The Canadian Radio-television and Telecommunications Commission yesterday released the latest Wall Communications Report comparing prices for wireline, wireless, and Internet services in Canada and with foreign countries. While some initial reports focused on the increased wireless pricing for light wireless users (150 minutes per month with no data or texting) that was attributed to the shift from three-year contracts to two-year contracts, the bigger story is that Canadian wireless pricing is ranked among the three most expensive countries in the G7 in every tier.
The report measures four different baskets of users and for every usage Canada is one of the three most expensive countries in the survey (other countries include the US, UK, France, Australia, Japan, Germany, and Italy).
As the chart demonstrates, Canada is the most expensive among all countries for Level 1, third most expensive for Levels 2 and 3, and second most expensive for Level 4.
The initial reports focused on the Level 1 data, noting that high prices may be the result of the new wireless code that limits contracts to two years. However, Level 1 is an increasingly small part of the market since fewer and fewer consumers use phones for a small amount voice only with no data or texting (and those that do are more likely to use one of the cheaper new entrants). Indeed, Level 1 likely excludes all smartphone users as the plan offers only 5 minutes of talk per day with no data and no texting. It therefore has little to do with amortizing the cost of expensive devices such as the iPhone. Moreover, the increase in pricing for this service actually demonstrates again why the market is uncompetitive, since two-year contracts or less are standard in most other parts of the world, yet the Canadian pricing is the highest in the category.
Last week, I wrote about the sorry state of wireless competition in Canada, noting that Bell, Telus, and Rogers all recently confirmed that they are reducing promotional activity and exercising greater “price discipline”. This latest report provides further confirmation that Canadian wireless prices remain high by global standards and unless the new competitive measures succeed, the incumbents have no intention of changing that any time soon.