The CWTA Response

Yesterday I posted a link to the Canadian Wireless Telecommunications Association's letter to the editor responding to my recent text-message column.  The letter claims that my comment that "consumers pay more, but get less" is inaccurate.  Yet consider the claims made in the letter:

"recent figures from Merrill Lynch confirm that Canadians' wireless talk time continues to increase, and continued growth in wireless data usage now accounts for approximately 40 per cent of the average monthly cellphone bill."

In actual fact, the Merrill Lynch study says that 12.4 percent of revenues come from data in Canada.  By comparison, in the U.S. it is 18 percent, in the UK it is 25.5 percent, and in Japan it is 32 percent.  Canadians use far less data than consumers in most other developed countries because our prices are higher.

"the average revenue per user has remained relatively static."

The Merrill Lynch study finds that ARPU increased in Canada by 3.7 percent. Among developed countries, only Sweden had a higher increase, with 17 of 23 countries surveyed showing a decrease in ARPU (signs of a competitive market).  Moreover, Canada has the second highest ARPU in the world (only Ireland has higher) and Canada has by-far the highest wireless profit margin in the developed world.

None of it will come as a surprise to Canadian consumers who experience the effects of one of the world's least competitive wireless markets every month.  Indeed, it does not come as a surprise to Merrill Lynch either, who note in their report that "price competition has been concentrated in the mid-market and corporate segments more than at the entry level (where it would help to increase affordability for the entry-level consumer)."


  1. Lying liars and the lies they tell.
    If you don’t like someones argument invent statistics to back up your bogus claims. Telecoms have been doing this for years now. Shouldn’t that be illegal?

  2. David Farnes, CWTA says:


    You are correct. The figure associated with the data portion of the average cell phone bill in our response to your recent column was an error solely on the part of CWTA. And I do apologize for that.

    However, our message remains the same and is really quite simple: with the growth rates of both data consumption and minutes of use exceeding any increase in ARPU, Canadian wireless customers do not “pay more and get less”.

  3. Apologize in the Star
    Dear David Farnes,
    Will you also be apologizing in the Star for your error? 40% and 12.4% are quite significantly different and have an impact on the point you’re trying to make.

  4. To Mr Farnes
    “was an error solely on the part of CWTA”

    How can you publish such accusations without proof checking your data. Heck how can you simply say “the growth rates of both data consumption and minutes of use exceeding any increase in ARPU” without providing any data and explain WHY it should even increase because the growth rates are increasing, when it’s already higher then anywhere else.

    The basic of a magic trick is to move away the attention of a detail to something else, and make a non relevant detail seem like it affects the object of attention. This is what it looks to me. Now tell us how it is not the case.

  5. pathetic service
    Canada is a multi cultural country. There are lots of Asian and European citizens and being European I often laugh with my Asian friends about the pathetic and high priced mobile service offered here. But Canada is also the place where a loaf of bread cost $5.00 (I can buy 4 of those in my country for the same price). I guess mobile phones (and bread) are meant to be a luxury.

  6. Michael Hennessy
    Re Wireless Competition
    I would also strongly disagree with the statements about Canada being the least competitive wireless market in the world. Lots of argument to the contrary. Clearly voice revenue per minute from ML studies demonstrates we have a good deal overall. The CRTC recently noted that. OECD data consistently puts us ahead of the US for low/entry level users .There has been lots of criticism of data rates over the past year but at TELUS we have dropped our rates considerably.$15 dollar unlimited /text email is a good deal. So is the TELUS $30 unlimited email/text/surf. Additional value brands like Koodo also show increased price response.

    Often the problem is the studies we all cite need to be normalized better to take account of factors like calling party pays in Europe or the use of multiple SIM cards.That\’s one of the reasons ARPU looks higher in Canada. EU users have multiple accounts which inflates real penetration numbers and deflates ARPU.

    We can trade data forever to make our points and that\’s helpful if it leads to data sets we all trust but rhetoric like \”least competitive market\” does not contribute to better understanding on any side of the debate
    Michael Hennessy,TELUS

  7. Telus $15 unlimited?
    I almost believe you right there. $15 unlimited for text and email? That’s with a $30 base plan right? That’s up you to $45. But that’s before the network fees, who are around $7 or $8 I believe? So let’s say $52. Now you have to add taxes. If you want to take into account factors like “calling party pays in Europe or the use of multiple SIM cards.” Why not take into account network fees and taxes? Like you said, we can trade data forever, but you only seem to include data you want to include yourself.

    Now I’m just seeking to make things more clear, if I am missing something, and I might very well be, please point it out.

  8. I do not think so
    Dear Mr. Hennessy,

    Last year I went to Italy for a month. I borrowed a cellular phone from a friend, I bought a new SIM card for $5 dollars and started to use it. The month is passed and I still have money on that $5.00 dollar card (which wouldn’t expire because in Italy it is against the law: here anytime a card expires you are basically stealing the residual money on it). Do you have any service that resemble that?

