(Toronto) Telecom industry watchers are hopeful that prices for phone and internet services in Canada will continue to fall, but point out that there is still a long way to go when it comes to affordability in this sector in the country .
Consumers paid 14.7% less for cellular services compared to the same month last year, after an 8.2% decline was seen in May, Statistics Canada said Tuesday in its inflation report for the month of June.
Overall, the cost of telephone services fell 11.1% in June compared to the same month last year. The federal agency attributed the relief in phone bills to both lower prices for cellular data plans and promotional prices.
The data is consistent with trends showing that the costs of telecommunications services in Canada have fallen in recent years, said Gerry Wall, whose company Wall Communications publishes an annual report comparing prices for cellular and internet services in Canada with those of other countries.
“Technology is enabling improvements in spectrum utilization, in the way networks are managed, in network efficiency, and so that’s probably one of the biggest causes of lower prices,” Wall said.
He added that the arrival of Quebecor-owned Videotron in the national market through its acquisition of Freedom Mobile from Shaw Communications could accelerate these declines. The transaction with Shaw was a regulatory requirement imposed on Rogers Communications for its acquisition of Shaw in April, to assuage competition concerns surrounding the merger.
Some observers see a degree of complacency in the Canadian market when it comes to price competition, Wall said. “I think having a fourth player, which is quite rare […], could lead to further price declines. »
Prices for internet access services fell 3.2% in June year-over-year, after rising 1.0% in May, according to Statistics Canada. Month-over-month, prices were down 5.0%, which was the biggest one-month drop since February 2019.
This was mainly due to promotions in Ontario and lower prices in Quebec, the federal agency explained.
“The recent price cuts are the latest manifestation of a multi-year downward price trend in the Canadian wireless market and are a sign of the continued vigorous competition in the Canadian wireless market,” Canadian Telecommunications Association spokesperson Nick Kyonka said in a statement.
He pointed out that cellular service costs have fallen by 33.3% over the past three years, according to Statistics Canada data.
Kyonka added that the industry is watching the effects of Freedom Mobile’s new ownership on price trends.
Freedom announced in May that it would offer a $50 monthly plan that includes unlimited talk and text, plus 40 gigabytes of data. As part of the conditions imposed in March by the Minister of Industry, François-Philippe Champagne, Videotron must offer packages at least 20% lower than those of its competitors.
Always among the most expensive
But the latest Wall Communications report, released in February and prepared for Innovation, Science and Economic Development Canada, found that Canada still had some of the highest prices in the world for cellphone and broadband services in 2022.
“Our rates are still astronomical compared to what people pay in other countries,” said David Soberman, professor of marketing at the University of Toronto’s Rotman School of Management.
Even though we have seen a 15% drop in the actual cost we pay for mobile telecommunications, it is still significantly higher than what is paid in other countries.
David Soberman, professor of marketing at the University of Toronto’s Rotman School of Management
Although he claimed the Rogers-Shaw deal paved the way for Freedom Mobile to emerge as the fourth national carrier with mandated lower prices, Soberman wondered if its presence would outweigh the negative effects of increased concentration.
“The industry has come under intense scrutiny over the past year, particularly in the wake of the Rogers-Shaw merger, so I suspect companies are trying to offer slightly more attractive pricing,” he said.
“We haven’t really increased the number of competitors. It’s just a bit of a chair rearrangement, but that might explain why we’re seeing somewhat more attractive pricing when it comes to mobile phone costs. »
Laura Tribe, chief executive of OpenMedia, an advocacy organization that promotes internet affordability and accessibility, pointed out that many consumers, trapped in their bundle, do not feel financial relief.
” [Les données disent que] somewhere, on average, people are paying less, and I think for many users it’s actually quite frustrating to hear this when they don’t see this on their own bills,” Ms.me tribe.
“There are a lot of different lived experiences and that may not necessarily be reflected in the telecom leaders’ celebrations. »
Although she considers the June figures a step in the right direction, Ms.me Tribe pointed out that telecommunications prices in Canada are still falling more slowly than in other countries.
“Average revenue per user is increasing for these companies and their profits continue to increase,” she noted. So I think that speaks more to the fact that it’s getting cheaper to provide mobile phone services than that we’re actually getting a good price. »