ISED: flanker brands prices falling, but not yet at 25% drop target

The federal government released its second quarterly check-in on wireless prices across Canada Thursday morning, as a follow up to the Liberal government’s plan to lower wireless prices 25 per cent by early 2022. Innovation, Science and Economic Development Canada (ISED) and consulting firm Wall Communications tracked the prices of wireless plans across the flanker brands of the big three telecoms — Rogers Communications Inc.’s Fido, Telus Corp.’s Koodo and BCE Inc.’s Virgin, focusing on plans offering between two and six gigabytes of data. That report shows that prices on wireless plans in the two to six gigabytes range have started to fall, although with prices decreasing by 10 per cent at most, no plans met the government’s reduction target yet. One exception is Quebec, where all the carriers’ two gigabyte at $35 had already met the government’s target, $37.50, before the government's initiative started. Across Canada (except for the territories, which were not measured, and Quebec), the three flanker brands shaved $5 off most of their plans, marking an eight to ten per cent price decrease from the beginning of the year, when sampling began. However, ISED earmarked most of these price reductions as promotional deals, rather than permanent changes. In all provinces (Quebec excluded), Telus brand Koodo was the only carrier to commit to permanent decreases, with a $5 drop in its four and six gigabyte plans. Even though they were described as promotional deals, Virgin and Fido’s prices still matched those of Koodo. In Quebec, prices were mostly stagnant, except in the five gigabyte category, where all carriers shed $5 off their plans, leaving prices just short of the government’s target. But according to Laura Tribe, executive director of communications access advocacy organization OpenMedia, price is only part of the question here, as the number of plans available with under six gigabytes has also shrunk. “We’re now looking at less choice and seeing people forced into higher data plans, or people are paying significantly more per gigabyte for these plans.” Tribe is critical of ISED’s approach to monitoring prices, particularly the decision to only consider plans on flanker brands (about one-third of the market), and only a subset of the plans they offer: Fido, Koodo and Virgin all offer wireless plans up to 10 gigabytes, but ISED is not considering prices beyond six gigabytes. She says that by zeroing in to the two to six gigabyte range, it appears that the government hasn’t factored in the actual demands of Canadian consumers. “The government has not measured how much data people actually need, nor has it measured how much data people will need in two years.” Furthermore, documents obtained by the Wire Report show that the government had been expecting a 25 per cent price decrease to happen organically by its deadline at the beginning of 2022. A statement from a Telus spokesperson emailed to The Wire Report noted that prices have been dropping for a few years now, including before the Trudeau government’s current initiative. “The efforts we’ve implemented to reduce prices are working. For example, according to a February 2020 report using data from Stats Canada, prices for cellular services declined by nearly 17% while Canada’s all-item Consumer Price index increased by 4.6 percent during the same period.” But by that point, Canadians may be seeking larger data plans, canceling out possible savings — for Tribe, that makes much of the two-year price-tracking exercise redundant. “It is frustrating to see the government set itself such an attainable target and to set the bar so low and so slow.”

ISED: flanker brands prices falling, but not yet at 25% drop target

Brief | October 29, 2020

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ISED: flanker brands prices falling, but not yet at 25% drop target

Brief | October 29, 2020

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