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CRTC report paints terrible telecom picture


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CRTC report paints terrible telecom picture

06JUL

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The CRTC has released a report by Ottawa-based Wall Communications on the state of telecom service pricing in Canada. While some industry types are certain to spin some of the results positively, there’s no denying that the report is full of bad news.

First, though, the good – what little of it there is. The price of owning a landline telephone – does anyone still have one? – is relatively low in Canada, compared to four other countries looked at in the study. An average Canadian household that used 1,500 minutes a month, 20 per cent of which are long distance, along with two features such as voice mail and call display, paid about $52 a month in 2011. That’s higher than a similar household in the United Kingdom, but less than the United States, France, Japan and Australia, where the same service costs a whopping $76.

The other good news is that wireless prices have dropped over the past few years. Average users – those using 450 incoming and outgoing minutes per month, 10 per cent of which were long distance, as well as two optional features such as voice mail and call display, and 250 text messages per month – saw their bill come down from about $61 in 2008 to $51 in 2011. Same goes for heavier users, defined as 1,200 minutes per month (15 per cent long distance), a full set of optional features, 250 text messages and 1 gigabyte of data usage per month. There, the average bill went down from $112 to $98.

New carriers such as Wind and Mobilicity, while making up between zero and 3 per cent of the market depending on city, have been instrumental in bringing down those rates. Depending on usage category, average bills have decreased between 23 and 37 per cent.

One other nugget of good news is that Canada’s wireless networks are among the most advanced among the countries surveyed. Canadian and U.S. carriers have deployed fourth-generation LTE networks and have some of the highest advertised mobile speeds as a result. The downside of that is that the price of 1 GB of usage is high at $53, compared to $27, $39 and $31 in the U.K., France and Australia, respectively.

That’s about where the good news ends, though. When compared against the other countries, low-end mobile prices “are considerably higher than rates found in all of the remaining surveyed foreign jurisdictions. Moreover, the $34 rate is significantly higher than the rates found in the U.K. (i.e., roughly twice the price).”

In the mid-range, Canada is middle of the pack, but on the high end – which, according to the definition, is any cellphone plan that includes data – “the average Canadian monthly rate of roughly $98 falls on the high-side of the average for the group of surveyed foreign jurisdictions as a whole. In this case, the Canadian… rate is well below the rates found in the U.S. and Japan, but well above those in the U.K., France and Australia.”

Things get even worse when it comes to broadband. Prices have moved upward in just about every one of the four tiers of usage tracked. Subscribers on low-end plans where speeds are less than 3 megabits have seen their bills go up from $33 in 2008 to $39 in 2011, while average plans (4 to 15 Mbps) climbed from $47 to $54. Prices on speeds between 16 and 40 Mbps dipped for a few years before climbing back up in 2011 to basically match 2008, at $68. At the highest level, with speeds in excess of 40 Mbps, there was a big price jump between 2010 and 2011 (Wall didn’t track these prices in prior years), from $78 to $94.

And the hits just keep on coming when the other countries are compared. On the lowest-speed tier, a worthwhile comparison can’t even be made because the U.K., Australia and France don’t even offer services below 3 Mbps. On the average mid-tier, Canada is middle of the pack, while prices for the higher tiers are higher. Here’s the killer:

A similar ranking is found in the case of the Level 4 broadband service basket. Canada’s average monthly price of roughly $94 is only lower than the rate measured for the U.S. Otherwise, it is considerably higher than the measured rates in the other four countries, significantly so in most cases. It is worth noting in this respect that all of the countries with lower rates in this case also offer higher average download speeds compared to Canada.

The study also pointed out a fact that I’ve hammered at again and again – that with the exception of Canada and Australia, almost all of the broadband plans studied in the other countries included unlimited data usage. According to the report, only about half of Canadian ISPs surveyed offer such plans. Even that is a little difficult to believe, given that indie ISPs – the likes of Teksavvy et al, who typically offer unlimited plans – weren’t covered by the study. Here in Ontario, neither of the two big incumbents offer unlimited.

