Wirelessnorth.ca

The openmedia initiative has really grown up. Check out their newly launched website, report and action plan. We here at wirelessnorth.ca are inclined to believe in a lot of the points. We like the ideas of better utilizing spectrum auction funds, we like the ideas of spurring(or requiring with new construction) investment if firbre connectivity. In addition, reforms to the CRTC to give that organization more teeth and a clearer mandate would be welcome. You may or may not agree with all the stated problems or remedies proposed by openmedia.ca but you have to agree that they are raising the quality of the debate. More of this please.

Read more: Casting an Open Net [openmedia.ca]

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.

While we were away, this year’s Canada3.0 conference took place, the grand summit of entertainment & digital executives, educators, and government leaders. Again this conference took place in the bustling digital cluster of Stratford Ontario also renown for it’s thespian population, verdant local agriculture and vague geographical proximity to Waterloo.

Fortunately for the rest of us, our friend David Eaves (who btw is on fire with prescient commentary these days) was on the scene. His thoughts here are absolutely essential reading:

But these moments aside, the more I reflect on the conference the more troubled I feel. I can’t claim to have attended every session but I did attend a number and my main conclusion is striking: Canada 3.0 was not a conference primarilu about Canada’s digital future. Canada 3.0 was a conference about Canada’s digital commercial future. Worse, this meant the conference failed on two levels. Firstly, it failed because people weren’t trying to imagine a digital future that would serve Canadians as creators, citizens and contributors to the internet and what this would mean to commerce, democracy and technology. Instead, my sense was that the digital future largely being contemplated was one where Canadians consumed services over the internet. This, frankly, is the least important and interesting part of the internet. Designing a digital strategy for companies is very different than designing one for Canadians.

…

Indeed, case in point was listening to managers of the Government of Canada’s multimedia fund share how, to get funding a creator would need to partner with a traditional broadcaster. To be clear, if you want to kill content, give it to a broadcaster, they’ll play it once or twice, then put it in a vault and one will ever see it again. Furthermore, a broadcaster has all the infrastructure, processes and overhead that makes them unworkable and unprofitable in the online era. Why saddle someone new with all this? Ultimately this is a program designed to create failures and worse, pollute the minds of emerging multimedia artists with all sorts of broadcast baggage. All in the belief that it will help bridge the transition. It won’t.

The ugly truth is that just like the big horse buggy makers didn’t survive the transition to the automobile, or that many of the creators of large complex mainframe computers didn’t survive the arrival of the personal computer, our traditional media environment is loaded with the walking dead. Letting them control the conversation, influence policy and shape the agenda is akin to asking horse drawn carriage makers write the rules for the automobile era. But this is exactly what we are doing. The copyright law, the pillar of this next economy, is being written not by the PMO, but by the losers of the last economy. Expect it to slow our development down dramatically.

Amen. The whole post is essential reading: Canada 3.0 & The Collapse of Complex Business Models

What Canada needs most of all is digital policy that actually drives disruption. Policy that maximizes the creative and innovative potential of any Canadian not just legacy Big Content. Let’s make Canada a nation of creators, not a nation of consumers. Let’s make digital policy and copyright policy that maximizes the distribution potential of the internets rather than blocking, throttling or criminalizing the tubes at the behest of walking-dead distribution models.