GATINEAU – Canadian prices for wireline, wireless and Internet services are generally competitive when compared to other G7 countries and Australia, with the exception of entry level mobile wireless service and high-speed Internet, according to an annual report commissioned by Industry Canada and the CRTC.
Prepared by Ottawa’s Wall Communications, the 2014 update Price Comparisons of Wireline, Wireless and Internet Services in Canada and with Foreign Jurisdictions is an annual telecom services price comparison study that combines and averages wireline, mobile wireless, broadband Internet, and mobile Internet service rates, as well as bundles of these services along with basic digital TV services, and compares Canadian plans with other international jurisdictions.
Priced on average at $68.60 a month for 16–40 Mbps, 50 GB/month, and $86.46 a month for ≥ 40 Mbps, 75 GB/month, Canada’s broadband (fixed access) service is the most expensive of all the countries surveyed except the U.S. The average cost of entry level mobile wireless in Canada, at $35.70 per month, ranks as the highest of the seven other surveyed countries.
The report also found that the new wireless entrants continue to offer mobile wireless prices that are “significantly lower than those of the incumbents”, in some cases 49% less, and that their monthly data allowances, particularly in the higher volume use categories, exceed those of the incumbents.
For each individual service category, prices were measured for a series of defined "service baskets" designed to reflect typical Canadian low to high telecom service usage levels and features. There are two to four service baskets or "levels" defined for each individual service covered by the study. The lowest available advertised prices, as offered by the surveyed service providers included in the study, are used to measure the prices of each of the defined service baskets.
For Canada, the surveyed service providers include the incumbent telephone companies (e.g. Bell and Telus) and cable companies (e.g. Rogers, Shaw and Videotron), one reseller (Primus) and the wireless entrants (e.g., Wind, Mobilicity and Public Mobile). Prices were measured in Halifax, Montreal, Toronto, Regina and Vancouver, and aggregate Canada-wide prices were determined on weighted average basis.
For international comparison purposes, prices were also measured on the same basis and for the same set of service baskets for Australia, France, Germany, Italy, Japan, the United Kingdom (U.K.) and the United States (U.S.).
The new additions to this year's study include the addition of a fourth mobile wireless service basket, which includes 'unlimited' nationwide talk & text and 2 GB of data; a comparison of Canadian incumbent flanker brand and U.S. regional service provider mobile wireless service prices relative to incumbent mobile service prices in each of the two countries, respectively; a comparison of international mobile roaming rates to and from the U.S. available to Canadian and American consumers; and a comparison of broadband services and prices available in rural and remote areas using satellite and fixed wireless technologies in Canada and Australia, the U.K. and the U.S.
Wireline
Three service basket levels are considered in the case of wireline services: Level 1 includes low local and long distance call volumes, Level 2 includes average call volumes plus two features, and Level 3 is high call volumes plus a full set of features.
This year, the Canadian average Level 1 wireline service price increased by 10% relative to last year. In contrast, Canadian average Level 2 and 3 wireline service price declined relative to 2013 by 3% and 2%, respectively. Over the last five years, Level 1 and 2 wireline service prices have generally trended upwards, the former faster than the rate of inflation and the latter at roughly the annual average rate of inflation (i.e., just under 2%). On the other hand, the Level 3 price has declined slightly over the same period.
As in previous years' studies, Canadian wireline service prices generally compare favourably with those in the surveyed foreign countries, generally falling in the middle of the range of prices measured for those countries.
Mobile Wireless
Four service basket levels are considered in the case of mobile wireless services: Level 1 includes low local and long distance call volumes; Level 2 includes average call volumes plus two features and 300 texts; Level 3 includes high call volumes plus a full set of features, 300 texts and 1 GB of data usage per month; and Level 4, which was added for the first time this year, includes unlimited nationwide talk and text along with 2 GB of data.
This year, the Canadian average Level 1 mobile wireless price increased relative to 2013 by 16%, whereas the Level 2 price remained largely unchanged. In contrast, the Canadian average Level 3 price declined significantly, dropping from roughly $94 to $80 or by 15%. Over the last five years, Canadian Level 1 prices have increased slightly (roughly 5% overall), whereas both Level 2 and 3 prices have declined considerably – i.e., by roughly 15% and 27% in total, respectively. The Canadian average price of the Level 4 basket is roughly $93; however, since it is new to the study this year, there is no means to compare its rate of change relative to previous years.
The incumbents' flanker brand prices, (Bell Virgin, Bell Solo, Rogers Chatr, Rogers Fido and Telus Koodo), are also priced at a considerable discount to the incumbent primary brand services – i.e., for the Levels 1 through 4 mobile wireless service baskets, prices are 21%, 29%, 31% and 34% lower, respectively. Other than in the case of the Level 2 basket, the wireless entrants offer even greater discounts relative to the incumbents.
Canada's Level 1 mobile wireless service basket price is the highest of the group. In the case of the Level 2 and 3 baskets as well as the new Level 4 service basket, Canada ranks on the high side of the average for the group of surveyed countries. Canada's mobile wireless service price ranking this year is similar to previous years' studies.
