Wirelessnorth.ca

Covering The Great Wireless North
  • Home
  • About
  • Canada’s Digital Economy
  • Canada’s 2008 Spectrum Auction
  • Submit a story

August 27th, 2010It’s 2010 and Canadians pay the highest cell phone bills in the world

And why that's a bad thing

Posted by Editor in Canada 3.0, Carriers, competition

As of 2010, Canadians pay the highest mobile bills in the entire world. Released earlier this summer, WirelessNorth.ca got our hands on the latest global telecom report from BofA Merril Lynch. The report itself (with data from Q1 2010) is a blockbuster, wealth of information on wireless carriers around the world and we’d encourage you, and especially the good folks at Industry Canada to take a look.

Surveying more that 50 developed and developing countries where information is available, one country comes out on top when it comes to the most revenue extracted per subscriber on a monthly basis. And that country is of course Canada. What you are looking at here are the world rankings of mobile ARPU (Average Revenue per User). To you and me ARPU is your monthly bill, before GST/PST/HST etc. (through taxes and high spectrum license fees, our government is culprit here too)

This data is total bill including both voice and data. Canada does not have the highest proportion of data to voice charges though data usage in Canada is growing fast (we’re finally catching up after a late roll-out of 3G compared to many countries). Interestingly, Canadians are estimate to pay slightly less per minute of voice (10 cents vs 11 cents) on average than our nearest neightbour the U.S.. What is really driving bills in Canada over the top are the egregious fees like system access fees (the fees many plans still pay whether you access the system or not in a month), and especially “value pack” fees like 15$ a month for the luxury of call display and handful of voice mails.

Now don’t get us wrong. We at WirelessNorth.ca are ardent technophiles and capitalists. We’d love to see every Canadian tech company besting the world at making money and being successful. But telecom itself is a special case. There are enormous positive economic externalities to every other sector of the economy that come from having ubiquitous, high quality and affordable access to telecommunication services.

Wireless subscriptions are nothing less than the basic infrastructure, the plumbing, roads and bridges that drive the digital economy. And this is exactly where high, unaffordable-to-many wireless services will hurt Canadians and hurt the rest of Canada’s innovation economy:

While we’ve seen a ton of improvement in wireless services over the last few years, we still suck at penetration. High costs of both basic and advanced services are keeping many Canadians un-connected. Taking one more look at the data, we can scale our USD ARPU data by relative USD GDP per capita to get a better perspective on shape of the demand curve for mobile services:

What you see above is that as average affordability improves, penetration increases significantly. Countries with perhaps poorer land-line telecom tend to cluster above the curve (less alternatives to wireless) and developed countries below. It’s interesting to see the U.S. with just slightly better affordability and significantly higher penetration.

One final comment is that there are many countries with similar or worse relative affordability than Canada that have better adoption. These gaps could indicate that other factors like digital literacy are also a factor.

So what have Canadian Carriers been doing with all this excess revenue? One thing is reinvesting it in marketing (not so helpful) by launching a barrage of new national flwanker brands. Another is reinvesting in networks (more helpful). Canada now boast several of the fastest 3G+ networks in the world (faster than even the so-called 4G networks in the U.S.).

What hasn’t changed are Canadian Carrier’s world-leading 3 year contract lengths. But, of late we are seeing evidence of price wars for new client acquisition with more and more aggressive discounts on high-end phone subsidies (very helpful, death to crappy feature phones – so long as you do the math and the teaser pricing followed by 3 years of contract pricing don’t bankrupt you faster than a US homeowner).

This fall, the new entrant carriers are finally hitting full stream, so consumers could benefit if we see an accelerated price war. But even those new entrants have some very expensive spectrum bills to pay off (that’s another whole story).

In the meantime, don’t let the trade associations, or any other industry-fed wags fool you.

It’s 2010 and Canadians pay the highest (%#%@!) cell phone bills in the world.

  • http://twitter.com/gussynichols Luke N

    Very interesting to see.

  • http://newpunishment.deepr.ca/ DarrinSearancke

    Almost a good reason to move back to New Zealand. Almost …

  • Shawn

    Somebody Help us!

  • SM.

    It's still cheaper to get iPhone plans in Canada than the United States.

  • Sean McCann

    Perhaps this means that Canadians are not picking the correct plans to suite their needs. There are a lot of budget pay-as-you-go providers that offer amazing rates.

