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OECD Report Confirms What Canadians Have Long Suspected: Wireless Pricing Among Highest in the World

The OECD last week released the 2013 Communications Outlook, a major international report issued once every two years with detailed comparative data on telecommunications throughout the developed economy world. Telus jumped on the report by posting its own release claiming that it “once again confirms that Canadian wireless pricing is extremely competitive internationally.” Notwithstanding those sunny comments, those that take the time to read the report (which must be purchased or accessed via an institutional subscription) will find that the reality is that the OECD reports that Canada is one of the most expensive countries for wireless services in the world. In fact, the OECD finds that not only do Canadian wireless services rank poorly when compared to the rest of the OECD, but so too do broadband Internet services (I’ll focus on broadband in a later post).

These wireless price rankings run from cheapest (1st) to most expensive (34th). Canada ranks 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.



Service Plan
Canadian Rank of 34 OECD countries from least to most expensive (2013 report)
Low Usage (30 calls + 100 MB data) 25th
Medium Usage (100 calls + 500 MB data) 24th
Medium-High Usage (300 calls + 1 GB data) 24th
High Usage (900 calls + 2 GB data) 21st
High Data, Low Call Usage (100 calls + 2 GB data) 22nd
Data only – 500 MB 32nd
Data only – 1 GB 32nd
Data only – 2 GB 29th
Data only – 5 GB 32nd
Data only – 10 GB 27th
Data only (tablet) – 250 MB 29th
Data only (tablet) – 500 MB 31st
Data only (tablet) – 1 GB 32nd
Data only (tablet) – 2 GB 29th
Data only (tablet) – 5 GB 26th

The expensive pricing surely has an impact on wireless subscriptions. Canada ranks last in the OECD in wireless subscriptions per 100 inhabitants, second last in households with a mobile telephone, and 23rd (of 34) in wireless broadband subscriptions per 100 inhabitants.

Given Canada’s comparatively high prices, it comes as no surprise that Canadian operators rank 4th in the OECD in mobile revenues, however. The OECD report also points to the value of more competition in the marketplace. For example, it compares the UK and France:

It is also worth posing the question as to why average revenue per subscription declined in France but rose in the United Kingdom. Even though some of these relative changes in revenue may also be due to fluctuations in exchange rates, it should be noted that a merger between two operators took effect in the United Kingdom in the second half of 2011, decreasing the number of operators from five to four. Meanwhile, the market in France underwent substantial changes in the lead-up to the introduction of a fourth operator at the beginning of 2012, with incumbents offering more attractive tariffs. Nevertheless, in both markets the main influence should have been felt from 2012, rather than in 2011. In France, for example, prices fell significantly following the introduction of a fourth operator, but there was also significant growth stimulated in the market.

The OECD report confirms that Canada wireless pricing is not competitive with the majority of the the world’s developed economies and supports what policy makers, consumers groups, and now the government believe: that experience elsewhere indicates that new entrants should result in greater competition and better pricing. 24th

32 Comments

  1. more misleading spin
    This article has long confirmed what I feared, that the last great bastion of Canadian freedom is nothing more than the people who claims to stand up against. If you have a group of 34 countries, unless they’re all tied, someone has to be 24th. Being 24th or 25th or 6th is utterly meaningless. Actual numbers, percentages, etc. These are all useful in making a comparison, but it seems Michael wants to take a page out of Openmedia’s playbook, by citing highly inflammatory but utterly meaningless numbers. How about this number? Canadians spend a smaller percentage of their disposable income on communications than the OECD average. I find it interesting that that didn’t make it into your article. We could also mention that canada has some of the highest investment per access path. In fact, the second highest in the world, and fourth highest per capita. Of course that wouldn’t fit your narrative.

    It’s at this point that one realizes that dishonesty runs deep here. We should mention that Canada has the second highest mobile traffic per user of any OECD country. Second only to the US. Canada’s rate is so high, it doubles almost every other country except israel and norway. I wonder if that might contribute to the high prices (that’s table 3.13, I guess you probably were hoping no one would try to check what you wrote).

    At this point I just have to stop because it’s getting embarrassing. I once bought into the spin of Openmedia and Michael Geist, but the lying and spin have just become too much.

