OECD Report Confirms What Canadians Have Long Suspected: Wireless Pricing Among Highest in the World
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Monday July 15, 2013
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.
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
M E said:
drive by commenter said:
What OECD said said:
Mike R said:
Ahmad Ramadan said:
Monday July 15, 2013