  • karen

    not surprised.. lack of competition

  • rmonster

    There's a population density factor at work here, though I'm not convinced it would make up for this drastic disparity. It's important to note, since that's what the mobile companies drag out as their big excuse for high prices. :/

  • http://twitter.com/kaaist Kyle Pearce

    One more reason why Canada is not competitive in the new economy.

  • http://twitter.com/lucisferre Chris Nicola

    The Canadian government supports these media monopolies, and the price fixing that is going on here

  • http://www.meneame.net/story/2010-canadienses-pagan-facturas-movil-mas-caras-mundo Es 2010 y los canadienses pagan las facturas de móvil más caras del mundo

    [...] Es 2010 y los canadienses pagan las facturas de móvil más caras del mundo   wirelessnorth.ca/2010/08/27/its-2010-and-canadians-pay-the-h…  por maldito_milton_friedman hace 3 segundos [...]

  • http://twitter.com/atfirstsightvid At First Sight

    :(

  • Rackbaron

    72.0% of the population is concentrated within 150 kilometres (93 mi) of the nation's southern border with the United States
    The population density issue has always been a smokescreen to cover illegal price fixing in the oligarchy.

  • http://twitter.com/mor10 Morten R-H

    The core problems at work here are

    a) The mandate of the CRTC is not to protect consumer rights but to ensure that the companies play fair with each other. As a result the companies in practice agree to keep the prices high, handsets few and service crappy, and we can't do anything about it.

    b) Canadians are way too willing to accept the status quo. If people started contacting their elected representatives demanding better laws are regulations around carriage fees, access and consumer rights, things would happen. Just look to Europe where carriers are at the mercy of the consumer, handsets are unlocked and not tied to carriers by default and you own your own phone number outright. It wasn't always thus, but after persistent pressure from the public the politicians did what needed to be done and put a leash on the greedy carriers.

    Bottom line: Speak up or nothing will change.

  • Matttestacc

    No there aren't.
    Pay as you go is $0.30 a min
    Signing up with the big 3 gets you down to $.2 a min.
    There is simply no low cost option that gets you a reasonable amount of airtime.

  • http://quoderat.megginson.com/2010/08/27/google-voice-sort-of-available-in-canada/ Google Voice (sort-of) available in Canada | Quoderat

    [...] unlimited North American phone calls on (say) a 6 GB, $30/month data plan instead of paying the world’s highest cell phone bills for (limited) voice and long distance. I’m sure Rogers and other mobile carriers won’t [...]

  • http://twitter.com/transistorg pkoi

    typo fix : “worse relative affordability worse”

  • http://twitter.com/transistorg pkoi

    typo fix : “worse relative affordability worse”

  • Mrhaines

    Cell phones are stupid

  • Fred Snodgrass

    Significantly smaller population + demand for latest and greatest = higher prices charged per user. Is it really all that tough to figure out?

  • PingYoo1988

    Dude, no way man. Thats totally insane dude.

    http://www.anon-tools.au.tc

  • moosebump

    if penetration is so important I guess Greece and Portugal should be world economic powers.
    Is it really better to have 2 cell phones for every man, woman, child and the odd dog? Cell phones are disposable in Europe but I don't see why that's a better model.

    Greece 205% penetrated and $20/month per subscriber. Suppose 85% of the population actually needs a cell phone (15% are under 14). 205% x $20 / .85 = $48. So for each potential cellphone carrying adult and teenager, they are spending $48/month.

    Canada 65% penetrated and $55/month. 65% x $55 / .85 = $42.

    So normalizing for all the people carrying 2 or 3 phones in Greece, they are actually spending more. Is there a benefit to that? Unless you can think of a good way to use 2 phones at once I can't think of anything.

    Canada also leads the world in whiners (actually the riots in Greece when the government revealed it was nearly bankrupt might suggest they are pretty good on that measure too.)

  • http://www.linkbuildr.com/ Linkbuildr

    I cannot get over how much EVERYTHING costs here…especially on the west coast.

  • karmatiger

    and that accounts for the cost of cellphone coverage along highways how?

    Low population density + demand for coverage outside of urban areas = costly infrastructure per subscriber.

    That said, the $5 per month “admin fee” gouge really needs to DIAF.