  2. @crossmr
    So which telco do you work for? Or do you work for the Harper Regime?

  3. Crossmr is right…ok no he’s not.
    Why are you so upset about people trying to save you money? And what does mobile traffic have to do with anything? Does unused bandwidth go to waste? Canada has a high investment rate per capita because of its low population density. That’s true and it’s a cost of doing business in this country. That said Canadians are getting completely fleeced when it comes to wireless costs. That’s not spin or a fabricated narrative. It is fact my friend.

    And let’s go out on a limb and say that you’re completely correct about everything. Why would you argue against more competitiveness and lower prices? As a consumer that’s what we want. If companies make less money servicing me, why the hell would I care? I want the best service for the lowest price. And even if Geist is pulling these numbers out of his ass, if it leads to better service and lower prices, I’m all for it.

  4. I just wasted 5 minutes of my life reading this. It takes a very “creative” manipulation of the OECD report to spin this up the way Mr. Geist has. Shameful.

  5. drive by commenter says:

    So why did Rogers tell share holders that mobile data was a GOLD MINE of revenue?
    So why did Rogers tell share holders that mobile data was a GOLD MINE of revenue?
    Speaking as the subject being ‘mined’ I do see where that indicates that customers are getting a fair deal.

    Our cost of using mobile SHOCKS my colleagues from Asia.

  6. TelcoTrollSlayer says:

    Yeah, the Telco shills that frequent and disinform on the Geist site are pathetic and obvious!
    Crossmr and Cynic are pathetic… at least the real people with integrity aren’t paid to post corporate BS and disinformation around sites like Geist’s and OpenMedia. I wonder what Bernard Lord is up to today? ;) ;)

  7. @drive by

    I have no doubt your Asian buddies are shocked – when they see that Japan is more than twice the cost of Canada they should be shocked!

  8. @crossmr.
    Every blog post distils down the contents of the report. Geist’s use of rankings is a common and effective way to communicate the information in the report (which he has also linked to in case you want details). I have no idea why you call rankings ‘utterly meaning’ other then maybe you don’t like what they show. These rankings and ARPU are both very valuable ways to compare carriers and countries at a high level.

    You are instead suggesting he include more lower level detailed information that you have cherry picked, e.g. “investment per access path”.

    This reminds me of how, when a writer like Geist uses valuable and widely accepted composite data points, such as ARPU, the defenders of Robellus try to muddy the waters by bringing up extremely complicated sub-issues like geography, suggesting we debate that forever instead of using ARPU.

  9. @crossmr: Mobile traffic per user should drive prices down, not up
    We’re talking about plans that already take usage into account (i.e. MB of data, minutes, texts. etc) – so saying that Canadians use their phones more than anyone else is totally irrelevant. In fact, if Canadians are using their phones more, they are probably buying higher-end packages (which is separate from how much plans actually cost), which means that telcos should be bringing in more profit. Not less.

  10. Don’t need OECD report to tell us this
    Here is what our 2-person household spent on various utilities last month:

    $32.52: Natural Gas (Fortis BC)
    $37.27: Electricity (BC Hydo)
    $41.44: “High Speed” Internet (Telus)
    $87.22: mobile phone service (2 lines) (Koodo)

    Honestly, if we had to, we could live without the mobile phones and the Internet. Not so much electricity and natural gas. Unlike the energy utilities, the telecoms don’t even have to produce anything, they just move the bits that others produces. No question, the Canadian telecoms must be insanely profitable.

  11. Here’s what Augustin Díaz-Pínes, OECD report co-author said to the Wire Report on Friday, “Canadians, like Americans, are “high-consumption” mobile users, and typically pay more for smaller service packages in comparison to other countries. If you don’t want to use your mobile phone too much, it looks expensive. For plans with more calls and more text and more capacity, it looks better and better … The more you call, the cheaper it gets when compared to other countries.”

    Here’s what Mr. Geist said, “Canada ranks among the most ten most expensive countries within the OECD in virtually every category.”