Wall’s study also attempted to compare triple- and quad-play bundles of services and found Canada again came in on the high end of prices, but with the staggering variation of individual services offered – and not offered – by the various companies surveyed, it’s hard to know if this particular measure is worthwhile.

So, to summarize: Canadian wireless and broadband prices are high by international standards. In the case of broadband, those high prices are climbing even higher, which jibes with a recent report from PricewaterhouseCoopers. Canada and Australia are the only countries in the study where data caps are prevalent, yet Australia is an island where broadband capacity is limited by undersea cables while Canada is right next door to a good chunk of the entire world’s internet infrastructure.

What makes this all the more galling is that the report surveyed only a small snippet of countries, none of whom – with the possible exception of Japan – are considered leaders in broadband or wireless services. In most of the measures, Canada fares similarly to the United States, which itself fares poorly in many international comparisons. If the likes of South Korea, the Netherlands and the Scandinavian countries were included, Canada would go from looking bad to absolutely terrible.

Perhaps this is why the CRTC released the Wall report without any self-congratulatory fanfare, unlike last week’s declaration of victory in the throttling war (more on that here next week). The regulator even went so far as to attach a disclaimer to the report: “The views expressed in this document are solely those of Wall Communications Inc. and do not necessarily represent the views of the Canadian Radio-television and Telecommunications Commission or Industry Canada.”

Wouldn’t want to get those service providers all hot and bothered now, would we?

http://wordsbynowak..../06/crtc-repor/

I bet somewhere Canada is used as a case study of oligopoly. Goddamn those prices for 40+Mbps are high. How much longer can Canadians knowingly allow themselves to be ripped off?

In other news, Rogers doesn't make enough money,

"To protect you from unexpected high charges, we currently cap the maximum monthly amount you can be charged for additional internet usage at $50 in addition to your Hi-Speed Internet plan's monthly service fee, modem rental fee (if applicable) and taxes. Effective August 16, 2012 this monthly limit will be increased to $100 in addition to your plan's monthly service fee, modem rental fee (if applicable) and taxes. If you exceed the monthly usage allowance included in your Hi-Speed Internet plan you will begin to see charges up to the new limit beginning on your first invoice on or after September 16, 2012. All other aspects of your Rogers service(s) will remain the same. Remember, you can track your internet usage online by signing into My Rogers at rogers.com/myinternetusage. For more information or questions please contact us in any of the ways listed on page 2 of this invoice. Thank you."
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Well, if you're going to compare Canadian network services - particularly cellular - on a pricing basis to a country like the UK, you should also do a study on the cost to maintain the two networks. The UK cellular network fits inside of BC, where companies here (who are even noted in the article as providing one of the most advanced networks) have to provide coverage across one of the largest land areas in the world.

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Well, if you're going to compare Canadian network services - particularly cellular - on a pricing basis to a country like the UK, you should also do a study on the cost to maintain the two networks. The UK cellular network fits inside of BC, where companies here (who are even noted in the article as providing one of the most advanced networks) have to provide coverage across one of the largest land areas in the world.

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The only similarity I can think of between Canada ans AUS is that the population is on the west and east coast, followed by nothingness in between.

Is that why costs are high as opposed to the US, UK, and other countries?

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It's still far greater than the area covered in the UK. Try looking up coverage maps for cellular companies in both countries.

EDIT: here's an example.

post-36372-0-89459200-1341596074_thumb.j

The UK coverage has the majority of Scotland and England, plus parts of Ireland depending on the carrier. That area equates to providing coverage in southern Ontario, southern Quebec and Atlantic Canada. Then there's BC, Alberta, Manitoba and the Territories to build your network onto still, and connect it all together and maintain.

Just saying, costs top maintain a network are far lower in Europe particularly due to geography alone.

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Right. Yet with the introduction of low-cost providers (Mobilicity and Wind) prices for the big three went down by what was it? 20-30 percent? You know another difference between Canada and UK and France? We don't have any competition.

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...

No, your plan is not any cheaper if you buy your handset outright.

No, North America is not one of the only places offering subsidized phones. What Canada is the only place in the developed world offering is three year contracts, though.