  • http://sittingonanatomicbomb.com/2010/08/28/canada-has-worlds-highest-cellphone-bilsl/ Canada Has World’s Highest Cellphone Bills | SITTING on an ATOMIC BOMB

    [...] 28, 2010 by Pep| Leave a comment Mobile phone users in Canada can now proudly boast that they pay more per month than any other nation on earth. Surprise. Subscribers who have made the questionable decision of switching to the deceptively [...]

  • http://real-url.org/twitted.php?id=22373238751 Twitted by F_Desjardins

    [...] This post was Twitted by F_Desjardins [...]

  • GP

    This is misleading. The first plot shows revenue per user, which means that our networks could actually be cheapest in the world but we consume so much more that we end up paying more. Unless you correct for usage, or plot revenue per minute of talk time or per kilobyte, you can't use this data to make the conclusions in this article.

  • http://twitter.com/thejoelong Joseph Long

    not only smaller population but extremely large land mass in which is “generally” covered for cell phones, thus causing higher cost for companies

  • http://www.darcynorman.net/2010/08/29/on-expensive-canadian-cell-phone-plans/ on expensive canadian cell phone plans | D'Arcy Norman dot net

    [...] Wireless North took a look at cell phone plan rates in a few countries and it looks like the feeling of being taken for a ride is probably pretty common here in Canada. [...]

  • http://blog.mastermaq.ca/2010/08/29/notes-for-8-29-2010/ Notes for 8/29/2010 at MasterMaq's Blog

    [...] Headline says it all: It’s 2010 and Canadians pay the highest cell phone bills in the world. [...]

  • safeblad

    Who honeslty cares about calltime apart from people that waste their lives discussing inane nonsense? Let's see a comparison of data tarrifs

  • http://www.adminhelpdesk.net/cellphone/its-2010-and-canadians-pay-the-highest-cell-phone-bills-in-the/ It's 2010 and Canadians pay the highest cell phone bills in the … | Admin Help Desk

    [...] more here: It's 2010 and Canadians pay the highest cell phone bills in the … if(typeof(hyperweb_adcount)=="undefined") hyperweb_adcount [...]

  • calwell

    Hello Editor (or whomever wrote this article). Can you provide us with more details about the base data that you drew this information from? What particular BofA Merril Lynch report is this based on and can you provide the report itself (or a link to it?).

  • http://cellplanexpert.ca cellplanexpert.ca

    It's hard to find a good fine grained population density map that doesn't stop at the border (maybe here: http://maps.howstuffworks.com/north-america-pop…), but density is fairly similar if you compare network coverage. Perhaps an argument can be made for the States' greater economies of scale (10X population and much higher penetration).

    The strongest argument against is that if density were really the issue, then you would think that the most populous provinces (AB,BC,ON,QC) would have lower pricing. In fact, the opposite is true. Don't believe me? Go to http://cellplanexpert.ca (disclaimer: I built it), build a usage profile, then switch between provinces and compare results. The effect is less pronounced now that the new players have arrived in the biggest provinces, but the prairies and Atlantic provinces consistently get better deals. Rogers (w/ the broadest single network coverage) has more minutes/features and at lower prices on it's equivalent plans in the lower density provinces.

    This to me is very strong evidence that pricing is completely based on what the market will bear and has nothing to do with input costs.

    The $15 CID/Voicemail pkg mentioned above and other things like ridiculous $0.15/txt rates have a cost that approaches zero, yet are billed exorbitantly. Further evidence of a duopoly (Rogers, Bellus) that compete on marketing, not cost reduction.

    If you take a hard look at the the plans and how they are marketed, it's pretty hard to blame low density more than lack of competition.

    One other argument against the low density argument is the Finnish example. Finland has both a lower density and smaller population than Canada, but it has had ubiquitous coverage for a long time (including large swaths of the countryside and north of the Arctic circle when I was there back in 2002)

  • http://www.michaelnus.com/social/bad-customer-service-telus-be-thy-name/ Bad Customer Service, @Telus Be Thy Name. | MichaelNus

    [...] have the most expensive cell phone carrier plans in the world? This is not an exaggeration! Here are the stats to prove it! I think they problem is caused by the “Big three” carriers who have up till this point [...]

  • http://romanz.ca Roman

    I don't think we needed a report for this. Canada is the only country in the world that I know that charges for call display and regular voice mail in their monthly packages. Only one country in the world to have “System Access Fee” or how it is called now “Government Regulatory Recovery Fee.” So whiners or not, the fact is that we have oligopolies here that make big companies not care about consumer. That is why Rogers would rather launch a fake brand and spend millions on advertising to take out new entrants, rather than actually care about their customers and lower their fees.

