Public policy
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Wireless pricing in Canada – a broader look at the facts


Sugar_Maple_LeafIn its latest blog OpenMedia selectively pulls out a very few data points from the 2013 OECD report on wireless pricing in member countries including Canada to prove its long-standing – and just plain wrong – storyline about Canada having high wireless pricing.

Let’s dissect a key example they use in their blog.

The blog says Canadian wireless phone plans are expensive, ‘even for low-usage plans,’ implying that Canada fares better in the report in low-usage plans than we do in higher-usage plans. That’s misleading.  Really, when was the last time you made just 30 calls in a month that low-usage category looks at?

Fact is that Canadians use a lot of wireless. The higher-usage plans in the report are more typical of Canadian usage, and thus more relevant. Once you get into those plans our standing comes right down to about average pricing.

In the highest-usage tier a bunch of countries are clustered right in the middle. Canada finished in 21st spot, out of 34 countries, at around $74 for 900 calls and 2 GB of data in the month. But, if the Canadian price in that basket were to go down just $2 or $3 we’d drop five spots to finish in 16th spot – pushing ahead of countries like Turkey and Slovakia that have radically different economies than we do in Canada.

We do even better when you compare us to countries with more similar economies. The report finds Canada does better than U.S. in 12 of the 15 wireless pricing categories. The U.S. economy and geography are similar to Canada, so that’s an important comparison.

Taking that a step further, rather than comparing Canada to all OECD countries let’s look at the OECD data on just the G7 countries, which have more similar economies to Canada than other OECD countries.. Of the G7, we average the fourth out of the seven across the board – right in the middle – doing especially well in the high-usage smartphone categories typical of Canadian usage.

Check out the chart below for a comparison to G7 countries, using the OECD data.

Service plans

 

Don’t get me wrong – I’m not arguing that Canada has the cheapest wireless rates in the world – that would be no more factual than the oft-repeated mythology that our prices are the highest.

However, if you step back and look at the facts – all the facts – Canadians clearly pay rates that compare well across the developed world for some of the best wireless technology in the world.

Also, one key fact the report highlights that our critics like to ignore is that our good prices and great technology is possible because of the huge investments by TELUS and our competitors. Fact is we make more private investment in technology and infrastructure per capita than they do in any developed country in the world. We invest almost twice the average other countries invest, in fact. The only country that invests more is Australia, and that is taxpayer-funded where ours is private, not cost to taxpayers.

OECD report

When you consider our sparse population (we have only 12 subscribers per square km of network compared to 37 in the U.S. and 312 in the UK), huge geography, high investment, and outstanding technology, having comparable prices to other developed countries is good.

Report after report says the same thing. For example, the Wall report issued just this month, commissioned by the CRTC and Industry Canada, found a bundle of telecom services in Canada falls right in the middle of the countries they surveyed, and that we again did better than the U.S. Other reports reach similar conclusions. They all have their methodology issues we could pick apart, but the mass of evidence is conclusive.

 

Brent Johnston is Vice President, Wireless Solutions at TELUS.

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