    It’s interesting that the OECD commends Canada’s carriers for the lower cost plans that best align with the high consumption habits of Canadians while Mr. Geist finds fault with it. I guess he’s just one of those “glass-half-empty” kind of guys …

  12. What OECD said says:

    @Steph
    Nice cherry pick from the Wire Report article. A more representative comment:

    “Díaz-Pínes said he believes Canada’s prices are above the OECD average in most cases due largely to the presence of not more than three national players—Telus, BCE Inc. and Rogers Communications Inc.—each of which reported revenues that place them among the top 30 telcos in the world, according to the OECD report.
    He said the Conservative government’s policy objective of ensuring the presence of four carriers in each region of the country should lower mobile prices.
    France’s prices fell after new entrant Free Mobile (owned by Iliad S.A.) entered the market earlier this year as an “aggressive” fourth competitor to incumbents Orange (owned by France Télécom S.A.), SFR (owned by Vivendi S.A.) and Bouygues S.A.
    “We saw prices going down dramatically in France, for example, so this point about three to four is important,” he said.
    Díaz-Pínes said he believes the price of Canada’s mobile services is one of the reasons why Canada had the lowest mobile penetration rate of any OECD country, with 79.4 mobile subscriptions per 100 inhabitants, though Canadians have more purchasing power than people in many other OECD states.
    “You wonder why take-up is higher everywhere else and not there, especially if Canadians can afford it in general,” he said. “Pricing influences penetration rates.””

  13. Crossmr is right, but…
    Crossmr could have left out the 2nd and 3rd paragraphs, without losing his point. Instead he just comes off as a telco fan-boy…BUT….
    Mr. Geist HAS presented some RELATIVE data, buit hasn’t given us any ABSOLUTE data. We might only be paying a quarter or so more than those other 23 countries, and this still ranks us 24th. Overall, Mr. Geist’s blog posting does suggest a very biased opinion on wireless pricing schemes in Canada.
    That being said, once the infrastructure is in place, use of the bandwidth has essentially ZERO cost to the provider… So depending on how you cut up that fish will determine on whether or not the pricing is fair…carriers are entitled to a profit too.
    Anyway, while I agree with many canadians that the telcos seem to have been overcharging compared with other places on the planet, the data presented above does not fully support Mr. Geist’s opinion, since it offers only relative – not absolute – comparisons.

  14. @What the OECD said
    The comment you cherry-picked talks about the effect on pricing of a fourth wireless carrier in France, not Canada’s ranking on wireless prices relative to other countries. Just as France has a new carrier, we also have had a half dozen or so new carriers start up in Canada since 2008. I’m not sure why the OECD is unaware of this fact but they are based in Belgium… I trust you are also aware that most of France is still running at 2G data speeds and if you are lucky you might find an occasional 3G site. There is no sign that France is going to get the 4G LTE that we take for granted in Canada anytime soon. So comparing mobile data pricing between Canada and France is like comparing Ferrari’s to Lada’s.

  15. @telcotrollslayer – yes anyone demanding honesty is a telco shill. Why don’t you go read the report yourself rather than being spoonfed ambiguity by Mr Geist. This all harkens back open media’s recent lie where they claimed you could get 4 phones in portugal for the price of one in Canada. They totally ignored the initial purchase cost of the phone, and plans providing similar service are actually very close in price. Total cost of ownership between the two countries was nearly identical. It’s become very apparent that those who claim to stand up for us are more than willing to try and massage facts, use ambiguous wording, and outright lie in our name. While things have to change, they don’t have to change like that.

    @torn If every blogger jumped off a bridge should Geist as well? Rankings are meaningless. They are relative without context, and used just as they are here to inflame while saying nothing. Imagine this: A pepsi costs $1.50 in some country, in other countries the price varies, through all the OECD countries it costs $1.58 in Canada, which some how makes it rank 25th. Is the difference really so huge? No it’s not. When you rank a set of countries, everyone has to come somewhere. The question is, where do they come in relation to the average, and how far different are they from those who are number one?

    @steph of course it is, and if they ever had to compare like service between the countries, people like Geist and openmedia would run in fear, as they’ve done in the past. When openmedia started spouting their lies about the cost of phone service in portugal, I actually took the time to run a comparison between all major canadians carriers and portugal carriers for price of a new phone. When presented with the hard evidence that they were sitting there and lying to people, they refused to even discuss it. Just as Geist has done here. Rather than face his misleading nature, Geist has left his blog for others to defend.


