Few topics are more unanimous in Canada than the cost of wireless services. They’re that expensive. Why ? There, opinions differ. Because to get an idea, we would have to compare Canada to similar markets elsewhere in the world, but there is none… except perhaps one. And the result is likely to displease everyone.
One need only openly complain about the high cost of its wireless service to be told that in France, one can download up to 80 gigabytes of data per month for less than 25 euros (about $35). In Canada, it’s quite the opposite: 25 gigabytes of mobile data can cost $80 a month…
A societal choice?
In the industry, we find the comparison unfair. France has more inhabitants in a much smaller territory. The infrastructure is therefore less expensive to build, and its performance promises to be higher. It’s the same for the rest of Europe, Asia and even the United States. Canada is therefore incomparable.
Really ? Because on the other side of the world there is a market of similar size, where the population is spread about the same, and even where the economy is not very different from that of Canada. This is, of course, Australia.
If we compare Canadian and Australian wireless services, many may want to emigrate to the land of the didgeridoo. For 65 Australian dollars (C$61), you get no less than 200 gigabytes of mobile data these days, almost ten times what you get in Canada.
“Australia is often used as a comparison given its geography,” confirms the professor and director of the Canada Research Chair in Internet and Electronic Commerce Law at the University of Ottawa, Michael Geist. “The difference is noticeable. Prices are lower there and there is more competition. Australia is also open to foreign investment, recalls Michael Geist, while it is prohibited in the Canadian telecommunications sector.
The place of foreign players in Canadian wireless is an issue that the Canadian industry does not wish to reopen. Given the good profitability of Canadian suppliers, American or European operators would probably be easily seduced if they were allowed to set up in Canada.
We would undoubtedly see an effect on prices. There might be one on the quality of service too… Because the Canadian infrastructure is robust, recalls Desjardins Securities analyst Jérôme Dubreuil. “Canadian networks held up very well at the start of the pandemic, which was not the case everywhere, even in certain industrialized countries. It gives a clue as to the good quality and reliability of what is being done here. It must be said that the price is only one component of the choice of society that we make and that the quality of the networks is often taken for granted in these discussions. »
Fresher than fresh
Can we have good services and a more reasonable price at the same time? By forcing suppliers to be more transparent, why not. Ottawa was pleased at the end of January to have reached its target of reducing Canadians’ wireless bills by 25% compared to the reference year set at 2018 three months earlier than expected. At the same time, elsewhere in the world, the price of wireless services has also fallen and, in many cases, it has fallen more remarkably than what we have seen at home.
The federal government has limited its calculation to a few specific packages, omitting more lucrative elements that annoy many consumers and which are the cause of a good part of the complaints received from them each year by the authorities.
There are at least two: overage charges and roaming charges. Roaming charges are the amount people traveling outside of Canada pay to be able to use their phone abroad as if they were at home. They have increased since 2018.
Overage charges are imposed on customers who exceed the monthly limits set by their wireless plan. The appearance of “unlimited” mobile data plans with certain providers has still not led to their disappearance. In addition, suppliers were obliged to limit these costs to $50 per month and then to alert offending customers to avoid paying more. But these costs remain high.
These fees still represent a fairly significant source of income for providers who offer monthly packages that are poorly suited to the needs of their customers. Result: monthly revenue per subscriber, the main reference indicator in Canadian wireless, is on the rise, even if the federal government assures that prices have fallen faster in wireless than it thought possible in 2018.
It seems reasonable not to predict a federal election before 2025, given the situation in Parliament. There is little risk of being promised anytime soon a further reduction in costs by one or other of the federal parties.
But if that’s the case, targeting the elimination of these fees would be an excellent way not only to lower the wireless bill of Canadians, but also to do so in a proportion comparable to that observed in France, in Australia or elsewhere in the world.
Otherwise, the issue of foreign investment will inevitably come back to the table.