Canadian wireless prices down, still higher than most G7 countries

An annual snapshot of telecom services taken for the federal government shows a year-over-year decline in Canadian wireless prices but, as usual, concludes that most G7 countries had less expensive packages.

“While progress is being made, prices in Canada remain expensive compared to other nations,” the Department of Innovation, Science and Economic Development (ISED), which commissioned the study, said in a statement.

For example, Canadian plans with two gigabytes per month of data cost an average of $75.44 per month when the 2018 survey was conducted in June and July, down from $81.61 per month in 2017.

The study also compares higher and lower levels of service, but wireless plans with 2 GB of data are a good benchmark because they reflect the usage patterns of many Canadians.

The report found the average price in four midsized American cities was nearly 20 per cent lower than the Canadian average, at $61.26 for plans with 2 GB of data on a currency-adjusted basis.

Prices for 2 GB plans were even lower in Berlin ($45.80), Paris ($30.91), London ($26.56), and Rome ($21.11). Only Tokyo was more expensive at $81.52 — the only city studied that showed a year-over-year increase.

In Australia — the only non-G7 country covered by the annual study — the currency-adjusted price of $24.70 in Sydney was less than one-third the Canadian average price for a Level 4 service that includes 2 GB of data.

The study segmented the wireless market into six levels of service. Level 1 — with only talking time and no text or data — cost an average of $25.73, and Level 6  — feature-rich family plans with at least 10 GB of shared data — costing an average of $227.87 per month.

Wireless industry outlines study’s shortcomings

Key players in Canada’s wireless industry, however, argue there have been serious shortcomings with the annual study, prepared for the federal government since 2008.

The Canadian Wireless Telecommunications Association, which represents most of the country’s major carriers, said that it’s pleased that ISED recognizes that prices for wireless services are coming down in Canada.

“We remain concerned, however, that this study doesn’t provide an accurate comparison of wireless services between countries given it doesn’t take into account the many, many different promotions offered by Canada’s service providers as they vigorously compete for customers,” CWTA said in an email statement.

Similarly, a report from NERA Economic Consulting, commissioned by Telus Corp., which isn’t a CWTA member, argues that the official Canadian study is poorly designed and subject to incorrect interpretations.

“It really makes very little sense because it compares [the prices of] entirely different plans,” NERA managing director Christian Dippon said in an interview, prior to ISED’s release of this year’s report.

Dippon reached that conclusion after examining earlier reports prepared from 2008 through 2017 by either Wall or the Nordicity Group, using parameters set by either the government or the federal telecom regulator.

The NERA study proposes an alternative methodology that compares Canadian plans to a benchmark that purports to measure how much international providers would charge for the same level of service.

According to NERA, 89 of 111 Canadian mobile wireless plans in its sample were below their international benchmark.

The press secretary for ISED Minister Navdeep Bains said he wasn’t available to comment on the report Friday.

In a statement, Bains said: “We’re working hard to bring down the cost of cellphone plans. And while we’re making progress, our government remains focused on promoting greater competition in the telecom sector to drive down prices for Canadians, while making sure they can also benefit from the latest technology and high-quality services.”