Canadian wireless and broadband prices are still higher than peer countries, despite best efforts.
James Moore, Telecom Warrior:
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It was something of a surprise to learn on Friday that Canadian Industry Minister James Moore will be leaving politics to focus on his family. Moore is stepping away, at least for now, to tend to the health of his two-year-old son, who is dealing with a rare bone disease.
It’s hard to wish anything but the best for the outgoing minister and his family. Moore, by virtue of his interest and passion in many of the areas covered by his portfolio, has been one of the better industry ministers in recent memory.
When it came to telecommunications services, he was certainly knowledgeable and involved, which can’t be said about too many people who have held the position.
Family issues aside, however, it may indeed be the perfect time to step aside with new data showing that passion and involvement alone haven’t been enough to get the results many Canadians have been hoping for.
Four key charts from the new report (links to PDF), by Ottawa-based consultancy Wall Communications, tell the story.
The first shows average wireless prices over the past five years, broken into four separate service baskets.
Level one includes just 150 voice minutes; level two is 450 minutes, a few features and 300 text messages; level three includes 1,200 minutes, a bunch of features, 300 texts and one gigabyte of data; and level four is comprised of unlimited calling and texting, full features and two gigabytes of data:
The prices of the lower tiers with no data option have clearly seen upticks. So too have 1 GB data plans, now generally considered to be entry level for smartphones. Wall has only been tracking the 2 GB plans for a few years, but the price of those appears to have declined over the past year.
The report says that, with the exception of the level one basket, wireless prices have generally trended downward since 2008, the first year Wall studied the market. Yet, as the chart above shows, three of the four baskets trended upward in 2015. This indicates a couple of things.
First, as I’ve written before, wireless prices have generally been declining around the world – but they’ve been doing so more slowly in Canada. Second, after a few years in which new wireless carriers such as Wind had some effect on the market, it looks like prices are back on the rise.
All that intervention by the government and the Canadian Radio-television and Telecommunications Commission, from encouraging new startups such as Wind to imposing the Wireless Code (which caps roaming fees and bans early cancellation fees after two years), has ultimately had little effect on overall service prices.
This is even more evident when Canadian prices are compared to peer countries, which include the United States, France, Germany, Australia, United Kingdom, Italy and Japan:
As per the chart, Canadian prices are the highest of the countries compared in level one, second highest in two categories and third highest in another two.
Even those results may be somewhat skewed in Canada’s favour since the Wall report doesn’t count T-Mobile, the third-largest U.S. wireless provider, in its results. T-Mobile has unequivocally been the driver of what is now a veritable price war in the United States, with many of the deals Americans are currently getting not showing up in the above chart.
Both T-Mobile and Sprint, for example, are offering customers unlimited plans – including data – for around $50 a month. AT&T, meanwhile, is allowing customers to roll over data they don’t use in one month to the next. These are deals most Canadians can only dream of.
Nevertheless, Canada continues to be among the most expensive country for wireless services in the G7, according to the Wall report.
Things also get interesting when it comes to broadband, the other main telecom service Canadians care about.
Wall again measured prices in service baskets: level one had a download speed of three megabits per second and 10 gigabytes of monthly usage; level two was up to 15 Mbps and 50 GB; level three was up to 40 Mbps and 100 GB; and level four was over 40 Mbps and 150 GB:
As per the chart, prices have trended upward steadily in every category, with a bit of fluctuation in the highest tier.
Things once again get interesting in the international comparison:
Almost none of the peer countries are even offering the lowest-level services anymore. At the higher levels that matter, Canada is considerably more expensive than most.
As the report puts it, “the measured prices for the European countries included in the study, including the U.K. and France and, since last year, Germany and Italy, have consistently been lower than those in Canada – in some cases, by a wide margin.”
None of this comes as a surprise to anyone who monitors the cost of wireless and broadband services in Canada and abroad. But in the context of the government’s role in how these prices figure into the bigger picture, there’s more to it than just simple academic debate.
Canadians routinely get singled out by reports from the likes of comScore for their supposedly robust usage of websites and video streaming, but Canadian businesses also routinely get hammered for lagging in their adoption of everything from e-commerce to cloud computing to general innovation.
Companies often cite the high costs of new technologies as reasons for not adopting them quickly – and that includes telecommunications, or the pipes that connect all those technologies.
It’s the Industry Minister’s job to make it as easy as possible for Canadians to compete against their international peers. If the Wall report shows anything, it’s that the Harper government has failed to do that on a digital level. Despite the best of intentions, the government hasn’t lowered the cost of that essential plumbing.
James Moore will forever be known – and appreciated in some quarters – as the minister who nobly went to war with Canada’s telecom companies. Unfortunately, as the data that details his legacy shows, it’s a battle he obviously lost.