Cellular | Liberal claims about falling prices questioned

As the federal government touts measures to reduce the cost of Canadians’ cell phone bills, some say there is a disconnect between what consumers pay and the rhetoric surrounding lower prices.

On Thursday, Prime Minister Justin Trudeau aroused the anger of social media users when he published on the X platform that “we have halved the cost of cell phone plans, in particular by strengthening competition.”

“We’re also tackling unwanted charges so you can cancel a plan or upgrade to a less expensive plan at no extra cost,” he continued.

However, the message raised questions, particularly from consumers, who say they do not feel like they are paying less on their cell phone bills than five years ago.

Mr. Trudeau was promoting a plan in last week’s federal budget that said the government would amend the Telecommunications Act to help Canadians switch internet and phone providers.

The budget cites Statistics Canada data from December 2023 that shows cell phone plan costs have decreased by 50% since the same month in 2018.

Industry observers are somewhat divided over how much weight to give to the federal agency’s data, which is released monthly as part of its regular Consumer Price Index releases.

Some argue that this is clear evidence of competition in the market and that consumers are getting more bang for their buck through new offerings, such as larger data packages, international roaming benefits or mobile phone services. text voicemail.

“Just because you’re paying the same amount every month doesn’t mean there’s no drop in price,” argues telecommunications consultant Mark Goldberg, who likens it to “buying a Lamborghini for the price from a Honda Civic from five years ago.

Others argue that even if customers pay less per gigabyte of data, these deals could cause people to buy larger slices of data than necessary. Cellular services are also often bundled with television or the internet, meaning savings could come at the expense of buying more stuff.

Dwayne Winseck, a professor at Carleton University’s School of Journalism and Communication, said this reflects telecommunications’ ability to “present something as an advantage when in reality it’s not.”

“If you look at per gigabyte of data, prices are absolutely going down, there’s no doubt about it,” he says. But people are getting data that, in many cases, they may not even need and they have to pay for it whether they need it or not. Ultimately, even if per gigabyte data may be cheaper, who benefits? »

Changing settings

Mr. Winseck cited another metric that gives a different story: the average revenue per user reported by mobile phone companies.

According to the CRTC, telecommunications generated an average of $67.26 in mobile phone revenue per user during the second quarter of 2023, compared to $64.33 in the same quarter of 2016.

“(That’s) really, ultimately, the key measure here,” the professor says.

While Canada’s largest carriers often point to Statistics Canada data on the falling cost of cellular service, the federal government previously seemed less inclined to unreservedly rejoice in the figures.

For example, Industry Minister François-Philippe Champagne said in January that “while some progress has been made in reducing prices, Canadians are still paying too much and seeing too little competition.”

He urged carriers “to seriously consider customers rather than profits” following reports that some companies were planning to increase fares this year.

Michael Geist, Canada Research Chair in Internet and E-Commerce Law at the University of Ottawa, described a “disconnect in the data” that was highlighted by the response to the publication by Mr. Trudeau on social networks.

“It is true that the relative price of offers measured by Statistics Canada has decreased as operators offer larger data slices, promotions or shift more services towards “optional” ancillary fees,” he said. declared by email.

“While this means you get cheaper plans, carrier financials, measured by average revenue per user, tell us the truth. Canadians are spending more on wireless services than five years ago. Canadian prices are high compared to other countries. »

The budget promise called into question

Observers also question federal budget commitments intended to help reduce telecommunications costs in the future.

The document states that following Ottawa’s proposed changes to the Telecommunications Act, “the CRTC will prohibit companies from charging additional fees to people who change service providers.”

However, Goldberg said there are already protections in place that prevent a cell phone company from penalizing customers who switch providers.

These are contained in the Wireless Code. This mandatory code of conduct was created by the CRTC in 2013 and applies to all service providers.

The code states that if a customer cancels a contract before the end of the commitment period, the service provider must not charge the customer any fees or penalties other than a possible early cancellation fee.

These early cancellation fees are also not applicable if the service is canceled after 24 months.

“Since 2013, there have been no significant penalties for early termination of a contract,” explains Mr. Goldberg. The only fees that come into play are that if you have an agreement for your service provider to finance the device and you leave that service provider early, the remaining balance is due. »

Asked whether the government’s budget proposal was redundant, a Finance Ministry official acknowledged “there are already important protections in the Wireless Code.”

“These adjustments could complement or strengthen these protections,” mentioned Benoit Mayrand in an email.

“Regarding specific fees and implementation, Budget 2024 indicates that the CRTC will implement these changes following consultations on specific requirements. Confirmation of precise requirements and modifications will follow this process,” he explained.

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