  9. Re: Wireless Competition
    Mr. Michael Hennessy

    Perhaps the perception that the wireless market is less competitive comes from the fact that we pay some of the highest rates in the world, we are forced to sign ridiculous contracts which we are bound to, but you are not and that we are continuously assaulted by charges to access the system and to receive incoming calls (and now texts as you should be well aware).

    As I watch the big three automakers flounder and die because they refused to “compete” with newer rivals from the east, I do feel sad for those affected but the blame falls squarely on the corporate notion of entitlement that these multi-billion dollars organizations have.

    As I watch the wireless industry operate with the same feelings of entitlement, the same assumption that I should pay whatever is demanded for whatever service is provided, I can plainly see that your industry is ambling down the same path to oblivion. This outrages me, not because I care about perpetuating Bell, Rogers or Telus, but because they are squandering the prosperity of this nation. I work in IT and can plainly see that if my children wish to pursue a similar career path, they will be forced to leave Canada, because the fat bloated telecommunications companies will have forced any truly innovative companies to head south, or overseas to conduct business in a business friendly marketplace.

    D. Ramey
    Concerned Father and Patriot

  10. James MacFarlane says:

    Text cash cow
    In the time it takes you to say “hello” the cellphone network can send hundreds of text messages. Texting takes dramatically less network bandwidth than voice. Open the channel, squirt the data, disconnect.

    The new generation of cell users are comfortable using texting and use it often, which means they’re all that less likely to use a voice call instead.

    If you consider the economics of the situation, less voice traffic = less revenue. Greed insists that this revenue must go up, so charging for texting, or encouraging people into inclusive packages, makes sense.

    At the same time, encouraging more texting would reduce the need for expanded network capacity because voice is a bandwidth hog and text is not. If telcos are complaining that the increate in text traffic is the cause of them to expand their network capacity (and thus charge more for it), it’s a lie.

    I wish there could be telecom co-ops. I’d put my money there, that’s for certain.

  11. To add to James’ post. The $0.15 charge on a text message is equivalent to charge about half a million dollars for 1gig of data tranfer. How who’s milking who?

  12. North of 49 says:

    They’re awake!
    Kudos to you, Mr Geist, for provoking a response from two corporate PR spinners, Mr Hennessey and Mr Farnes. I believe you have them a little bit spooked. I imagine both the CWTA and Telus (and likely Rogers and Bell as well), have been reading your blog for some time now. Excellent work.

    Mr Hennessey, Mr Farnes: your statements of defense are not believable, as previous commenters have pointed out. Cherry-picking data and throwing up dubious claims (multiple SIMs? Really?), especially when they are presented without supporting links or evidence, is no longer a useful PR ploy. It is too easy for people — not just consumer advocates, but ordinary people — to fact-check your claims and expose your spin. Anyone with any acquaintance with any wireless user outside Canada, and there are many such Canadians, knows — not suspects, KNOWS — that we pay too much for too little. We can go on-line and compare prices from any wireless provider in the world, for Pete’s sake! Did you and your industry learn nothing from Rogers’ pricing for the iPhone data plan? In no time at all after the price structure was announced people were comparing it to AT&T’s prices in the USA, and crying foul.

    Don’t you get it? Up to now you and your PR departments have been able to fool enough of the people all of the time, and benefit from a somnolent regulator, to turn a fabulous profit. That happy (for you) situation can’t last. Instead of falling back to the last trench to maintain the status quo, you ought to be thinking ahead. The telecom which first switches from *punishing* its customers to *valuing* them will run away with the market.

  13. Unlimited surfing! Is that a joke?
    Correct me if I am wrong here but Tellus’ “unlimited surfing plan” is LIMITED to only handful of specific sites. And this according to their own website. How is that unlimited? It is same as paying for Ferrari and driving a Fiat or Lada. Now this may go into net neutrality issue but it has to, just to drive the point home on deceptive practices used by tel-companies in Canada.

    When you drop bogus system access fees (for which the class action lawsuit is brewing), present clean plans across all of the products you offer and when unlimited really means unlimited. Then we can talk about how good your service really is until then I am not going near your shop.

    You see I am looking to get a new phone that will support email and a few other services.

    But I don’t want the following: a locked phone, 3 year contract(no effing thanks if I like your service then pay as you go should keep me as your customer), limited-unlimited services (i.e. unlimited to 5 websites that are of no use to me for various reasons) . . . you get the picture.

    Sincerely, Potential Customer.

  14. PR people
    All the true facts in the world will not likely do a lick of difference to the likes of Mr. Farnes and his employers. Public relations deal with spinning the story until it favours their clients, which is exactly what they did here. They got caught and unfortunately you will not likely see a retraction to their statistics. They got their point out there, it was a lie, but they got it out there and that’s what PR does.

    So while those of us who follow and appreciate what Mr. Geist does, have a good idea of the whole truth, Joe Public is going to read the article and follow it blindly (and they were also the same people who were first in line for the iPhone).

