As you may have heard earlier this week, the Competition Bureau has revealed that the Big Three mobile providers (Bell, Rogers, and Telus) are systematically blocking new affordable options for Canadians. While this news may come as a shock to some, it is no secret that Canadians’ choice in mobile services has been limited to the Big Three incumbent players offerings for far too long.
For example, roaming fees in this country are out of control. On average, Canadians are paying nearly 260 per cent more to roam outside the country than their global counterparts. And data roaming fees are equally outrageous. 1MB of data in for any traveller in an OECD country would pay an average of $24.61. Compare that to what Icelandic mobile users pay when travelling outside the country: $4.42 per megabyte. Both of these figures comes from the most recent OECD report on international wireless costs, and suggests that when it comes to price-gouging roaming rates, Big Telecom is truly world class.
Compare all of this with U.S. carrier T-Mobile’s standard rate plan offering free and unlimited international roaming to customers travelling through 100 different countries, and the European Union’s legislation to abolish roaming fees altogether. So, if the fees are so high, and the price-gouging so extreme, what is keeping Canadians in these abusive relationships? The short answer: because they have no other choice. The long answer? Well…
In a marketplace as concentrated as Canada’s, telecom giants basically have no incentive to compete with one another. In fact, you can start to do all sorts of outrageous things! Remember back in March, when the Big Three launched an across the board price hike with no repercussions? Well, they sure got away with that. As Michael Geist rightly points out, this would have been shocking, had the Canadian Competition Bureau not predicted that this type of coordinated effort could occur in a formal submission to the CRTC in January.
Canada’s wireless market is one of the most concentrated in the world. A world-class team of researchers housed at Carleton University in Ottawa have been working away on the Canadian Media Concentration Research Project, and have taken a close look at our dysfunctional wireless market. While we encourage everyone to pore over their 75-page comprehensive report, we’ll highlight just some of the key takeaways here:
- No matter how you measure it, Canada’s wireless markets are “remarkably concentrated.” Whether you look Canada as a whole, individual provinces, or each of our nine biggest cities, there are very few options for Canadians outside the Big Three.
- When you assign Canada a score based on the price, speed, and penetration, and compare it with 34 other industrialized nations, we come in 19th place. By comparison, our neighbours south of the 49th parallel come in 10th.
- Although Canadians are in first place when it comes to the amount of time they spend on Facebook, Wikipedia, or streaming content online, we aren’t faring well when it comes to price — as our wireless prices are some of the most expensive in the industrialized world.
Even the Competition Bureau has been blunt about the Canadian situation. Michael Geist cites a particularly revealing statement from the Bureau:
In the Bureau’s view, mobile wireless markets in Canada are characterized by high concentration and very high barriers to entry and expansion. Furthermore, Canadian mobile wireless markets are characterized by other factors that, when combined with high concentration and very high barriers to entry and expansion, create a risk of coordinated interaction in these markets. Given these factors, the Bureau’s view is that incumbent service providers have market power in Canadian retail mobile wireless markets.
And in Geist rightly mentions, the term “market power” is defined as “the ability of a firm or firms to profitably maintain prices above competitive levels (or similarly restrict non-price dimensions of competition) for a significant period of time.”
So what’s the takeaway? Well, when it comes mobile phone and Internet choice, Canadians don’t have much.
We’ve written elsewhere about how companies like Wind Mobile and Mobilicity have struggled to develop a secure position as a viable alternative to the offerings of giant incumbents. But unless decision-makers at the Canadian Competition Bureau, the CRTC, or elected representatives like Industry Minister James Moore take bold action to open our networks and free them from Big Telecom’s control, Canadians will continue to face some of the highest prices in the industrialized world.
To let these decision-makers know where you stand, speak out today at https://UnblockCanada.ca and help unblock innovative new services and products today.
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