Bad News Abounds for Canada’s Big Three Carriers

Mr. Burns sees pitchforks.

Let the public record show that Monday, September 22nd was a particularly bad news day for Canada’s incumbent carriers. In what I thought was a fairly effective one-two punch, the American financial and tech press managed to catch my eye not once but twice amidst the ongoing media circus otherwise known as the annual iPhone release.

If you missed it, I got your back.

Exhibit A:

Canadian Phone Prices Jump the Most in 30 Years (Bloomberg)

The cost of mobile and landline communications climbed 7.6 percent in August from a year earlier, more than three times general inflation, as the biggest phone companies pulled back on promotions and moved to shorter contract lengths.

The above quote is actually a bit misleading. Though the CRTC’s Wireless Code only mandated two-year terms from December 2nd, a quick search of Mobile Syrup archives confirms that TELUS, Bell and Rogers (in that order) had updated plans already in place by August, 2013.

Then there was that second price bump back in March of this year, which seemed to be related to the 700MHz spectrum auction a few months prior. Either the incumbents seized an opportunity to exploit WIND Mobile’s absence in that auction, or they just passed on the cost of their new spectrum to customers. Or perhaps some combination of both?

Exhibit B:

Fastest Mobile Networks: Canada (PC Mag)

There’s a dark side to Canadian wireless, however. These high-quality networks are very expensive to use. The government’s 2008-2012 attempt to create a fourth national wireless carrier has failed. Public Mobile is dead. Mobilicity is dying. Wind, which we tested in six cities, is hanging on, but can’t compete with LTE speeds, and doesn’t have enough spectrum or money to build an LTE network.

Even while they praise our fast data, our high prices and lack of competition at a national level are not overlooked.

It pretty much echoes my own opinions of the Big Three; in terms of raw speed I think their LTE data networks are generally pretty great, but the cost of using them is way out of whack with what I’ve experienced in Asia, Australia and Europe. According to PC Mag you can get a 4 GB monthly data bucket for only £18 in England—and everything’s expensive in England!

Oh, and just to kick ’em while they’re down… I’ve been sitting on this report from Canada’s Public Interest Advocacy Centre, published just after Labour Day:

PIAC releases backgrounder “Wireless Services in Canada: Why Canadians Deserve Better” (PIAC)

When the conversation is about what can be done to improve wireless service for Canadians, too often the incumbent response is that there is no problem to solve, and that Canadians are actually doing well. The evidence from the regulators, and from Canadians, doesn’t seem to support that.

The study sees the high cost of wireless service versus a relatively low rate of adoption as troubling. It also uses something called the Hirschman-Herfindahl Index (HHI) to classify our telecom industry as a “tight oligopoly”—defined as a market where the top four firms have more than 60% share. As you can imagine, the Big Three’s control of the Canadian market is significantly higher; this piece from The Toronto Star’s personal finance pages calls it at 95%.

Anyway, it’s very much worth having a look at PIAC’s 12-page report, which you can download as a PDF right here.