Telecom prices down, household spending up: CRTC

Prices for communications services are on a downward trend, according to new data from the CRTC, but spending on those goods are also on the rise. Those services are made up of mobile wireless (with unlimited voice and SMS and 5 Gb of data), internet (at 25 Mbps of download speed, and 3 Mbps of upload speed), basic television and basic landline phones, whose prices have fallen 11 per cent from 2016 to 2018. The country-wide average for those basket of plans in 2016 was $215.39, $208.86 in 2017 and $190.98 in 2018. The data on falling telecoms pricing comes in the latest iteration of the CRTC’s Communications Monitoring Report, released on Thursday. In wireless, prices were down by an average 28 per cent across four packages analyzed, with some larger data packages down by as much as 35 per cent in the same period, from $78.36 to $51.05. While the prices are falling for both internet and wireless data, Canadians are spending more on their overall communications services, the report points out. “While prices have been trending downwards, Canadians’ appetite for the latest mobile devices, more data and faster broadband speeds are contributing to a general increase in their communications bills,” the CRTC said in a press release. The last few years has seen a competitive intensity amongst the country’s biggest telecom providers, as they compete to offer more data for relatively lower prices. Back in 2017, when Shaw Communications Inc.’s wireless brand Freedom launched its “Big Gig” -- a base plan of $50 for 10 GB -- a number of other providers had responded. The company’s president Brad Shaw said on a quarterly earnings call earlier this year that Shaw’s introduction of the Big Gig plan had “permanently changed the Canadian wireless industry,” and took credit for cheaper data across the board. That continued when the Big Three were forced to offer more data for their "low-cost" data options after Freedom undercut the bigger players' original low-cost data proposals. Last year also saw an expansion to all provinces of BCE Inc.'s Lucky Mobile, a low-cost flanker brand with a focus on the prepaid segment, and the launch of Fizz Mobile, Quebecor Inc.'s similar low-cost offer. Between 2013 and 2017, average monthly household spending on mobile service increased from $78.92 to $101. Average monthly household spending on internet services across the same timeframe increased from $40.67 in 2013 to $54.17 in 2017, while landline prices dropped from $35.58 to $25.25, and television costs dropped slightly from $56.58 to $52.58 in those years, as more people use mobile phones instead of landlines, and more people are using more data-intensive applications like video streaming on both their internet and wireless devices. All together, the poorest 20 per cent of households -- those making less than $32,914 a year -- spent 9.1 per cent of their yearly income on communications services, or $1,806. The richest 20 percent -- households making more than $132,809 a year -- spent just 1.8 per cent of their annual income on communications, amounting to an average of $3,809. For both urban and rural households the most expensive province for communications services is Newfoundland and Labrador, where households spend an average of $274.83 a month in urban areas and $277.75 in rural communities. The cheapest is Quebec, where households spend an average of $181.83 across all communications services in urban areas and $199.83 in rural areas.

Telecom prices down, household spending up: CRTC

Brief | August 9, 2019

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Telecom prices down, household spending up: CRTC

Brief | August 9, 2019

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