OTTAWA – Mobile wireless pricing is trending downwards in Canada and fixed broadband Internet prices have mostly increased since 2020, according to the latest edition of the government commissioned report Price Comparison Study of Telecommunications Services in Canada and with Foreign Jurisdictions.
The report, prepared by Wall Communications Inc., was released recently but is dated February 15, 2022, and covers pricing from 2021.
A note on methodology
The price comparison study was designed “to provide a detailed comparative price analysis of telecommunications services within Canada, as well as an international comparison (G7 + Australia),” it says.
Data was collected on mobile wireless, fixed line broadband Internet and mobile wireless Internet pricing in cities in Canada (Halifax, Montreal, Toronto, Winnipeg, Regina and Vancouver), Australia (Sydney), France (Paris), Germany (Berlin), Italy (Rome), Japan (Tokyo), the United Kingdom (London) and the United States (Boston, Kansas City, Minneapolis and Seattle).
Information gathered was then categorized into service baskets.
While this year’s report is the 14th annual edition, the data provided over the years is not necessarily comparable because there have been changes and additions made to the service baskets over the course of that time. For example, this year, Wall Communications re-formatted the Level 8 basket in mobile wireless (it went from including 50+ GB to 50-99 GB).
It should also be noted the methodology of the study aims to gather information on the lowest price a consumer might pay within each service basket – which means comparisons are not being drawn across identical service plans, but rather the lowest prices available within a given range of possible plans.
Critics have suggested this is a significant limitation of the report, arguing it leads to comparisons between “drastically different services”.
According to the report, using the range of service allows the researchers “to capture the non-uniform offerings of providers while still spanning the wide variance in plans offered domestically and internationally.” It also allows them “to collect the lowest regular price available to a consumer for service within a well-defined series of ranges.”
Mobile wireless
The service baskets used in the mobile wireless category are:
- Level 1 (450 voice minutes and 300 SMS/texts)
- Level 2 (1 GB of data usage per month, no talk or text)
- Level 3 (unlimited nationwide talk and text, and 2-4 GB of data)
- Level 4 (unlimited nationwide talk and text, and 5-6 GB of data)
- Level 5 (unlimited nationwide talk and text, and 7-9 GB of data)
- Level 7 (unlimited nationwide talk and text, and 20-49 GB of data)
- Level 8 (unlimited nationwide talk and text, and 50-99 GB of data)
The report shows there was an average decline of 15% year-over-year across all baskets in this category. “While longer term comprehensive historical perspectives are not possible (due to a major category reformatting in 2020), it appears that Canada is continuing to experience regular price declines every year,” the report says.
In all categories except for L4, regional providers Freedom, SaskTel, Xplore Mobile, Videotron and Eastlink implemented pricing that “typically resulted in average Canadian prices well below the average national price of incumbents, varying from 6% to 22% lower,” according to the report.
The greatest difference in price between incumbent and regional providers was noted to be in Ontario and B.C. where Freedom Mobile, which is currently in the process of being sold, offers service.
“Prices offered by Freedom were almost 70% lower (in L1) and averaged a more than 35% discount relative to incumbent prices in the five baskets where Freedom and one or more incumbents offered a service,” says the report.
The flanker brands of the incumbents also offered lower pricing – 7% to 36% lower in baskets where both a flanker and incumbent offers plans.
In terms of the (limited) data compiled internationally, the report says Canada, the U.S. and Japan have the highest prices of the countries considered.
Fixed broadband Internet
The service baskets for fixed broadband Internet are based on speed and include:
- Level 1 (3 to 9 Mbps)
- Level 2 (10 to 15 Mbps)
- Level 3 (16 to 40 Mbps)
- Level 4 (41 to 100 Mbps)
- Level 5 (101 to 250 Mbps)
- Level 6 (251 to 500 Mbps)
- Level 7 (over 500 Mbps)
The report shows that back in 2019, prices fell year-over-year across all service baskets used at the time (L1 to L6), and then increased in 2020, and increased again in all but one service basket (L2) in 2021. The highest increase reported for 2021 was 13% in the L5 basket. (It is worth noting in 2019 the CRTC decided to lower wholesale Internet prices – a decision which was never implemented and was ultimately reversed in 2021.)
Wholesale-based competitors (WBCs) had the lower price (by 8% to 18%) in four of the six service baskets where incumbents also offer service, according to the report. However, WBC prices are around 15% higher in the L6 and L7 baskets.
The report also considered incumbent flanker brands, which are available in Ontario and Quebec. “In all cases where both the incumbent primary and their flanker brands offer a service, the flanker price is lower than the incumbent price,” the report says. “Flanker prices also tend to be lower than the WBC prices, although the number of points of comparison is limited.”
Mobile Internet
The service baskets in the mobile Internet category are based on data per month and include:
- Level 1 (2 to 4 GB)
- Level 2 (5 to 10 GB)
- Level 3 (11 to 49 GB)
- Level 4 (50 to 99 GB)
Canadian mobile Internet prices decreased in L1 and L2 and increased in L3 in 2021 (2021 was the first year for L4).
“Prices charged by regional providers are much lower than incumbent average prices,” the report says. “On a national basis, regional provider prices were 25%, 21%, 18% and 37% lower than incumbent prices for L1, L2, L3 and L4 respectively. We note an exception to the general rule in Quebec where the regional provider prices are uniformly higher than the incumbent prices.”
Internationally, the report says Canadian and Japanese mobile Internet prices are high relative to the other countries considered.
For the full report, please click here.
