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Canada's Communications Outlook: Average At Best

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Tuesday July 17, 2007
The OECD has just released its Communications Outlook 2007.  The report contains an incredible amount of comparative data on phone, broadband, and broadcast markets in all OECD countries.  Each country will look for its own rankings (US, UK, Australia), but there has yet to be much Canadian coverage with the exception of a puzzling self-congratulatory press release from the Canadian Wireless Telecommunications Association trumpeting data that finds that some Canadian mobile rates are cheaper than in the U.S. and Mexico and close to average across the 30 countries in the survey.

A closer examination of the report, however, finds that that Canada has little to brag out.  For example:
  • Canada ranked second last in the OECD for the total number of mobile subscribers.  For medium mobile users, Canadian plans ranked among the most expensive in the OECD.
  • Canada placed far behind other countries for innovation.  For example, Bell Canada was the only Canadian telecom provider to obtain patents in the United States with four since 2003.  By comparison, AT&T, British Telecom, NTT, France Telecom, Deutsche Telekom, Telecom Italia, and Korea Telecom have all obtained dozens (or hundreds) of patents in that same time frame.
  • Canadian investment in telecommunications was average, trailing countries such as the US, Australia, Japan, and the UK.
  • The OECD found that, on average, mobile revenue per subscriber dropped from 2003 to 2005 due to increased competition.  In Canada, revenue increased during that period. 
  • The report reconfirms Canada's sinking ranking in broadband subscribers along with its relatively high prices for broadband (18th in both monthly pricing and per MB pricing)
While there is so much in this report that everyone can find something to either gloat or criticize, an objective reading confirms that Canada's once proud position as a communications leader has slipped and it now ranks no better than average on the world stage.
Comments (6)add comment

james said:

patents?
I'd like to point out that the number of patents obtained in the USA is not a particularly useful method of measuring capacity for innovation. Software patents, in particular, are handed out very liberally, and there is growing evidence that the USA's propensity for handing them out is beginning to negatively impact the industry as a whole. Canadian companies should avoid this sinkhole of litigation and instead focus on adhering to the idea of agile innovation, win in the marketplace by giving customers exactly what they want, rather than trying to tie them to plans by giving them no other choice.
July 17, 2007

Walter Dnes said:

...
Having a low number of mobile subscribers is not necessarily a bad sign (except to wireless company shareholders). The reason mobile took off so well in the 3rd world was that their landline services were absolute crap. A landline could take 2 YEARS from ordering to install, and even that required bribes. Service was spotty, and outages were frequent. People simply had no other choice but to get a cellphone. Meanwhile, in North America, we were spoiled by the old ATT (USA) and Bell (Canada) monopolies. Expensive long distance? Yes, but local service worked like a tank. This was the result of a cosy relationship with politically controlled local utility regulators. They would allow monopoly and high profits, but came down like a ton of bricks if lots of people complained to legislators about lots of service outages. The result was a very functional landline systems that didn't drive subscribers into the arms of cellular.
July 17, 2007

Mark Goldberg said:

Broadband Baloney
Worthwhile reading the opinion piece in today's WSJ by FCC Commissioner Robert McDowell: Broadband Baloney -
[ link ]
July 24, 2007

Mike Steinke said:

...
Do you really believe that every man woman and newborn baby is carrying 1.3 cell phones in Europe? Of course not, those warped subscriber penetration rates are a typical consumer response to managing expensive roaming charges across different service providers. There are no roaming charges within Canada so consumers here don't need multiple cell phones to avoid those costs.

When I read the OECD study, I don't see how you come to the conclusion that Canadian medium volume users are amongst the most expensive in the world - it looks to me like Canada is even cheaper than the U.S.

Michael, it looks to me like you might have read that OECD report with some strong biases that led you to some unique negative conclusions.
July 25, 2007

Apoli said:

...
Mike, North America in general is lagging behind Europe and other continents, so yes you're correct that the US is just as bad or worse in some cases regarding broadband penetration and pricing as we are. More importantly than the semantics here is that we're both falling behind in this, to both countries long-term detriment.

I hold a slight bit more hope for us up here, given the differences in government, that we will wise up as a population (not from the corporate stand-point) and enact some change regarding the oligopoly we suffer under here in telecommunications...and please let the average person realize what net neutrality means to a democratic nation, it's the definition of democracy despite the telecom spin on the subject.
August 01, 2007

Fei said:

...
Mike, don't you realize from the statistic alone that this is just an average and not a literal translation of some "mobiles in country"/"population"? Having two mobile phones at home doesn't mean that you have a subscription on both. Also, there is no "roaming charges" within the Netherlands (with dutch operator), or within Norway (with norwegian operator), so what kinda argument is that?
And, as of Summer 2007, "roaming" in the EU isn't that bad anymore:
"The 2007 EU roaming regulation introduces the "Eurotariff", which sets limits on the prices mobile operators can charge for mobile calls made or received while abroad in a European Union country. Eurotariff rates will gradually decrease from 2007 to 2009." -- taken from [ link ]
And at last, Canada may not have extreme prices, but they have extreme contracts. For a reasonable contract, say, Roger-to-Roger bundle incl. 2 mobile phones, you pay $50 flat if you don't call any other mobile phone, BUT you're bound to contract for 3 years!!! Many operators here love the "if you don't use up your credit within the month, it's lost"-deal. In Europe, it's basically unheard of. You buy it, you keep it.

Getting back to the original post, based on real-life experience over mobile operators from both Europe and Canada, I can tell you I'd take the European solution anytime. It's ridiculous, the Canadian prices and the fees that the companies charge for every single little thing. The bundles are crap, and they make the users feel powerless in the wrath of their operators. They also make it darn complicated to sign up for a simple subscription, with asterisks and small lettered writing littered all over the place. You feel like you're walking into an obvious trap, but you have very limited options. Even the general investment in tele-technology is so backwards in Canada that the progressive companies doing bigtime business in Asia/Europe don't even bother coming here to launch their new products, because it's gonna be useless anyways without the infrastructure to support it. Even the iPhone would have been better off in Europe than in N-America (the only reason for this awkward technologically unbalanced launch is because Apple is an American company, never mind if they actually can use the 3G...). And that Canada fares better than their other North-American neighbors isn't really a realistic measure... it's like comparing yourself to the second worst kid in class.

August 09, 2007

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