  • Kyle Sharpe

    Where can one get the original report?

  • http://veroszlindr.wordpress.com/2010/10/07/vote-or-die/ “Vote or Die” | Veroszlindr's Blog

    [...] http://wirelessnorth.ca/2010/08/27/its-2010-and-canadians-pay-the-highest-cell-phone-bills-in-the-wo... [...]

  • http://hwmg2.wordpress.com/2010/10/07/vote-or-die/ “Vote or Die” | Group 2: History of Women's Movements in North America

    [...] http://wirelessnorth.ca/2010/08/27/its-2010-and-canadians-pay-the-highest-cell-phone-bills-in-the-wo... [...]

  • http://obront.wordpress.com/2010/10/08/it%e2%80%99s-2010-and-canadians-pay-the-highest-cell-phone-bills-in-the-world/ It’s 2010 and Canadians pay the highest cell phone bills in the world « This Too Shall Pass

    [...] It’s 2010 and Canadians pay the highest cell phone bills in the world | Wirelessnorth.ca. Comments (0) Trackbacks (0) Leave a comment [...]

  • http://www.2fatdads.com/2010/10/bell-canada-gives-the-great-white-shaft-to-data-users/ Bell Canada Gives The Great White Shaft to Data Users « 2 Fat Dads

    [...] story really pissed me off this morning, especially after reading last week’s report that we are already getting the The Great White Shaft by paying some of the highest cell phone [...]

  • http://forums.precentral.net/palm-pre-2/267508-pre-2-100-rogers.html#post2739447 pre 2 $100 on rogers – PreCentral Forums

    [...] cost doesn't really change, but the amount of people supporting it does. Here's a comparisson of average cell phone rates in the world Happy [...]

  • http://www.canadadeals.ca Canadadeals

    This is crazy, as a Canadian resident I did not know cell phone statics were at this rate.
    http://www.canadadeal.ca

  • http://mybillsarehigh.wordpress.com/2010/12/22/it%e2%80%99s-2010-and-canadians-pay-the-highest-cell-phone-bills-in-the-world-wirelessnorth-ca/ It’s 2010 and Canadians pay the highest cell phone bills in the world | Wirelessnorth.ca « MyBillsAreHigh.com

    [...] It’s 2010 and Canadians pay the highest cell phone bills in the world | Wirelessnorth.ca. [...]

  • http://www.mybillsarehigh.com/blog/?p=5 MyBillsAreHigh.com » Archive » We’re #1… which is the worst place to be…

    [...] It’s 2010 and Canadians pay the highest cell phone bills in the world | Wirelessnorth.ca. [...]

  • http://www.quora.com/Do-Canadians-pay-the-highest-mobile-bills-in-the-entire-world Do Canadians pay the highest mobile bills in the entire world? – Quora

    [...] and PeopleAdd QuestionAdd QuestionDo Canadians pay the highest mobile bills in the entire world?http://wirelessnorth.ca/2010/08/…Cannot add comment at this time.  BIU     @   Edit [...]

  • http://www.mybillsarehigh.com mybillsarehigh.com

    It's pretty crazy how expensive it's gotten and continues to be despite all of the new competition. I've been able to make a business out of helping people with high cell phone bills in Canada. Truth is, I shouldn't be in business but the large telecom companies made it so I can be…

  • http://www.nt3r.com/blog/2011-03/i-hate-phones-sort-of/ » I Hate Phones (Sort of) Gradual Ascent

    [...] jump ship entirely (however doubtful that may be). After a bit of research, knowing quite well that Canadians pay some of the highest cell phone rates in the world, I determined that it didn’t really matter who I went with, the deal would be pretty much the [...]

  • Numberwang

    I can think of many good reasons to move to New Zealand

  • Numberwang

    Disagree. I moved back to Canada after two years in Australia, a country with a similar population density and size. In Australia, if you have an unlocked phone, you can walk into any supermarket and pick up a pay-as-you-go SIM card from any of the major carriers, usually pre-loaded with 10-20 dollars of air time. Sometimes these are as cheap as $2.00 to buy. No contract, no monthly charges.

    So what, you might ask. You can buy pay-as-you-go cards in Canada too. Yes, but in Canada, the air time you purchase expires after 30 days, regardless of how much you have used. As an example, i bought $20.00 air time with Fido for my wife last month. After 30 days and only a handful of calls, the remaining balance went poof! In Australia, the pay-as-you-go air time is good for 365 days, much less of a rip-off.