A comparison of Canadian and U.S. cross-border roaming rates found the U.S. incumbents' average base (pay-as-you-go) roaming call and text rates in Canada were found to be lower than the Canadian incumbents' comparable roaming rates in the U.S., whereas the reverse was found to apply in the case of data roaming rates. The incumbents in both countries also offer a variety of roaming add-on packages that provide lower call, text and data roaming rates. When these plans are taken into account, Canada compares more favourably to the U.S. in the case of text roaming rates, but less favourably for call and data roaming rates. In addition, the wireless entrants in Canada offer far lower roaming rates than the Canadian incumbents, whereas the U.S. regional carriers offer either no roaming services in Canada whatsoever or very limited roaming services at best.
Broadband Internet
Four broadband Internet service baskets are included in the study, which are primarily defined on the basis of download speed: Level 1 covers service speeds of 3 Mbps or less, Level 2 covers 4 to 15 Mbps, Level 3 covers 16 to 40 Mbps and Level 4 covers services with speeds over 40 Mbps.
This year, Canadian average Level 1, 2, 3 and 4 broadband Internet prices increased relative to 2013 by 29%, 8%, 5% and 4%, respectively. The large increase in the Level 1 price is partly a reflection of the steadily declining availability of broadband services at or below 3 Mbps. Over the last five years, Canadian broadband prices have generally trended upwards. Increases in Level 2 and 3 prices have been very limited, whereas the increases have been more pronounced in the case of the Level 1 and 4 baskets – although in the latter case, average service speeds have also increased significantly.
Canadian broadband Internet service prices generally compare favourably with the other surveyed countries in the case of the lower-speed Level 1 and 2 broadband service baskets, but Canadian prices for the average higher-speed Level 3 and Level 4 baskets are higher than those in the surveyed countries included in the study, with the exception of the U.S. Canada's broadband service price ranking in this respect is similar to previous years' studies.
Mobile Internet
Two mobile Internet service baskets are included in the study: Level 1 covers plans providing 2 GB and Level 2 covers plans providing 5 GB of data usage per month.
This year, the Canadian average Level 1 and 2 mobile Internet service prices declined slightly relative to 2013, by 3% and 1%, respectively. Since 2010, the Level 1 price has declined by 20% in total, whereas relative to 2012, the first year the Level 2 mobile Internet service basket was included in the study, the Level 2 price has declined by 2% in total.
The wireless entrants continue to offer mobile Internet prices that are significantly lower than those of the incumbents – i.e., 24% less for Level 1 and 38% less for Level 2. The Level 1 and 2 differentials are somewhat smaller this year compared to last.
Canada's average Level 1 and 2 mobile Internet service prices fall on the high-side of the group of seven surveyed countries. On the other hand, Canadian advertised mobile Internet download speeds are among the highest of the surveyed countries (due to the availability of 4G Long-Term Evolution (LTE) mobile wireless services in Canada).
Broadband Internet Services in rural and remote areas
A comparison of residential rural and remote area broadband services available in Canada and the U.S., the U.K. and Australia is included in this study for the first time this year. In this respect, both satellite and fixed wireless broadband services have been taken into account. In both cases, the services were categorized according to the same Level 1 to 4 broadband service baskets, although there was only one instance of a surveyed service provider offering a broadband service satisfying the Level 4 speed requirements (i.e., by a fixed wireless service provider in the U.K.).
Satellite Services: Based on the pricing information collected from surveyed satellite service providers, Canadian satellite broadband Internet services compare favourably with the services available in the other three countries, even in view of the fact that many of the surveyed Canadian satellite services were intended for residential customers located in Canada's far north.
Fixed Wireless Services: Canadian fixed wireless broadband Internet services compare relatively less favourably with the services available in the other three countries. Based on the sample of surveyed fixed wireless service providers, on average, Canadian fixed wireless service speeds were found to be somewhat slower and prices higher than those of the other three surveyed jurisdictions.
Bundled Services
Three service bundles are considered in the study: Bundle 1 includes wireline, broadband Internet and mobile wireless services; Bundle 2 includes wireline, broadband Internet and basic digital TV services; and Bundle 3 includes all four of these services.
This year, the Canadian average Bundle 1, 2 and 3 prices increased slightly – i.e., by 4%, 3% and 3%, respectively. Over the course of the last five years, the average price for all three bundles has generally trended upwards. Bundles 1 and 3 have increased at roughly the rate of inflation over this period, whereas Bundle 2 has increased at twice that rate of inflation (i.e., close to 4% per year).
The average Canadian bundled service prices fall in the mid- to high-side of the group of countries surveyed for this study. While differences across countries in the underlying services included in the bundles, (especially broadband and digital TV services), can make bundled service comparisons somewhat tenuous, it is noteworthy that Canadian bundled service rates continue to compare very favourably to those in the U.S., where service pricing and provisioning practices are similar to those in Canada.
