Wireless prices down in Canada, but also everywhere else: report

Canadian mobile wireless data prices are falling precipitously, according to a new report from Finnish consulting company Rewheel — which also found Canada remains amongst the most expensive countries in the world. “While the Canadian median gigabyte price in smartphone plans fell during the second half of 2019,” Rewheel’s report summary reads, Canada’s competitiveness “further worsened” when compared to countries belonging to the European Union and the Organisation for Economic Co-operation and Development. The report follows an election campaign that saw the NDP and Liberals both promise to lower wireless prices if elected. In response, industry representatives emphasized that prices have been falling, and said that the emergence of no-data-overage plans this summer was evidence of a renewed competitive vigor in the marketplace. In August Telus Corp. CEO Darren Entwhistle, for instance, told analysts that the falling prices “significantly” reduced the “reasons for the government to intervene in our industry.” Rewheel’s report is the first international study to incorporate pricing reflecting the new plans. Prices in Canada undoubtedly fell from 2016 to 2018 and are even lower since the industry-wide adoption of those “unlimited” data plans -- which throttle or cap data rather than charge for overages -- this summer. But Rewheel’s report, which uses data from October 2019, shows that the dip in pricing is part of a global trend in data prices. Between 2014 and 2019, the median gigabyte price in OECD countries fell from €11.50 per gigabyte to €2 per gigabyte, while the median price in Canada has fallen from just above €18 in 2014 to €6.50 in 2019. In the report, titled Digital Fuel Monitor and released by Rewheel twice a year since 2014, the research and consulting outfit compares the wireless marketplaces of countries using price (in euros) per gigabyte of wireless data. According to the report, in Canada it costs consumers €6.50 for each gigabyte of data on 4G smartphone plans with at least a thousand minutes and 3 Mbps speeds. In the United States, the same gigabyte goes for €4.60. In the 28 states of the European Union, the median price for a gigabyte of data is €1.70. Despite Canadian prices coming down over the summer, Canada actually climbed the ranks in terms of how expensive data is compared to other countries, according to another metric in the study. “Canada was ranked as the country with the fourth highest median gigabyte price in April 2019. In October 2019 Canada became the second most expensive country,” a summary of the report reads. Rewheel analysed how many gigabytes a consumer could get in increments of five euros, from €5 up to €80 in EU and OECD countries. For example in Switzerland, a consumer can buy an unlimited data plan for €25, whereas in Canada €25 a month only nets you two GBs. The only country more expensive than Canada, in Rewheel’s analysis, is Greece. Research into comparative pricing landscapes in the telecom space has long been something of a battleground in Canada. Various studies that have shown Canadian prices as an expensive global outlier have had their credibility questioned by industry, who has argued that such reports ignore the high quality of Canadian networks and how much it costs to build them in such a large and sparsely-populated country. Companies and industry associations have also questioned the methodology of various studies, in some cases commissioning their own reports. Earlier this month, The Wire Report reported that Tefficient, a Swedish consulting company that has released a number of telecom price reports highlighting Canada as one of the highest-priced jurisdictions for such services, would no longer include Canada in its data sets. The reason for Canada’s exclusion from Tefficient reports, the company said, was mostly due to late reporting, but also due to lobbyist and industry pressure. Tefficient also decided to pull back from analysing Canadian telecoms because of “the workload created when lobbyists try to shoot down the credibility of the whole report because they don’t like to see Canada presented as an outlier,” wrote Tefficient’s founder Fredrik Jungermann earlier this month in an email to the Wire Report. “We have no business in Canada and have, unlike lobbyists, no agenda.” Earlier this year, Rewheel was the subject of a study commissioned by Telus and conducted by NERA Economic Consulting. That study accuses Rewheel of making an “apples-to-oranges comparison” that ignores the differences in quality between networks in different countries, and as such should be disregarded. In its report challenging the credibility of Rewheel’s study, NERA argues that Rewheel imagines a marketplace that differs markedly from the one that actually exists. “If consumers were to select mobile wireless plans based on monthly data allowances only, as assumed by Rewheel, then they would only purchase the plans offering the most data for a given budget,” NERA’s executive summary reads. “ Rather, NERA argues “there is no indication of a positive correlation between providers offering data rich plans and market share, thus refuting the assumption that consumers only care about data allowances.” NERA also argues Rewheel fails to account for the differing purchasing power across the various countries it looks at, among other criticisms. In an email and phone interviews Wednesday after the report’s release, Rewheel’s managing partner Antonios Drossos said that despite the report, the company chose not to change their methodology. Telus is not the first telecom who “tried to discredit our work, nor they will be the last,” Drossos wrote in an email to The Wire Report, pointing out that the Canadian Competition Bureau and telecom companies subscribe to Rewheel’s services. In a subsequent phone interview, Drossos said that the methodology of the report is “straightforward and consumer-based.” “If it smells like a fish, it’s probably a fish,” he said of the report’s characterization of the high price of Canadian wireless data. Asked if Rewheel had changed its approach or was more hesitant to wade into the Canadian pricing landscape since Tefficient’s withdrawal, Drossos simply wrote: “nope.” This edition of Rewheel’s Digital Fuel Monitor, the twelfth, is the first to incorporate 5G pricing into its analysis. The report tracked data from 1,759 4G LTE and 5G tariff plans offered by 140 operators and 53 mobile virtual network operators in Europe and across the OECD. The prices offered by the various telecom companies used in the report were collected entirely from public sources between Oct. 1 and Oct. 18. Rewheel says it incorporated every available commercial promotion in its comparisons. — With reporting by Michael Lee-Murphy at mleemurphy@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Wireless prices down in Canada, but also everywhere else: report

News | October 30, 2019

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Wireless prices down in Canada, but also everywhere else: report

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