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]

Better late than never, but we were getting a lot of requests to repost. In case you missed it, presented this Septemeber to a standing-room only crowd, and the top rated session at FITC Mobile 2010 in Toronto, with charts from WirelessNorth.ca Probably though, you had to be there or something ;)

Q3 data is just coming out, so watch for an update sometime soon-ish.

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.

Over on the Tyee.ca Steve Anderson makes a few good points:

In last week’s speech from the throne and release of the budget, the government had an opportunity to address digital issues. All that was made clear, however, was that government is committed to opening Canada’s telecommunications and satellite industries to foreign ownership. Giving up on our capacity to meet this challenge and instead relying primarily on foreign investment schemes is not the answer. Such an approach would, at best, miss the lessons learned from the countries that are leading in broadband speed, access and cost.

Link: Why Are Tories Giving up on Canadian Innovation?

[ see also: Canada Needs a Serious Agenda for Media Innovation ]

In markets like the UK, foreign-ownership of carriers has been consistent with a high level of industry competitiveness and mobile innovation. However elsewhere like New Zealand the case is not as clear.

In the wired world, the models that work for driving advanced broadband typically have involved significant investment at the national or municipal level, effectively fibre to the curb as a fundamental public-good infrastructure service like gas, water, or roads with private ISPs servicing and marketing the last “mile” to households. Of course wireless couldn’t be more different. Tower-sharing and in-territory roaming requirements are a step in the right direction of reducing total infrastructure costs. However, instead of otherwise lowering barriers to entry the government seems to set up spectrum auctions as a way to take billions out of ICT investment rather than put it in.

Canada will be joining the ranks of nearly every other country on the planet (save Cuba, any others?) to allow foreign ownership of Canadian telecom companies. Even North Korea recently allowed foreigners to build out a mobile network there. Coincidentally, that was Orascom, the same wolf-in-Wind’s clothing that effectively broke through the regulation here in Canada.

The good news is that the Government is belatedly doing the right thing. They’ve recognized that their policy aims for stimulating industry competition are at odds with the facts on the ground, and at odds with Canada’s antiquated (pre-internet, pre-mobile phone industry) Telecom Act.

One might argue they should have done this before the 2008 spectrum auction. Thereby the feds could have given all the new entrants as well as the incumbents a more fair and level playing field for raising capital. Boy are some still bitter about that.

But not to worry, there’s still the big 700Mhz spectrum auction to come. That’s the real good stuff. And wouldn’t you know it, there’s also a yawning government deficit for which some of that foreign capital may slot in just nicely.

By the way, if you think that all this extracting billions from the telco industry by spectrum auctions will ultimately lower your wireless bill, you may in fact be dreaming.

But whatever, bring on the foreigners. Giddy-up, this business is gonna get interesting.

Tony’s stock options just went way up. So did Dave’s. Those next capital calls are looking much easier now.

On the other side, look for Vodaphone or t-mobile to buy Bell/Telus by sometime tomorrow.

LINK: Canada may consider foreign control of telecoms

The Canadian wireless industry has come a long way in just 3 years. From the world’s crap hand-me-down phones, years behind the curve on 3G, and worse pricing on data than some 3rd world countries to…

• From zero to not one, not two but 4 (and soon to be more) national 3.5G HSPA GSM-standard networks in Canada
• New price plans from Wind, DAVE and Public shaking up the landscape.
• Fiercer competition between the major carriers now that they are all on the same network technology with all the same devices
• FAST 3G networks at 21MBs (and 4 of em!) that’s faster than any 3g network in the US
• Suddenly great deals on rocket sticks everywhere. And tethering that works and portable hotspots and other fun things.
• ATT&T is not in Canada, count your lucky stars
• Unlike on ATT&T, a 30% rate of call dropping New York or 100% anytime at SXSW in Austin, is not considered normal
• Not one but 3 choices of carrier for the iPhone, and more choices for the latest Androids and Blackberries
• Number portability, at last it was mandated and it gives consumers more power to switch
• Wireless penetration rates rising rapidly, and the appetite for smartphones by consumers that is taking even the carriers by surprise
• SIM cards on every network. (the market for unlocked phones is coming to Canada). Just wait for the Google phone store to get to Canada, unraveling the relationship between carriers and devices, sometime this year we can hope. And if we ever get Google voice, be ready for the perfect storm of telco disruption.
• And skype is starting to work well on mobiles, just to turn the screws on the legacy telcos a little more

If I were a carrier, I’d be a little stressed out by this heightened level of competition in the sleepy old wireless north (aka Canada). For anyone else working with mobile, it’s a great time to be Canadian. Call it pent up demand, leap-frogging, or sweet redemption for years spent at the back of the pack, but suddenly Canada is looking good at wireless. Expect big things this decade.

