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OECD Report: Canada Still Among Ten Most Expensive Countries for Broadband Internet Services

Yesterday I blogged twice about the 2013 OECD Communications Outlook, a major international report issued once every two years with detailed comparative data on telecommunications throughout the developed economy world. My first post noted that Canada’s wireless performance ranks poorly, as it is among the most ten most expensive countries within the OECD in virtually every category and among the three most expensive countries for several standard data only plans. After Telus responded to my post, I followed up with a second post that examined some of the Telus-specific data used by the OECD. Those measures ranked Canada as the 2nd most expensive of 7 countries for 1 GB of wireless data (at speeds Telus customers are likely to receive) and the second most expensive of 19 countries for 500 MB of wireless data for tablets (again at speeds Telus customers are likely to receive).

The OECD report also includes comparative data on broadband services with Canada ranked among  the ten most expensive countries in virtually every tier (note that the OECD measures the cost by purchasing power parity so that differences in income are factored into the analysis).  For example, for plans offering 54 GB of data per month at speeds of 45 Mbit/second, Canada ranks as the 9th most expensive in the OECD. Move down a notch to 42 GB of data per month at 30 Mbit/second and Canada is the 8th most expensive country in the OECD. At slower speeds, Canada remains expensive – 33 GB of data per month at 15 Mbit/second is the 11th most expensive and for 18 GB of data per month at 2.5 Mbit/second it is the 9th most expensive.

Wireless broadband services fare even worse on a comparative basis. As noted yesterday, Canada is the third most expensive country for a monthly wireless broadband subscription of 500 MB or 1 GB per month. Moreover, the wireless broadband services for tablets fares poorly as well with Telus’ offering ranking as the second most expensive service among 19 countries offering comparable speeds.

The report also includes an interesting chart (Table 7.29) that tracks changes in broadband over the past seven years by following a single service plan from each country starting in 2005 and recording how it changes over time. The Canadian example was a Bell service that shows speed, cost, and bit cap increasing during the 8 year period. In 2005, the service was 5120 kbit/s for $50.00 per month with no bit cap.  Bit caps were introduced to the plan in 2007. By 2012, the speed has increased to 15360 kbit/s and price had increased modestly to $52.17. While that may not sound unusual from a Canadian perspective, the majority of OECD countries (though not all) have experienced speed increases with price decreases. These include the following (speeds plus local currency cost):

Country
2005 Plan
Same Plan in 2012
Australia 1536 kbit/s for 129.40 20480 kbit/s for 61.90
Austria 2048 kbit/s for 54.90 8192 kbit/s for 18.38
Belgium 4096 kbit/s for 54.95 30720 kbit/s for 34.86
Czech Republic 1024 kbit/s for 3568 20480 kbit/s for 700
Denmark 4096 kbit/s for 499 20480 kbit/s for 260.06
Finland 24000 kbit/s for 68.9 24576 kbit/s for 33.2
France 18432 kbit/s for 39.90 20480 kbit/s for 36.90
Greece 1024 kbit/s for 32.90 2048 kbit/s for 32.31
Hungary 2048 kbit/s for 22188 15360 kbit/s for 4880
Japan 102400 kbit/s for 4064 204800 kbit/s for 3873
Luxembourg 3072 kbit/s for 90.50 20480 kbit/s for 79.00
Mexico 1024 kbit/s for 599.00 3072 kbit/s for 389.00
Netherlands 8192 kbit/s for 74.95 81920 kbit/s for 44.17
Norway 4096 kbit/s for 549 16384 kbit/s for 478
Poland 6144 kbit/s for 291.58 10240 kbit/s for 107.46
Portugal 8192 kbit/s for 59.99 24576 kbit/s for 25.49
Slovak Republic 1024 kbit/s for 52.74 5120 kbit/s for 13.77
Switzerland 2400 kbit/s for 99.00 10000 kbit/s for 74.35

While some countries have had both speed and price increases (Germany, Iceland, Ireland, Italy, Spain, UK) or no change in speed (US, Korea), 18 of the 30 countries tracked since 2005 have experienced price and speed move in the opposite direction. The chart is anecdotal and does not account for inflation, but it highlights how the growth of broadband services in many countries have led to better speeds and lower pricing. Canada has unquestionably experienced the faster speeds, but OECD data indicates that we remain comparatively a high-cost country for broadband Internet services.

