped to offer the iPhone – offers a starter data plan that provides 1.5 megabytes of data per month for $15 (each additional MB is $21).  Since that is not even enough data to download a single high-resolution photograph, most consumers presumably opt for more.   The company's biggest data plan provides 500 MB, yet costs $210 per month – far beyond the reach of most consumers.

This pricing, which is comparable to plans found with Bell and Telus, is not close to competitive internationally.  The introduction of the Apple iPhone in the U.S. has placed the spotlight on the difference between the Canadian and U.S. market, where AT&T, the sole iPhone provider, offers unlimited data for only US$20 per month (the total monthly price is US$59.99, but AT&T divides the bill as two-thirds for voice and one-third for data).

While it is tempting to believe that the AT&T offer is an anomalous product of pressure from Apple, the reality is that unlimited data plans are becoming commonplace around the world.  For example, consumers in Lithuania can purchase an unlimited data plan for less than $3.00 per month, while similar plans can be had in the Netherlands and France for under $15.00 per month. 

In fact, Canada not only trails the U.S. and Western Europe, but Eastern European countries such as Poland and Romania, Asian countries such as Malaysia, and African countries such as Rwanda all offer unlimited monthly data plans for less than $50.

Even in those countries without unlimited data plans, the pricing is often far better than what is found in Canada.  Italians can purchase 1 GB – double the largest Rogers plan – for $29 per month, while a 500 MB monthly plan is $45 in South Africa, $79 in Mozambique, and $103 in Tanzania.

The negative consequences of Canada falling behind even the African market should not be underestimated.  RIM has expressed frustration with Canadian pricing, predicting that carriers could sell "eight or nine times" more Blackberries if they lowered data prices to levels found elsewhere. 

Reduced sales are only part of the story.  High data prices mean Canadians use the mobile Internet less than people in other countries, which Google has noted leads to lower Canadian usage of web-based email or online mapping services from wireless devices.

Canadian carriers would do well to reshape their approach to mobile data by better servicing consumers, however, the longer-term solution lies in Industry Minister Maxime Bernier cracking open the wireless market by encouraging new entrants through a spectrum set-aside.  The prospect of a new national wireless carrier offering unlimited data – and perhaps even the red-hot iPhone – would do wonders for a once-proud market that now lags behind the rest of the world.   

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law.  He can reached at or online at


  1. Danno Bonano says:

    Excellent article. I am more curious on what, if anything, the Canadian carriers are doing to reverse this downward spiral. Are there any government bodies regulating any data rates? What can we normal citizens do to place pressure on the right parties to halt and turn-about this trend?

  2. Tyler Weir says:

    I would have had a Blackberry years ago had the cost for any plan been reasonable.
    I was amazed at the deal the iPhone plan was in the States and it’s the only barrier for me when the iPhone comes here. I can handle the cost of the device, but if I then have to pay $200+ a month for data I’d be supporting the saying that “a fool and his money are soon parted.” We need more competition for carriers here. Maybe Google will save us: [ link ]

  3. Chris Charabaruk says:

    Danno: I would suppose that they are doing nothing to reverse said spiral. It would mean their top executives would have to buy one less ivory back-scratcher each month.

  4. David Canton says:

    I am more jealous of the iPhone monthly fees than of the iPhone itself. When I saw the details of the iPhone data/voice plan, I noticed it was about the same cost as I pay for my data/phone plan. The difference in what one gets for the 2 plans is staggering in terms of minutes and Mb’s. And no texting is included. I find myself switching the Wifi on my smartphone on and the data radio off whenever I can – and limit web browsing to Wifi use to keep the costs under control.

  5. Crackpot
    Well, We’re far behind technologicaly not only there. In a way, It’s totally unacceptable as we are the most heavily taxed country in the whole north america.

    CRTC should get into this. This is definitely a major issue.

  6. Correctomundo says:

    Too True
    Thank you. I’ve been saying this ever since I moved here this summer from the states. The data plans are outrageous and completely out of line, with the rest of the world.
    Were carriers to drop the prices on data, they would see greater throughput and greater revenues than presently.

  7. says:

    First off. Rogers has a 10mb plan for $10, it just launched this summer, which is a better deal than the 7mb for $40 I paid for previously. But I agree this is absurd. Even telus had a $100/month \”unlimited\” plan which was anything but ended up costing me $9500 and wrecking my credit when I refused to pay it.

    Par of the game, which I was uninformed of, was that there are limits to the \”unlimited.\”

    I could be infinately more productive in my business if I had always on highspeed wireless access in my laptop, then I could work from anywhere in the city and service my clients much more effiecently. It would allow me to offer levels of service I cannot now without forking out substantisal sums of money.

    Even on my palm treo, I count the bytes to stay under that 10mb limit. It\’s frustrating to have a phone that can play video over the air or have msn running 24/7 but you have to set your phone to only download headers from your e-mail server every hour lest you unleash the beast of the Data Overage Charge.

  8. Michael H
    Very well said. Although I lack any optimism that any, of the Telcomm’s business practices will change any time soon! Hopefully somebody can put some pressure on them. This is a disgusting situation.

  9. In fact Fido has a $7 data plan which after I got my Iphone they told me is only for \”devices supported by Fido\”. So I tried it for a month anyways, and guess what, the data actually went into the unlimited plan so I didn\’t have to pay any extra cash. Well happy as I was I continued it for the second month. No downloading, nothing heavy weight, only browsing. The second month bill though had data charges in it. Haven\’t got the bill yet to check what they are but they seem to be less then $2 and I used the internet much more.