Jackman-Atkinson: A step forward in the right direction

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Published on Thursday, July 17, 2014

By: Kate Jackman-Atkinson

myWestman.ca

Starting in the fall of 2012, the Canadian Radio-television and Telecommunication Commission (CRTC) began public consultations for a new wireless code to govern mobile phone companies and their contracts.

Canadians’ ideas were compiled, a draft code created and the public filed their comments. The finished version of the code came into effect late last year and it applies to new or renewed contracts as of Dec. 2, 2013 and as of June 3, 2015. The new code will apply to all contracts, regardless of when they were signed.

The new code marked a step forward for Canadian consumers, guaranteeing them clearer language in their contracts, the ability to unlock their phones on reasonable terms, shorter contracts, the ability to set a cap on additional fees and online tools that monitor usage and additional fees. These were all major concerns to Canadian cellular customers.

The code didn’t deal with Canadians’ two largest complaints about their cell phones, price and service.

Despite this, it looks as though in one area at least, some Canadians are seeing improvements.

On Monday, Ottawa-based economics research and consulting firm Wall Communications Inc. released a price comparison study.  The study looked at what Canadians pay for mobile phone service, landline phone service, internet service (both fixed and mobile) and bundles of the same services.  It also compared the prices Canadians pay to those paid by customers in the U.S., the U.K., France, Germany, Italy, Australia and Japan.

The report found that the price of low-volume, voice-only mobile services increased by 16 per cent relative to last year.  Many of these contracts come with a cheap or free phone and the contracts are priced to include the purchase of the phone.  With the maximum contract length being shortened by one year, the handset recovery component of the contract had to increase.

The good news for many cell phone users is that the price of higher volume voice, text and data service plans have fallen by 15 per cent relative to last year. Compared to five years ago, the cost of these high volume plans is 27 per cent lower and the price of the typical voice and text service plan is down 15 per cent.

The study also found that new entrants were typically charged between 10 and 50 per cent less than incumbents.  Sadly, the cost savings isn’t something most rural Canadians can enjoy. Only the incumbents have towers, and therefore service, beyond the country’s major urban centers.

Despite the good news about prices, Canadians’ rates are higher than the average of the seven surveyed countries. It has been a similar story in previous years. Our prices are going down, but so are everyone else’s.

The telecom industry is big business in Canada and it’s dominated by three key players, Rogers with 34 per cent of the market, Bell with 28 per cent and Telus with 28.2 per cent. The industry is worth about $19 billion and in the first quarter of 2014, there were 27.7 million mobile phone subscribers in Canada. Stats Can pegs Canada’s total population at 35.4 million people meaning that more than 78 per cent of all Canadians have a cell phone.

With three strong and equal competitors and a sparse population beyond our major centers, Canadians, especially those in rural areas, are likely to always face higher costs and poorer service compared to those who live in countries with a larger and more concentrated population.  Despite that, falling rates for higher volume services – the ones that are most essential to rural Manitobans – is good news. 

The rapid proliferation of smart phones and mobile internet has connected rural Manitobans to customers, suppliers, friends and family and has helped overcome some of the barriers we face living in a remote area.

This is good news and a sign we are on the right track.