18 Comments

  1. And why are prices *INCREASING*?
    What really irks me is that 10 years ago I could get low-tier broadband service for about $35/month from both Shaw and Telus. Today, both providers’ lowest rates for broadband are $50 (10mbit) & $45 (6mbit) respectively. I would’ve thought that by now, 10 years later, costs would have dropped significantly for similar service, and would expect rates to drop correspondingly. But no, we pay more, and as you note, often for less due to caps / throttling / BS. What possible justification can there be?

    Then they scam us with should-be-illegal bundling plans, so those of us that don’t want to shovel money at them for TV and phone service as well end up paying *even more*. It’s almost as bad a scam as wireless handset contracts / subsidies.

    This country sometimes…

  2. @Keenan

    You think Canada is expensive you should try living in the US! I pay $45/month for a 1.5 Mb/s internet connection at my home in Arizona compared to $35/mo for a 15 Mb/s service at my home in Alberta. Even if you were willing to pay more for faster internet in Arizona you can’t even get it because it’s not available!

  3. I was scanning the Huffington Post this morning and noticed an article talking about an ongoing feud between “consumer advocates” and Canada’s telecom firms. One of the main “consumer advocates” mentioned in the article was our very own Dr. Geist. The article links to an earlier Huffington blog post by Dr. Geist and the OpenMedia website. It looks like the good Dr. may have crossed the line from objective educator to professional protestor so perhaps it is time for the university to investigate whether it is appropriate for public money to be used in this way.

  4. @Gregg
    Of course, and then we should replace Geist with a former exec from Telus right? I think the CRTC probably needs some more telecom execs too again. :)

  5. @Eric L
    You missed the point. If someone wants to be a professional protestor or activist then they should do so on their own dime and not be doing it as a civil servant paid by a publicly funded university. Groups like OpenMedia get lots of money from private donors so they can easily pay for full-time activists and lobbyists. If the university needs to replace him then it should be with another copyright lawyer since that appears to be mostly what they hired him to teach.

  6. @Gregg
    Michael Geist’s postings are all carefully researched and documented. He writes frequently on issues relating to copyright in Canada and on issues related to access to communication in the form of wireless and internet access. The two topics are related, and indeed, in Canada, the same companies that have a stake in copyright matters also have a stake in matters relating to wireless and internet access.

    f you would be so kind as to show, with citations, how Mr. Geist is biased or distorts the facts, then I at least would welcome the injection of new information. What is your opinion on this and previous postings on charges for bandwidth in Canada? Do you think they are reasonable, and if so why, and if not, why not? All that you have said so far is that Mr. Geist has an opinion and that he should not be allowed to express it because he works for a public university. I do not want Canada to be a place where people cannot state in a careful and well reasoned way what they feel on any subject, no matter who they work for. You are coming across as someone who is alarmed at what Mr. Geist is saying and wants him to be made to shut up. Again, please explain what your opinion is related to these postings and why.

  7. @Ian M

    My opinion is irrelevant. What matters is when the media (e.g. today’s Huffington Post) lump his actions in with “consumer advocates” in an ongoing feud with Canada’s telecom firms. He created that brand for himself and now has to figure out how to undo it or accept the consequences. Perhaps Mr. Geist’s actions have been misunderstood by the media, in which case he should ask for a correction and an apology.

  8. @ian m
    Let’s take his recent article regarding wireless prices. How does he bias or distort facts? He uses meaningless rankings, which are relative rather than absolute pricing and percentages to talk about Canada’s position. He intentionally leaves out key facts like how Canada’s wireless data usage dwarfs every other nation out there except the US, and how Canadians spent less than the OECD average of their disposable income on Wireless. I don’t think he should shut up, he should just be more forthcoming. I supported him in the past, but he’s currently engaged in a deceptive spin-style form of public debate, and I simply can’t support that.