    I’ve been following alot of this closely for the last few years (net neutrality, inflated wireless costs, unfair practices, collusion, etc), and it’s only getting worse, not better. Unfortunately Mr. Prentice and his office aren’t doing much about it. The CRTC hasn’t really done anything, and we are all left to just sit here, complain, and take it.

  15. A NEW VISION says:

    so what if we all decided to just NOT PAY FOR A MONTH IN PROTEST
    let them sqirm then

    and when they ask tell them your concerns
    Drastic times need drastic measures, and i think if even 30-40% of the :internet, home phone, and cell users did so, it would shock there finances ( all a corporation thinks about) bad enough to get the fraking hint.
    It is the ONLY WAY TO DEAL with them SHORT OF BURNING ALL THERE OFFICES DOWN( and do life in prison for it naaaa they aint worth that)

  16. PR's PWNED says:

    epic win michael. scared the suits into mass spin control.

  17. well said north
    “The telecom which first switches from *punishing* its customers to *valuing* them will run away with the market.”

    Once I phoned fido to complain about their policy to \”steal\” the residual money from an expired SIM card stating that in Europe is considered unethical.
    They answered me: “Sir you are not in Europe and fido priority right now is not customers satisfaction”.
    I’m pretty tired to be insulted by help-desk clerks on behalf of their company CEOs.
    I’m a software engineer who travels a lot and who is able to witness in person other countries businesses and there are no excuses for the high priced and pathetic service offered by the telecom Canadian oligopolies. Meanwhile I left fido for another carrier hoping that it will eventually get better and since I’m paying for a service I have all the right to demand for a better one.

  18. Canada wireless is a joke!
    Dear David Farnes and Michael Hennessy,

    Canadians are right when they say that Canada’s wireless is a joke.

    And here is why.

    I won’t talk about airtime rates, because there are WAY more ridiculous things in Canada wireless. I will talk about the cost to GET STARTED.

    I went to Europe. Three operators to choose from, all offer prepaid SIM cards. In a small shop, I paid 7 dollars, got a CD-sized thin cardboard box, put the SIM card into the phone. That’s it. I could receive and place calls right away.

    My aunt came to Canada. GSM here is essentially owned by Rogers (with Fido as subsidiary), thanks to Government of Canada and clueless CRTC. So, NO competition here. In Canada, JUST to GET STARTED, you pay $35 for an activation kit (tiny SIM card is in a HUGE box). [ link ] . Then you have to do the activation procedure… With this outrageous price of $35 for a SIM card, my aunt chose not to use her cell phone neither in Canada nor in USA. And she is not the only one of your potential customers – tourists who come to Canada.

    So, let’s compare. $35-$7 is $28, at 30 cents per minute [ link ] this difference in activation kit costs is equivalent to 93 minutes of airtime. This is a clear Activation Kit rip-off, because it is harder to find the activation kits on Fido website (had to search using Google to find the price of the kit), and airtime rates alone don’t tell much.

    Another rip-off: Fido and Rogers sell locked phones even to customers without term contracts. The tech support claims that locking is done as per agreement with the device manufacturers. Clearly a conspiracy for monopoly here, and Government of Canada won’t do anything. So, my next phone will be from a local shop that sells unlocked phones, for the same price CWTA members are selling locked ones. And if it is outlawed by your buddies in the Government of Canada with Bill C-61, it will be imported from a country that forbids locking phones.

    So, I fully agree that “fido priority right now is not customers satisfaction”. Neither is government’s.

  19. I can’t wait until competition comes from the spectrum sale.

    That is, unless they let Rogers buy them out again…

    I remember when I first got City Fido and it was $45 plus tax. Since Rogers bought them, they now charge SAF plus they just increased it to $50 a month. So now it’s around $65 a month with taxes.

    Thx CRTC!!!

  20. $141 for 5016 KB of data transfer…
    Around early July (or end of June), MSN messenger became available on my Pearl. So I decided to try it out a bit. I didn’t used it very much, but just a few times for kicks since I don’t have an Internet plan on my cellphone, I thought I wouldn’t use it for more then just test it a bit.

    Comes tonight, where I pick up my bill at my mom’s since the address change seemingly never worked with them (Telus).. And notice a very disgusting surprise. I had been charged $141~ for 5016 KB of “Internet Partout”. That’s roughly a bit more then $29 for each 1 MB of data, which there aren’t even a real way to track how much you used. I don’t remember the clause in the contract that mentionned this kind of fees for online use when I’m not with their plan. What is this? Are we still in the 1980s? How can 1MB cost twice what their Unlimited plan ask for. We’re already locked with 3 years contract, and I should pay $15 monthly because of one month I want try out some new feature?

    “There has been lots of criticism of data rates over the past year but at TELUS we have dropped our rates considerably.”

    OH REALLY?– You can’t discriminate people that don’t get your “plans” THAT much, that’s just plain fraud.