Mobile wireless prices declined 2.6 per cent on average compared to 2021: Wall study
By Ahmad Hathout
The country’s lowest-priced mobile wireless plans in 2022 came from mobile virtual network operators, flanker brands of the incumbents or regional providers, which contributed to a 2.6 per cent decrease in that segment’s pricing compared to 2021, according to a new Innovation Canada price study released Friday.
The new study, which is based on eight talk and data service baskets, found the average MVNO price for unlimited talk and 2-4 GB of data, 5-6 GB of data, and 7-9 GB of data “is consistently lower than the average incumbent price.” MVNO prices, the study found, was “highly uniform” across the country.
While agreements for access to the mobile wireless network of the incumbents can be made voluntarily, as has been the case with carriers like PC Mobile and Petro-Can, the CRTC has ruled in 2021 that regional providers with spectrum and infrastructure should have mandatory access to those facilities to boost competition and lower prices. The regulator, which finalized the terms and conditions for the regime in October, is asking about the status of those negotiations.
The MVNOs studied only offered service up to the 10 to 19 GB data basket. In the baskets that both MVNOs and incumbents compete on, the MVNO average price was consistently lower than the average incumbent price, the study said.
The 15th annual study, prepared by Wall Communications and featuring international comparisons, also found that while the average mobile wireless prices from the regional providers were lower than the incumbents in the 2-4 GB, 20-49 GB, and 50-99 GB data bracket (the largest measured), they were higher in the lowest and rarer 450 voice minutes and 300 texts and the 5-6 GB bracket. Average prices in the mid- to higher-level baskets in Quebec, where Videotron is dominant, “are generally the lowest in the country,” it said.
The study found that the incumbents had higher average prices in the largest bracket than regional prices, except for Saskatchewan. But the incumbents had more price uniformity across the country, it noted.
Outside of the similarly-priced lowest bracket and the highest basket, which isn’t offered by the flankers, the average national flanker price is between about 8 per cent and 23 per cent lower than the average incumbent national price, the study said.
“Flanker prices are generally lower than Canada-wide average regional prices in 2022, in contrast to last year (where both Flankers and regionals offered the same basket in 2021, Flankers were higher priced 15 times and lower priced 13 times),” the study said.
Freedom Mobile, which is expected to be acquired by Videotron so Rogers can buy Shaw, had lower prices than the incumbents in the 2-4 GB and 20-49 GB data baskets by 21 and 39 per cent respectively, the study found. In the largest data bracket, Freedom was 5 per cent lower on average. Bragg’s Eastlink had lower prices than the incumbents in the 20-49 GB and 50-99 GB data offerings. While Videotron offered similar prices to the incumbents, its Fizz flanker brand was “often considerably lower than the incumbent average price.”
The study compared the prices to those offered in major cities in Australia, France, Germany, Italy, Japan, the United Kingdom, and the United States. It found that Canada, the U.S., and Japan tended to have the highest prices internationally, but Canada “generally performs favorably” compared to the U.S. and Japan.
But with the exception of one lower-tier basket, the study also found that the lowest international price is often less than half the Canadian price.
Fixed broadband prices
The study also found that, on average, fixed broadband prices either decreased or stayed constant in all seven baskets measured – ranging from 3-9 Mbps download to 500 Mbps and above. The largest decrease of 11 per cent was in the 16-40 Mbps bracket, with other decreases between 2 and 4 per cent, the study said.
There was high variability in the prices of the wholesale-based providers – such as TekSavvy – that the study said was due in part to “variability of wholesale prices in different regions.”
The study also observed the geographic concentration of the incumbent’s broadband flanker brands being in Ontario and Quebec. Prices for Videotron’s Fizz services “are always much lower than incumbent prices” by between 34 and 38 per cent in three service baskets that the flanker and the incumbents offer service, the study said.
Average prices in Quebec remained among the lowest in the nation, with Nova Scotia generally higher than others, it added.
Among surveyed countries, Canada ranked highest in prices in the download speed brackets of 41-100 Mbps, 251-500 Mbps, and 500 Mbps and above, the study found, adding European and U.S. prices are “generally considerably lower than Canadian prices.”
“While Canada’s prices in most baskets have fallen relative to 2021, Canada’s broadband service relative price ranking has remained fairly consistent since the study was first conducted in 2008,” it said.
The study comes two days after the CRTC launched its renewed proceeding on the wholesale internet framework, which citing higher prices in a similar ISED report from June 2022. It also comes after Innovation Canada finalized its new policy direction to the CRTC, which emphasized wholesale rate pricing.
“Increasing competition and improving affordability in the telecommunications sector is my top priority. Canadians pay too much for these essential services—full stop,” Innovation Minister Francois-Philippe Champagne said in a statement.
“I’m pleased to see that prices continue to decline for most wireless and Internet plans; however, there is still more work to do,” he added. “It’s clear from this study that competition is key to further reducing prices, and our government will continue to pursue the policies necessary to increase consumer choice for telecom services across Canada.”
Screenshot of Innovation Minister Francois-Philippe Champagne.
