Internet and Wireless Service Costs Declining in Canada: Report

Posted by Jacob Serebrin

The average Canadian is paying less for cellphone and Internet services than they were a year ago, according to a study released on July 4.

The report, commissioned by Industry Canada and the CRTC, found that middle-tier packages, including voice, text, call display and voicemail, saw the steepest decline—around 13 per cent, from $51 to $45 a month, on average.

While plans that include data also dropped in price, they were only down five per cent, compared to last year, from $98 to $94 a month.

“These decreases continue the general downward trend in Canadian mobile service prices found in previous years' pricing studies,” according Wall Communications, the company that conducted the survey.

The survey looked at prices in five cities, Halifax, Montreal, Toronto, Regina and Vancouver. For a high-usage plan, including one gigabyte of data, Regina has the lowest prices—around $77 a month—compared to the Canadian average of $93.59. That’s also the steepest decline since last year, when people in Regina paid around the Canadian average.

While Regina doesn’t have any of the new entrants in the cellphone market—WIND, Mobilicity and Public Mobile—local incumbent Sasktel has introduced a low-cost unlimited plan.

The survey also found that Canadians are paying less for Intenet, with the cost of an “average” plan—with a download speed of 15 Mbps and 20 gigabytes of data—declining by around six per cent, from $54 to $51.

But the study’s authors warn that it’s difficult to compare the price of broadband Internet from year-to-year, due to the declining availability of low-speed services and the increasing number of providers offering higher speeds.

“Many of the service providers have introduced new higher speed services this year at prices very close and, in some cases, equal to pre-existing slower speed. Consequently, compared to last year, prices have generally declined for all broadband service baskets,” the survey says.

But even though prices are declining for broadband services—for speeds above 15 Mbps Canadians are still paying some of the highest prices in the world.

According to the survey, which also looked at the cost of similar services in Australia, France, Japan, the United Kingdom and the United States, only Americans are paying more for high-speed broadband. A plan with speeds between 16 and 40 Mbps, that includes 50 gigabytes of downloads, an average of $65 a month in Canada. A similar plan in the U.S. costs $99 a month—in purchasing power parity adjusted Canadian dollar—while in France that plan would cost $43.

Canadians are also paying high prices for mobile Internet. While prices dropped for data plans including two gigabytes, from $53 to $45, larger plans, including five gigabytes haven’t changed, on average. And those plans, which cost around $65, are more expensive than in the other countries surveyed. While Australians pay the least, around $35, people in the U.S. and the U.K. only pay a few dollars less than Canadians.

But Canadians aren’t the only ones paying lower rates for their cellphones than they used to. The other countries surveyed have seen similar declines.

“In general Canada remains middle of the pack in terms of how our telecom rates compare with five other surveyed countries and that this relative positioning is consistent with our findings in previous years' pricing studies," said Gerry Wall, president of Wall Communications.

But prices can vary from city to city, especially when it comes to the prices charged by new entrants.

A high-usage cellphone package, including data, from one of the incumbent carriers, Rogers, Telus and Bell, costs $95.03 in Vancouver, $94.36 in Toronto and $94.63 in Montreal. While a comparable plan from one of the new entrants costs $53.30 in Vancouver, $50.53 in Toronto and $69.95 in Montreal.

According to the survey, the higher price in Montreal is due to Quebec-only entrant, Videotron’s, pricing strategy, which provides higher discounts on bundled services.

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Jacob Serebrin

Jacob Serebrin

Jacob Serebrin is a freelance reporter based in Montreal. He specializes in covering small business and the business of tech. His work has appeared in publications including The Globe and Mail and The Toronto Star. Having previously covered higher education and politics, he started covering business almost by accident, but talking to passionate people about interesting things soon had him... more



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