CRTC report paints terrible telecom picture

06 Jul

The CRTC has released a report by Ottawa-based Wall Communications on the state of telecom service pricing in Canada. While some industry types are certain to spin some of the results positively, there’s no denying that the report is full of bad news.

First, though, the good – what little of it there is. The price of owning a landline telephone – does anyone still have one? – is relatively low in Canada, compared to four other countries looked at in the study. An average Canadian household that used 1,500 minutes a month, 20 per cent of which are long distance, along with two features such as voice mail and call display, paid about $52 a month in 2011. That’s higher than a similar household in the United Kingdom, but less than the United States, France, Japan and Australia, where the same service costs a whopping $76.

The other good news is that wireless prices have dropped over the past few years. Average users – those using 450 incoming and outgoing minutes per month, 10 per cent of which were long distance, as well as two optional features such as voice mail and call display, and 250 text messages per month – saw their bill come down from about $61 in 2008 to $51 in 2011. Same goes for heavier users, defined as 1,200 minutes per month (15 per cent long distance), a full set of optional features, 250 text messages and 1 gigabyte of data usage per month. There, the average bill went down from $112 to $98.

New carriers such as Wind and Mobilicity, while making up between zero and 3 per cent of the market depending on city, have been instrumental in bringing down those rates. Depending on usage category, average bills have decreased between 23 and 37 per cent.

One other nugget of good news is that Canada’s wireless networks are among the most advanced among the countries surveyed. Canadian and U.S. carriers have deployed fourth-generation LTE networks and have some of the highest advertised mobile speeds as a result. The downside of that is that the price of 1 GB of usage is high at $53, compared to $27, $39 and $31 in the U.K., France and Australia, respectively.

That’s about where the good news ends, though. When compared against the other countries, low-end mobile  prices “are considerably higher than rates found in all of the remaining surveyed foreign jurisdictions. Moreover, the $34 rate is significantly higher than the rates found in the U.K. (i.e., roughly twice the price).”

In the mid-range, Canada is middle of the pack, but on the high end – which, according to the definition, is any cellphone plan that includes data – “the average Canadian monthly rate of roughly $98 falls on the high-side of the average for the group of surveyed foreign jurisdictions as a whole. In this case, the Canadian… rate is well below the rates found in the U.S. and Japan, but well above those in the U.K., France and Australia.”

Things get even worse when it comes to broadband. Prices have moved upward in just about every one of the four tiers of usage tracked. Subscribers on low-end plans where speeds are less than 3 megabits have seen their bills go up from $33 in 2008 to $39 in 2011, while average plans (4 to 15 Mbps) climbed from $47 to $54. Prices on speeds between 16 and 40 Mbps dipped for a few years before climbing back up in 2011 to basically match 2008, at $68. At the highest level, with speeds in excess of 40 Mbps, there was a big price jump between 2010 and 2011 (Wall didn’t track these prices in prior years), from $78 to $94.

And the hits just keep on coming when the other countries are compared. On the lowest-speed tier, a worthwhile comparison can’t even be made because the U.K., Australia and France don’t even offer services below 3 Mbps. On the average mid-tier, Canada is middle of the pack, while prices for the higher tiers are higher. Here’s the killer:

A similar ranking is found in the case of the Level 4 broadband service basket. Canada’s average monthly price of roughly $94 is only lower than the rate measured for the U.S. Otherwise, it is considerably higher than the measured rates in the other four countries, significantly so in most cases. It is worth noting in this respect that all of the countries with lower rates in this case also offer higher average download speeds compared to Canada.

The study also pointed out a fact that I’ve hammered at again and again – that with the exception of Canada and Australia, almost all of the broadband plans studied in the other countries included unlimited data usage. According to the report, only about half of Canadian ISPs surveyed offer such plans. Even that is a little difficult to believe, given that indie ISPs – the likes of Teksavvy et al, who typically offer unlimited plans – weren’t covered by the study. Here in Ontario, neither of the two big incumbents offer unlimited.

Wall’s study also attempted to compare triple- and quad-play bundles of services and found Canada again came in on the high end of prices, but with the staggering variation of individual services offered – and not offered – by the various companies surveyed, it’s hard to know if this particular measure is worthwhile.

So, to summarize: Canadian wireless and broadband prices are high by international standards. In the case of broadband, those high prices are climbing even higher, which jibes with a recent report from PricewaterhouseCoopers. Canada and Australia are the only countries in the study where data caps are prevalent, yet Australia is an island where broadband capacity is limited by undersea cables while Canada is right next door to a good chunk of the entire world’s internet infrastructure.

What makes this all the more galling is that the report surveyed only a small snippet of countries, none of whom – with the possible exception of Japan – are considered leaders in broadband or wireless services. In most of the measures, Canada fares similarly to the United States, which itself fares poorly in many international comparisons. If the likes of South Korea, the Netherlands and the Scandinavian countries were included, Canada would go from looking bad to absolutely terrible.

Perhaps this is why the CRTC released the Wall report without any self-congratulatory fanfare, unlike last week’s declaration of victory in the throttling war (more on that here next week). The regulator even went so far as to attach a disclaimer to the report: “The views expressed in this document are solely those of Wall Communications Inc. and do not necessarily represent the views of the Canadian Radio-television and Telecommunications Commission or Industry Canada.”

Wouldn’t want to get those service providers all hot and bothered now, would we?


Posted by on July 6, 2012 in crtc, internet, telecommunications


4 responses to “CRTC report paints terrible telecom picture

  1. Denis

    July 6, 2012 at 12:43 pm

    CRTC= Captured Regulator of Telecommunications in Canada

    I’m surprised they published the report in the first place.

  2. mauriceabarry

    July 7, 2012 at 9:39 am

    There’s more. There is little evidence of efforts to bring 21st C communications to the the more rural parts of our country. While it might be easy to blame the communications companies for this, in fairness it must be pointed out that the current fee and administrative structures do not result in a valid business model for that expansion. That said, it is not hard to see the negative consequences this is having, the chief one being out-migration on behalf of younger people resulting in an ever-decreasing economic base in the affected areas. Simply put, the lack of adequate communications infrastructure in rural areas is directly causing the death of those same regions and, this, in turn, is changing the cultural and economic landscape. Instead of a far-flung ‘rural-ish’ population we used to be, we are rapidly becoming a collection of city-states. Sad, given the tremendous social and economic benefits our rural way of life have given us, especially when you realize that was was quite sustainable. Our governments appear to be dozing at the wheel on this one.

  3. Marc Venot

    July 7, 2012 at 12:47 pm

    I switched to fibre optic eight months ago. It’s working well (no more the terrible lag of adsl) except for the phone land line which has often a regular tic-tic in the background.

    For this kind of statistical article it would be good to be supplemented by graphic(s).

    • Garth

      July 7, 2012 at 5:27 pm

      The only fiber optic is true fiber to the home available in just over one percent of locations right now in Ontario.

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