    Maybe part of the difference is that Australia does not have the same anti-competitive and protectionist bullshit that restricts mobile services in Canada to Canadian companies only. Vodafone, for example is one of the major players in Australia. Allow foreign players like Vodafone, Orange etc into the Canadian market and watch things change. As long as the unholy trinity of Bell, Telus and Rogers have an oligopoly on Canadian communications, aided and abetted by a compliant CRTC, nothing will change.

  • http://whereallroadsbegin.wordpress.com/2011/05/10/the-free-market-a-primer-for-environmentalists-and-social-activists/ The Free Market: A Primer For Environmentalists and Social Activists « The Art Of Generalization

    [...] average bill in the world for some of the poorest network coverage ranking slightly behind Peru.. http://wirelessnorth.ca/2010/08/27/its-2010-and-canadians-pay-the-highest-cell-phone-bills-in-the-wo…  One of the key reasons for this is restrictions Industry Canada, a federal regulatory agency, [...]

  • http://www.squawkfox.com/2011/06/10/data-plans/ Do you suffer from costly data plan disease? | Squawkfox

    [...] Canadians have it far worse. According to a recent global telecom report from BofA Merrill Lynch (via Wireless North), the country that pays the most for cell phone use per subscriber is Canada, at $55 per [...]

  • http://www.lesbnb.com/2011/06/do-you-suffer-from-costly-data-plan-disease/ Do you suffer from costly data plan disease? | LesBnB.com

    [...] Canadians have it far worse. According to a recent global telecom report from BofA Merrill Lynch (via Wireless North), the country that pays the most for cell phone use per subscriber is Canada, at $55 per [...]

  • http://www.facebook.com/people/Chuck-Rowland/100001521605694 Chuck Rowland

    Your Canadian voice can be heard. There is a volunteer group that is going up against the CRTC but needs your help.

    They said “By bringing your voices to the table. OpenMedia.ca is attending the Internet metering hearing on your
    behalf. When it’s our time to speak, we’ll be representing the
    interests of the nearly half-a-million Canadians who signed the Stop The
    Meter petition. We’ve got your back. On your behalf. When it’s our time to speak, we’ll be representing the
    interests of the nearly half-a-million Canadians who signed the Stop The
    Meter petition. We’ve got your back”

    You can join in and sign – electronically, a petition that is sent to Government representatives. http://openmedia.ca

  • http://www.mebweb.ca/clients/8pod/perdez-de-largent-facilement-en-ignorant-vos-clients/ Perdez de l’argent facilement en ignorant vos clients.

    [...] tenu que la facture moyenne de cellulaire s’élève à 55$ par mois au pays, et que la plupart des contrats sont pour une durée de 36 mois, cela signifie que [...]

  • http://deercreekconsultants.net/the-mobile-city-project-%e2%80%93-the-blueprint-of-a-truly-mobilized-city The mobile city project – the blueprint of a truly mobilized city | Deercreek Consultants

    [...] smartphones. • Overpriced mobile contracts hold back development, which seems to be the case Canada which has the world’s highest phone bills, while being ranked 43rd in the world for mobile [...]

  • Skrotum

    sounds like amazon.com versus amazon.ca and why I have to pay $10k more for a BMW. Gongshow supremo

  • rss iconSubscribe to WirelessNorth.ca
    twitter iconFollow us on Twitter

  • Recent Comments

  • Categories

  • Archives

    • June 2011
    • May 2011
    • November 2010
    • October 2010
    • August 2010
    • July 2010
    • June 2010
    • May 2010
    • April 2010
    • March 2010
    • February 2010
    • January 2010
    • December 2009
    • November 2009
    • October 2009
    • September 2009
    • August 2009
    • July 2009
    • June 2009
    • May 2009
    • April 2009
    • March 2009
    • February 2009
    • January 2009
    • December 2008
    • November 2008
    • October 2008
    • September 2008
    • August 2008
    • July 2008
    • June 2008
    • May 2008
    • April 2008
    • March 2008
    • February 2008
    • January 2008
    • December 2007
  • Blogroll

    • CommunityNorth.ca
    • StartupNorth.ca


© 2007 Wirelessnorth.ca |iKon Wordpress Theme | Powered by Wordpress
RSS