Post Tagged with: "competition"

Industry Minister James Moore’s Commitment to Wireless Competition, Resolution Style

Whereas the 2013 OECD Communications Outlook ranked Canada among the ten most expensive countries for wireless services in virtually every category;

Whereas the Wall Report commissioned by Industry Canada and the CRTC found that Canadian prices are on the high side in nearly every category of wireless service;

Whereas the Canadian Wireless Telecommunications Association has argued that consumers would be willing to pay more for wireless services and Telus has said that given our geography Canada should be the most expensive country for the wireless services in the OECD;

Whereas Canada has long been one of the only developed economy countries with significant restrictions on telecom foreign investment and has been characterized as the most restrictive in the OECD;

Whereas Bell has consistently opposed or sought to delay changes to the foreign investment rules;

Whereas the government announced a telecom policy last year that opened the door to greater foreign investment and rules designed to facilitate new entrants to the marketplace;

Whereas Telus described that policy as “thoughtful and balanced”;

August 1, 2013 — 8 comments — News

Competition Not Contracts: The Real Reason Canadian Wireless Prices Are on the Rise

This week, Telus and Bell announced new wireless pricing plans based on two-year contracts (Rogers has said their plans will be released shortly). Those plans – particularly those from Telus which seems to be taking its suggestion that Canada should be the most expensive wireless country seriously – feature higher prices, which some claim are the product of the shift from three-year contracts to what is effectively a two-year maximum under the new CRTC wireless code. The narrative behind these cost increases is that consumers are amortizing the cost of their device over a shorter period of time and therefore can expect higher monthly fees. This argument is perfect for the carriers as they get to blame the CRTC (and by extension, the Competition Bureau, consumer groups and consumers themselves) with an “I told you so” for the increased prices. Yet the higher costs are not strictly a function of shorter contracts, but rather a product of Canada’s uncompetitive marketplace.

Many other countries have two-year contracts with cheaper rates and bigger device subsidies. This is because consumer price is not primarily a function of contract length or device cost, but rather marketplace competition. For example, Spain’s wireless pricing has been dropping in recent months as their four major carriers find consumers more aggressively shopping for better prices or cancelling their wireless services altogether. In response, all four Spanish carriers are dropping prices to stop the churn and attract new customers. For example, BGR reports that Yoigo (owned by Telstra) has offered free iPhone 5’s on two-year contracts for as little as 25 euros (C$34) per month (the article emphasizes how competition through innovative pricing has led to profit declines at incumbent carriers). The decline in price is illustrative of why it is competition, not “regulatory costs” or device subsidies, that are the key factor to consider.

[Update 7/27: A commentator below helpfully points out an inaccuracy in the BGR article since the Yoigo price was for phone only and not service. A fuller comparison of the Spanish offer is as follows: Yoigo for 24 months of 25 euro phone + 25 euro service (unlimited voice + 1 GB data) is C$1636.24. Add another 12 months of service for C$409.56. Total three year cost is $2047.80. Bell’s current offer on an iPhone 5 with the same voice and data for three years is $179.95 for the phone, $35 for the activation, and $70 per month of the service for 36 months. Total three year cost (not including taxes) is $2734.95.]

July 18, 2013 — 19 comments — News

Debate Over Wireless Competition in Canada Continues in the House of Commons and on the Air

The debate over the state of wireless competition in Canada continues to rage. Last week, I appeared on CBC’s The Current, as part of a 30 minute segment devoted to the wireless industry. The issue was also discussed during Question Period at the House of Commons, with Industry Minister Christian Paradis focusing on competition and consumers:

We want to enhance competition and investment in this country, and this is why we adopted this policy back in 2008 for the AWS spectrum. Let me say that the price went down by an average of 11% since then, and we will continue this way with the 700 megahertz spectrum. We launched consultation with the industry to make sure that we enhance competition and provide better choice and better rates for our consumers.

April 22, 2013 — Comments are Disabled — News, News Interviews, Podcasts, Tv / Radio

Is the Competition Bureau Ready to Take on Media Convergence?

Appeared in the Toronto Star on August 5, 2012 as Is The Competition Bureau Ready to Take on Media Convergence? Canadian broadcasters and broadcast distributors have pursued a convergence strategy for the past decade that has created one of the world’s most concentrated media markets. Four powerhouses – Bell Media, […]

August 7, 2012 — Comments are Disabled — Columns Archive

The Missing Copyright Docs, Pt 2: Competition Bureau Warned About Digital Lock Competition Concerns

Yesterday I posted on the government’s internal analysis on the constitutional risks associated with digital lock rules found in Bill C-11 including the constitutional warnings issued by the Department of Justice. The same document obtained under the Access to Information Act also notes that the Competition Bureau raised concerns about […]

June 26, 2012 — 1 comment — News