  16. Data is where the big problem is. Telcos know it’s a money maker and they try and get every penny for it. I can get 1 gb for 1 cent from my hosting provider but ISPs charge $2.50 per 1 gb if you go over their set plan. Try to figure out the logic. Sounds fair for consumers?

    Regardless of the cost, for profit companies will always try to get every single dime in their own pockets before they think of yours. Only competition can fix that.

  17. TelcoTrollSlayer says:

    @crossmr said: “…those who claim to stand up for us…”

    NEWSFLASH: You’re NOT “us”, you’re THEM! – you Telco Shill Disinformation Clown!

    Remember that “us” don’t get paid to post BS, you do!

  18. @Crossmr
    I agree with TelcoTrollSlayer – Crossmr is OBVIOUSLY employed with a Telco, likely Telus, and is now scrambling for PR control. Judging by his verbose vernacular, it’s likely he’s an executive and will stop at nothing to protect the golden goose. Mobility in Canada is a joke. We receive less and pay more – to companies that both inhereted public infrastructure and made off with provincial heritage funds. You’ll have to forgive me if I don’t jump out of my chair and applaud telus for investing in the cellular infrastructure… that was funded by legacy services (which we are also gauged on), to ultimately expand their service area to make more money. Hardly cause for celebration by the masses. End of the day, we need the infrastructure – we don’t need the telus and bell’s in this country – anyone interested in stepping over everyone else to chase a buck is deplorable and unfortunately that’s my opinion on many of the people at both of the aforementioned companies, having personal dealings and experiences with them over the last 10 years.

    telus makes me sick.

  19. @North

    You really should do your homework before you tear off on a misinformed rant. It appears that are unaware that all the wireless networks in Canada, regardless of carrier, were built using shareholder equity, not public money. You also seem to be unaware that most of the wireless networks go through a major technology upgrade roughly every 18 months, all funded by shareholder equity. If the carriers didn’t continually invest in new technology we would still be using analog phones and text messaging wouldn’t exist. Wireless carriers do not get a regulated return on their investment so their shareholder investments are always at risk.

    You probably also mistakenly believe that the wireless carrier’s shareholders are all uber rich dudes. Not true. most of the pension plans in Canada, including CPP, own shares in the bigger carriers so your parents and grandparents are dependent on those companies making a profit so they get their monthly pension cheque. If those companies didn’t make a profit your parents and grandparents would be moving in with you so you could support them in their golden years. Like it or not, that’s how the system works.

  20. They’re really coming out in droves now – always do after OECD reports are released. (telco mis-informants)

  21. @North haha. It’s called having an education, and acting like an intelligent individual rather than a mindless sheep. I’m actually a Canadian expat who lives overseas, and has experienced some of the other markets that people like Geist and groups like OpenMedia hold up as some kind of shining example. I’d often supported Geist in the past until he joined in with the Openmedia style spin and ambiguous misinformation.

    You’re free to actually open the report yourself and look at it. I was even kind enough to cite table numbers for you, something I note that Geist couldn’t even do.

  22. Miscreant
    When I left to live in Germany in the 1990s the deal for Internet access was much better in Canada than over there. Urk! ADSL billed by the minute!

    When I returned the situation a couple of years ago the situation was the exact reverse. Germany has broadband access to suit all tastes, some of which even delivering the promised bandwidth, and at a price much lower than here. You can get TWO phone lines with three numbers, together with broadband for something like 30-40 EUR, including taxes, and you do have a choice of larger, more reliable (or less unreliable) providers. Unlimited bandwidth is standard, even though Deutsche Telekom caused a furore a few weeks ago by making sounds about introducing a 75GB cap.

    I also had a mobile phone, with a prepaid card whose credit never expired, thanks to landmark court decisions. And there is the EU doing its part to reduce the gouging.

    You do need to keep an eye on your bill, though. And ironically, eastern Germany has somewhat inferior thanks to the brand new FO network installed in the 1990s, incompatible with newer broadbnd DSL services.