  9. @gregg

    You pretty much suggested he should not be in his job because of what he had been called. Read his blog and make your own decisions.

    @crossmr

    Why is the fact that Canadians spend more relative to most other countries misleading? If people in Australia spend considerably less than me for the same service I am very interested. What does the rate of wireless usage have to do with whether or not we are paying too much? I am interested in what you have to say on this. Please elaborate.

  10. I don’t get why being someone whose stance makes one a consumer advocate would require an apology from anyone or make someone get to suggest he should not have his job any more. I also don’s see why the fact that Canada ranks as one of the most expensive places to get wireless service is meaningless. Comparisons against OECD averages or that we use more wireless than others in the world does not really counteract the high relative rates we pay. If those things tell a different story I’d love to hear how.

  11. @ian m
    You can say that we spend more than australia. But what does that mean? How much more? in what way?
    That is what makes it meaningless and misleading. He essentially cherry picked meaningless numbers and lead with them. Here is a hard number: Canadians have double and triple the usage of other nations when it comes to Wireless data. The US only barely out paces them and only two other countries use slightly more than half of what Canadians do. If you use more service, your bill will be higher, that’s how it works. Do you think that if you use more your bill should be cheaper?

    For example, if a pepsi costs $1.50 in the US and costs $1.51 in Canada, we could say:
    “Pepsi price higher in Canada! Demand lower pepsi prices!”
    This is true, but the fact is it’s only a penny more. We could also say
    “Pepsi price is 0.7% higher in Canada than US”
    Which one is going to get people worked up? Geist, and others like him, like to use the first statement.
    Both are true, only one is actually informative, the other is attention grabbing.

    If you look at some of the charts, you’ll see that there are charts where 1/2 countries have a really low price, then a group of 10 or so countries with similar prices, and then another group of 10 or so countries with similar prices (only slightly more than the first group), Canada ends up somewhere around the end of that second group. Average and percentage wise, they’re not really that far off, but instead saying “They rank 24th!!!” has a completely different perspective, rather than saying Canada $1 above average.

  12. @Gregg
    Why should someone who works at a public university not be a consumer advocate? Should they only be corporate advocates who work there? What difference does it make?

  13. @Ki
    My point exactly.

  14. @Ki

    Public servants must perform their jobs objectively and without political bias. If they want be politically active on any social, political or economic issues they have to do so on their own time.

    If we pay our public servants to act as protestors and activists who will do the jobs they were hired to do? Are all political issues fair game or do we need to put boundaries around which issues they can be paid to act as protestors or advocates? If so, who will decide? There are lots of political issues to choose from – abortion, gay rights, global warming, assisted suicide, etc.

  15. Belize
    Add Belize to this list 300kbits $45

  16. Use fact and intellect, troll
    @crossmr
    Stop using manipulative terms and statements. The OECD does more research than you are declaring and not anecdotal evidence as you make it seem. From basic economy 101, you everybody knows, the more people use something the LESS expensive it becomes, fool. This is why you can afford a TV, mobile and Internet. You are not special enough to get one yourself, but in masses you can demand such things at affordable prices. Canada has a pseudo monopoly on telecommunications partly due to government dictation by legislation. It should stop, but stupid and fearful immigrants allow it because they don’t want to go back to their third world countries. Check the prices in Scandinavia to see how a real advanced country lives. Educate yourself.

  17. actually troll
    That is not what anecdotal evidence is. I said they’re using ambiguous terms. If you want to call others out on their intellect, try getting some yourself first. Read the actual report yourself, that’s what I’m telling you to do. Geist left out key points, and used ambiguous terms to color the perspective. While there are improvements to be made, the pipe dream that he and openmedia seem to be sharing is nothing more than that.

  18. Expensive Though
    It is astonishing that the high speed internet price has slashed up to 85% over the past five years and still sad to hear that its still expensive here. I check though this official report her http://point-topic.com/free-analysis/broadband-tariffs-country-ranking-report-q1-2013/ and found that in many countries the situation lies the same. I believe in the near future, we could enjoy basic internet free of cost.