In a comparison of cell phone costs in various countries, the Canadian Broadcasting Company (CBC) sought to discover why Canadians pay so much more for service than the rest of the world. Telecom industry research outfit, Rewheel, tracks cell phone costs around the world and agrees that Canadian consumers have disproportionately higher cell phone bills.
Citing his firsthand experience, Quebec resident Cam Moody stated, “I’m a snowbird, and [when] I get my service in Mexico from Telcel it costs 200 pesos, which is about $14 a month Canadian. I get three gigs of data and I get calls to Mexico, Canada and the United States. Why is Canada so expensive?” he asked.
The Canadian government has attempted to ask the same question and has some clues to help explain the high costs. According to the CBC research, the easy answer is that Canada is geographically large but supports a population that is sparsely dispersed in most of the country. However, whether one resides in a remote province or in metropolitan Toronto, odds are that service is provided by one of “The Big Three.”
Antonios Drossos, managing partner and researcher at Rewheel, noted that, “The only thing that makes economic sense when you have three players [each] having around one third of the market is to maintain the price levels at the same levels or even try to increase it. Canada didn’t used to be one of the most expensive countries when I started measuring about 10 years ago,” he added.
Anthony Lacavera, founder and former CEO of Wind Mobile, said that when his company attempted to enter the Canadian cell service market, it encountered swift resistance from the established providers. “That was a real threat to Bell, Telus and Rogers and so they went to the wall with the government, lobbying against our entry into the market,” he said. “I underestimated what a hurricane I was going to be going up against.”
Lacavera said Wind was further hampered by exorbitant roaming costs charged by the other carriers. “We built 1,564 cell sites,” he told the CBC. “We shared one tower successfully, over that entire time.” Lacavera also said that during this time, he noticed sites with two or more towers rather than one tower with multiple antennas. He identified this as a wasteful practice that passed costs along to the consumers.
Ben Klass, a researcher with the Canadian Media Concentration Project, commented that, “Countries that have similarly low population density such as the Scandinavian countries and in particular Australia … despite having those similar economics, the similarly situated countries nevertheless are offering service for substantially less, or for significantly better amounts of data.” He pointed to more government involvement and lower profit margins for the telecoms as differences between these countries and Canada.
In a 2021 report, the Canadian Radio-Television and Telecommunications Commission (CRTC) published a review of mobile wireless service in Canada and gathered results demonstrating that cell service in Canada was higher. Only one contributor, Telus, submitted information showing less dramatic results, according to the CBC. However, the CRTC concluded that Telus influenced their report when it “artificially lowered the average price” of its costs by only including a select number of its plans for analysis.
Reader Interactions