OTTAWA – The value Canadians receive from their wireless services has been increasing every year, according to the new report Understanding the Increasing Value of Wireless Services for Canadians from PwC Canada and commissioned by the Canadian Wireless Telecommunications Association (CWTA).
“As wireless connectivity and smartphone technology has matured, consumers have derived more value from their wireless services, resulting in increased data consumption,” the report says.
The report highlights that between 2015 and 2019, “Canadians almost tripled their average data usage, growing at 27% compound annual growth rate (CAGR),” while the “average cost per 1 GB of data in Canada has dropped from almost $28 to just $10.”
Furthermore, “Average Revenue per User (ARPU) has remained relatively flat for wireless service providers, increasing at just 1.9% CAGR from $64 to $69 between 2015 and 2019.”
The PwC report also highlighted the impact of increased smartphone functionality on household expenses, finding that as wireless technology matured, smartphone value “cannibalized certain Canadian household expenditures.”
To come to this conclusion, “PwC analyzed average Canadian household wireless and wireless substituted categories (landline, photo, video, audio, postal and printed materials) expenditures from 2010 to 2019,” the report says.
The findings mean “that as the functionality of the modern smartphone increased it replaced many other products and services for consumers, saving Canadian households money.”
PwC further assessed the value Canadians receive from their wireless services by conducting a survey “to determine the consumer surplus received from their wireless services,” the report says. “The survey used a ‘Willingness to Accept’ approach that asked consumers how much money they would accept each month to give up access to their wireless services for an entire year.”
Nearly 60 per cent of survey respondents indicated they would not give up their smartphones for less than $150 per month while 17 per cent would not give theirs up for less than $2,500 per month. The average consumer surplus, according to PwC, is $948 per month.
“The value Canadians receive from their wireless services is due to innovations across hardware, software, and connectivity,” the PwC report says.
The report does acknowledge improvements in device quality and new applications but maintains innovations in these areas have been enabled by wireless network providers through faster speeds, lower latency and decreasing data prices.
“High quality wireless services are a key driver in enabling consumers to benefit from their smartphones and receive the consumer surplus they currently attribute to their wireless services. The value Canadians receive can be expected to continue increasing as Canada rolls out 5G technology that will enable the transition to the digital economy from the information economy,” according to the report.
“For most Canadians, smartphones and wireless services have become an integral part of their everyday lives,” said Robert Ghiz, president and CEO of CWTA, in a press release announcing the report’s findings.
“With this report we are now able to quantify how much value Canadians attribute to their mobile wireless services relative to what they pay for such services,” he said. “This report also shows how crucial continued investment in wireless networks is to delivering increasing value at lower prices.”
The full PwC report can be viewed here.
Charts borrowed from the report.