  23. Torontokid says:

    Quick feedback
    Nice comments to this post.

    very clever @crossmr
    very smart @Brian

  24. boupierre says:

    Wight and Telco’s
    Being proud that we are no longer the most expensive country is a bit like the U.S. declaring victory on the war on obesity due to now being #2 in the list of major countries (Mexico is now #1)

  25. Vancouver says:

    Can there actually be a “Fourth National Carrier”
    Are you seriously telling me that some company (Verizon) is going to come into Canada, build a multi-billion dollar nationwide network, and then charge less than what we have now?

    How Dr. Geist suggests that even if a magic fairy poofed this network into existence absolutely free, somehow the consumer will pay less is sort of mind boggling and only something that a lawyer could come up with, because certainly someone with a lick of common sense knows better. Like every other commodity, they will charge exactly what people will pay and not a dime less.

    And for that matter, the magic fairy network would be the first national network as though Bell, Telus and Rogers cover what they can, they do not even come close to being national.

    It is time to get your head out of the books, the reports and the stats and to actually start *thinking* about the gibberish you blog.

  26. Crossnr. So you are saying you don’t work or have never worked for a telco? I notice you never said you didn’t. Just that you don’t live in Canada right now

  27. Interesting comments from both sides, unfortunately the quality of the dialogue has declined. If it means that my wireless costs go down then I am all for more competition.

  28. @crossmr

    I’ll agree that ranking 24th or 25th or 26th is meaningless. How about we divide the 34 nations into quartiles, and see in which quartile Canada ranks in each rate plan?

    If the cheapest (Q1) are from 1 to 8 and the most expensive (Q4) from 26 to 34, then Canada has 10 service plans in Q4, 5 in Q3, and none at all in Q1 or Q2.

    This also means that no rate plan is cheaper than the global median.

    I heard on CBC Radio this morning a Bell exec state that Canada was cheaper than the US in two-thirds of the categories. This means nothing if those plans are not the ones we’re using, or if the other one-third more than compensates for the loss.

  29. Ahmad Ramadan says:

    Student
    Thank you, Michael. I am confident your efforts will help Canadians get the service they deserve sometime in the future.

  30. Experience in France
    I am a Canadian currently living in France. When Free came into the market and started offering lower priced plans, the three existing carriers, Bouygues, Orange and SFR, all quickly scrambled and immediately started offering lower priced plans (though none quite measure up to Free as far as cost-competitiveness).

    With Free, I am not held to a contract and pay 20 euros after-tax (around $28 CAD) per-month for: 3gb of data, unlimited calls and texts (within France, from anywhere in France), as well as unlimited calls to US and Canadian cell phones, and landlines in 40 countries. I paid 10 euros for my SIM card, and will pay no fee when I cancel my service (i.e. I actually am not heavily penalized for not having a multi-month contract). I accidentally gave the wrong address to Free on two occasions, but was delighted each time I called when I realized I immediately got through to a person on the other line without having to go through a prompter and being put on hold.

    I am not sure where the political or consumer debate is at in Canada, but wanted to offer my experience in France as an example of something we could work toward in Canada. For the record, 81 percent of Canadians live in urban settings compared to 86 percent of French people.

  31. na
    @crossmr … I’m trying to figure out if you are truly stupid or just pretend to be stupid on online forums.

    The volume of money Canadians pay for a crappy mobile phone plan compared to the US or Australia is EMBARRASSING and OBVIOUS:

    I mean, one just has to compare the numbers. Here you are @crossmr, a TYPICAL COMPARISON. Canadians ought to be BOTH embarrassed by the following and THEN BLOODY DO SOMETHING!

    AUSTRALIA: $39.95/month for a mobile plan (Amaysim)
    unlimted message bank
    5GB of data
    unlimited SMS nationwide
    unlimted calls nationwide
    no set-up fee
    no contract

    CANADA: $85/month for a mobile plan (Bell)
    3 one minute messages for their “message bank”
    2GB of data
    unlimited SMS nationwide
    unlimted calls nationwide
    $35 set-up fee
    2 year contract required
    (THIS IS A *SPECIAL* OFFER, TOO!)

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