As MPs study the affordability of telecommunications services, the cost of telecommunications services continues to fall, helping to bring down the country’s inflation rate last month, according to Statistics Canada.
Consumers who signed up for a cell phone plan in February paid 26.5% less than the same month last year, according to Consumer Price Index (CPI) data ) published Tuesday.
This follows a year-over-year decline of 16.4% in January.
The federal agency says the year-over-year decline is due to lower prices for new plans and increased data allocations for some cellular service plans.
Statistics Canada also reports that Internet access prices in February fell 13.2% on an annual basis and 9.4% month-over-month, a decline it attributes to promotions offered by suppliers.
The agency’s telecommunications price calculations reflect two main factors: raw prices of services and the “quality difference,” says telecommunications consultant Mark Goldberg.
Price cuts in the National Inflation Report could indicate consumers are getting more bang for their buck through new offerings, such as larger data plans, international roaming benefits or voicemail services .
“They either get more for the same price, or they pay less for the same thing,” analyzes Mr. Goldberg, who compared this to “the opposite of reflation.”
“If you go to a grocery store and the box of cereal on the shelf costs $3.99, but last month it was a 500 gram box and this month it’s a 400 gram box […] you would say prices have increased by 25%. In this case, it’s the opposite,” he adds.
CPI data from Statistics Canada showed Canada’s overall annual inflation rate was 2.8 per cent last month, down from 2.9 per cent in January.
The federal agency said indexes for cell phone service and Internet access were among the factors responsible for the decline.
Packages for low consumption?
The February data is consistent with national trends frequently touted by the telecommunications industry. From January 2019 to January 2024, the cost of cellular services in Canada decreased by 47%, according to Statistics Canada data highlighted by the Canadian Telecommunications Association.
“While most goods and services have become more expensive, fierce competition in the telecommunications sector has led to a significant drop in the prices of cellular telephone and Internet access services,” commented the spokesperson for the telecommunications sector. association, Nick Kyonka, by email.
Telecommunications prices have received attention of late, with the issue currently being studied by the House of Commons industry committee.
Committee members sounded the alarm in January when Rogers Communications confirmed it was raising prices by an average of $5 for some wireless customers without a contract, and when some Bell Canada customers were informed that their bills wireless services would increase.
On Monday, the committee heard testimony from executives of Rogers, Bell and Telus who highlighted that prices for telephone and Internet were falling. They acknowledged, however, that some customers don’t feel like they’re paying less, while noting that Canadians’ data usage has increased in recent years.
“I just don’t see plans that cater to more low-consumption customers,” notes Mohammed Halabi, director and founder of MyBillsAreHigh.com, a company that helps customers negotiate with cell phone providers to save money. money.
While big companies offer plans that let customers pay less per gigabyte of data, they typically include “a huge amount of data that customers don’t necessarily need,” he points out.
“Where are the plans more suitable for people who only use five gigabytes? “, says Mr. Halabi.
He says customers increasingly have the opportunity to save on their mobile phone bills when bundled with other services such as TV or home internet.
“But then that pushes you into another service that you may not need and then you have to deal with significant discounts that expire, in some cases, after two years,” he says.
Mr. Goldberg believes it is important to recognize that a person who has been following the same package for years will not notice the effects measured by Statistics Canada. The data only takes into account changes to customers’ bills, including those who have changed operators or renegotiated their existing plan with their provider.
“You shouldn’t follow a pricing plan that’s two, three, or five years old,” he advises. If you’re still on the same plan as two years ago, you’re not getting enough data for the same amount of money. »