By Mark Goldberg, a telecommunications consultant
An opinion piece in Monday’s Globe and Mail included a line that caught my eye. “A 2022 study found that Canada’s wireless rates were the second most expensive in the world – seven times more expensive than Australia, 25 times more expensive than France and Ireland and 1,000 times more expensive than Finland.”
Canadians complain about mobile prices, but does anyone in Canada actually believe that they are paying one thousand times more than what they would pay in Finland?
In fact, we don’t.
So how did the author, a university professor and academic director for University of Toronto’s Victoria College, make such a claim? The online version of the article links to a study from the widely discredited Rewheel/
Three years ago, a report signed by two dozen academics and economics experts detailed factual errors and logical inconsistencies in Rewheel’s report, and concluded Rewheel’s approach is fundamentally flawed. “The Rewheel story is easy to understand. It is also completely wrong… Rewheel’s rankings are of no value in comparing prices and assessing the level of competition in wireless markets… Rewheel’s assumptions are unsupported and create distorted rankings.”
Yet, the professor had no trouble writing that Canada’s wireless rates were 1,000 times more expensive than Finland. Last year, I was paying $85 per month for my plan (my prices have dropped considerably earlier this year). Does anyone think you can find a plan for less than 10 cents per month in Finland?
The article is also flawed when it states:
This spring, Industry Minister François-Philippe Champagne approved Rogers’s $26-billion takeover of Shaw, further consolidating its dominance in an already concentrated telecom space. Proponents of the deal, including Mr. Champagne, argued that it could “drive down prices across Canada,” despite reducing consumer choice in Alberta and B.C.
In fact, there has been no reduction in consumer choice in Alberta and British Columbia. The logo on cable and internet bills for Shaw subscribers may have changed to Rogers, but Rogers had never been a wireline services option in those provinces. Shaw’s wireless services were spun out to Quebecor (Videotron), a company that did not previously operate in Western Canada. Not only was there no reduction in consumer choice, but Freedom Mobile is now owned by a company that is willing and able to invest in more competitive technology.
Indeed, the finding by the Competition Tribunal, a judicial body, stated [pdf, 1.25MB]:
It bears underscoring that there will continue to be four strong competitors in the wireless markets in Alberta and British Columbia, namely, Bell, Telus, Rogers, and Videotron, just as there are today. Videotron’s entry into those markets will likely ensure that competition and innovation remain robust. … Moreover, instead of the two firms (Telus and Shaw) that offer bundled wireless and wireline products in those markets today, there will be at least three (Telus, Rogers, and Videotron).
The strengthening of Rogers’ position in Alberta and British Columbia, combined with the very significant competitive initiatives that Telus and Bell have been pursuing since the Merger was announced, will also likely contribute to an increased intensity of competition in those markets.
It was difficult for me to take the rest of the article seriously when the sections on telecom were so seriously flawed.
As students return to school this week, I hope they will be prepared to challenge instructors and lecturers. Carefully examine references and resources to test for credibility.
Cartt accepts commentary from informed observers of the telecommunications and broadcasting industry. The views reflected in these pieces do not necessarily reflect the views of Cartt. Pieces for consideration should be sent to editorial@cartt.ca.