Agree, disagree or flame away.

This is the other face of new competition in Canadian Telecom. We’ve been hearing rumblings this would happen for a while now. Rogers is leaning-down and girding for the coming price war.

These winds of change (so to speak) come blowing not only from the impending entry of new entrants (Tony Clement’s particular Windy conundrum notwithstanding) but even more so from a MUCH more competitive landscape amongst the big boys now that Bell and Telus have gotten their HSPA on.

This next bit will come as some cold consolation to those laid off today. However, a newly competitive telecom sector will, in time, bring broad benefits to nearly every other sector of the Canadian economy. In the new and evermore digital economy, innovation is driven by connectivity. A faster pace of innovation as evidenced by falling prices and much greater availability of leading edge wireless devices and services (as has been a strong trend for the last 1-2 years) is at least one encouraging sign for driving economic growth in the years ahead.

LINK: Rogers laying off 900 as part of cost cuts

Previously on WirelessNorth.ca: Where oh where your wireless bill goes (as with soylent green it’s mostly people. And profits. At least circa 1998 it was)

^{ps. As always, WirelessNorth.ca is hiring aspiring telcom pundits and snarks (or any combination of the two). The pay, not so good though.}

After Industry Canada spent over a million dollars trying and failing to launch a cell phone comparison tool for Canada, someone has gone and done it for free. That someone is J Ben Benjamin in partnership with web shop einfiniteweb.com. While not so much yet the world’s prettiest website, it’s gets the job done. You can compare voice minutes by time of day and incoming vs outgoing, data and text and a slew of other options (tip: look for data under “advanced search” took us a while to find that).

This is commendable work. Despite some progress the carriers have made recently towards simplifying plans, overall rate structures remain highly obfuscated in Canada. Therefore tools like this one that can bring any additional transparency are of great value.

A few caveats though, there are a few things the calculator does not take into consideration. On the cost side remember that all minutes are not created equal and nor are all “evenings”. On Rogers, for example, a minute can be one second long and an evening minute may start hours later than on a seemingly identical Fido plan.

The other factor not considered here is quality or value for service. A cheap plan isn’t much good if the network coverage doesn’t reach you or if all the handsets available are ancient crap (here’s looking at you flanker brands).

Some fun games you might be able to play with this tool: Check out the price discrimination by province! Find the best plans for the rather short list of specific phones actually worth buying: BBerry, Droids, Iphone, Pre etc. (once they all come out). Sounds like fodder for future articles.

LINK: www.cellphoneratecalculator.com

Telus has announced it’s iPhone launch for November 5th of this year, at the same time they are announcing their half of the new 21MB HSPA+ (same speed as Rogers) network they’ve been rolling out with Bell. Telus is calling it “Canada’s largest 3G+ network“. We have no idea what that is supposed to mean.

What we do know, is that things are looking up in Canada Wireless-wise. Compared, for instance, with our poor American neighbours to the south we now have not one but three (and soon to be more) offering the latest 3G standards all of whom offer, generally, far better reliability than the US’s largest GSM carrier AT&T.

On top of which we now have three carriers offering the iPhone 3GS as well as, we trust, some very nice next-generation androids and blackberries (9700′s) any day now.

It’s going to be a very good Christmas to look for smartphones and broadband sticks in your stockings.

We’re at a very interesting time for the wireless industry in Canada. We’re on the eve of new entrants into the industry but already the landscape looks a lot different and already a lot more competitive than just a few years ago. Here’s a snapshot, form our perspective [your perspective may vary] of the state of wireless in Canada. Stay tuned for where we go from here….

Originally presented at FITC Mobile 2009 in Toronto.