Galaxy S3 is 29 pounds on T-Mobile.

Samsung Galaxy S III

Save £72 on The Full Monty

  • Unlimited internet, texts and T-Mobile calls

  • 2000 minutes to other networks

Now £33 a month (24 months)

Phone cost £29

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If you want to talk about the big three in Canada, then you should also talk about the big five in the UK. 3, O2, Orange, T-Mobile and Vodafone all maintain their own networks and the other competing companies, like Virgin, use those five's infrastructure for their services.

Canada has carriers offering their own service, like SaskTel and MTS. Even Thunder Bay has it's own network. Wind and Mobiliticity are building their own networks and run their own frequencies, but we still have Virgin, PC Mobile and others that you can go to for service that aren't just a reseller for the big three but use their infrastructure.

There's limited coverage to small areas, but it's not like it's an easy area to connect to and maintain, adding to my argument about network costs.

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Your plan would be if you could choose to just use that new smartphone you bought only on wifi for internet and just select a voice plan. While it's not a direct comparison to cheaper initial plans offered for similar service outside of North America, it's a point to be made.

Wind recently offered $200 credits for people signing up (I think it was a Canada Day thing) and although they don't have "3-year contracts" they do have the requirement that you stick with them over a period of time to receive the full credit as it was doled out over a period of time. That's one way around a contract that carriers often use to entice new people.

It's the consumer's choice to enter into a contract and in some ways the consumer drove the contract idea in the first place. One carrier offered it to allow for the discounts before other options came into play like there are now and consumers were very happy to get a better phone for cheaper and sign to do so. To be competitive, the other carriers had to follow suit or lose business.

Does it benefit the carriers as well as the consumers to do so? Yes, but only as much as another carrier offering discounts over a period of time if you get a phone with them on 'no contract'.

I don't pretend to be knowledgeable of every option out there and there may be other areas where they give you a phone for cheap but don't have a contract or even a credit applied in portions over a term, but regardless each carrier recoups the cost of the handset out of the client somehow.

No one runs a business that gives things away for a large discount (the Galaxy III is worth $600-700 with T-Mobile UK offering it for about $80) without expecting to recoup those costs. If they do run a business that way, then they don't for very long.

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Thunder Bay provider is city owned. SaskTel is a crown corporation. MTS is the equivalent of Telus and Bell - a former provincial government monopoly.

There's limited coverage to small areas because there is no need for massive coverage. Yellowknife's population is half the territory. Not only that, I don't think they're keeping up in technology with the rest of the nation.

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In other words your plan would be cheaper if you chose less options? I agree.

You are again mixing apples and oranges as you did in the Wind thread that I made. When you sign a contract and get a subsidized phone, your plan is not discounted. Think of it as getting an almost free phone for singing a contract. DO NOT think of it as getting a cheaper plan because if you were to sign up with your own phone, your plan would remain the same. You are also punished financially for leaving (used to be pretty expensive, seems to have come down over the last decade).

With Wind, they offer you to discount your plan for twelve months. It is an offer that entirely depends on your staying with them, so to fault them for not giving you money is silly. The incentive is credit, not money. If you leave, there is no punishment. You are free to come and go.

I think it's cute that you blame the consumers to contracts. Contracts are ways for companies to ensure profits over a period of time regardless of service. There is a reason those things are long, in small writing, and full of words an average person never seen before. It is not for consumers, it never was. Business thrives on its offerings, when it can't do that, it gives incentives with a caveat of signing a contract.

If you don't claim to be knowledgeable, why do you argue? Check Germany, they also offer subsidized phones. Yes, each carrier recoups the costs, except our carriers recoup a lot more than others. I wonder if you were so argumentative during the System Access Fee discussions. You didn't like paying those because you liked accessing the services you pay for, did you? "Accessing the service is not the same as the service I pay for!" I kid I kid.

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Right. Yet with the introduction of low-cost providers (Mobilicity and Wind) prices for the big three went down by what was it? 20-30 percent? You know another difference between Canada and UK and France? We don't have any competition.

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