Canada's cellphone rates among highest

The Globe and Mail

At the end of 2010, new wireless companies – such as Wind, Mobilicity, Public Mobile and Vidéotron Ltée – were responsible for 30 per cent of all new wireless subscribers.

Cellphone users in Canada are paying more for wireless service than those in most other Western countries, but customers here come out ahead when measuring prices for home phone service, according to a new study by the Organization for Economic Co-operation and Development.

The annual survey by the OECD, a forum of 30 governments on social and economic issues, says telecom prices continued to fall last year, as features expanded and greater competition forced operators to think of new ways to sell their services.

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Across OECD markets, phone companies have moved to bundling their products, making it more difficult for consumers to price individual services. To deal with the growing complexity of pricing, the study's authors worked with the carriers to create different baskets of services for the sake of international comparisons.

For a "low-use" basket (defined as including 360 minutes of voice calls, 396 text messages and eight video messages per year), Canada ranked 20th most expensive out of 30 countries last year.

For "medium-use" (780 voice minutes per year) Canada ranked 28th out of 30. And for "high-use" (1,680 voice minutes per year) the country ranked 19th.

In each category, however, services in Canada rated less expensive than those in the United States, which ranked most expensive in low and medium usage and sixth most expensive in the high-use category.

The OECD focused its survey on rates for texting and voice services, noting that mobile data services were still in their infancy last year.

Canada landed dead last in terms of wireless penetration, a hot-button measurement in Canada that the government has cited as evidence that the domestic market needs more competition.

There were only 62 wireless subscribers per 100 people in Canada in 2007, well below the OECD average of almost 100 per cent, the survey said.

The U.S. also fell short of the average at 87 per cent penetration. Italy was top ranked with penetration of more than 150 per cent.

Tracking wireless customers accurately in Europe is harder because researchers count the number of SIM cards sold, which can be replaced in the GSM-standard phone. In North America, a different standard called CDMA is used by many carriers, and CDMA phones do not carry replaceable SIM cards.

For residential land line services, Canadian customers were paying the lowest rates among OECD countries. The country ranked seventh cheapest for low-use customers, third for medium use, and least expensive of all markets for high-use.

Business customers in Canada, however, did not enjoy similar leading rates. Home office and small business users were paying slightly more than the OECD average of $600 (U.S.) a year and medium-sized companies paid slightly less than the average of about $26,000 a year.



This table represents medium-use basket of services, which includes 780 minutes of voice calls, 600 SMS messages and eight MMS messages per year.

OECD mobile medium-usage basket, August 2008, tax included

Country

Fixed

Usage

Messages

Total

1. Netherlands

131.44

0.00

0.00

131.44

2. Finland

7.17

85.43

38.84

131.44

3. Sweden

124.89

0.00

13.04

137.94

4. Denmark

3.59

120.62

18.48

142.68

5. Norway

0.00

133.39

31.93

165.33

6. Iceland

196.04

0.00

0.99

197.03

7. Austria

0.00

137.82

61.82

199.64

8. Luxembourg

0.00

145.88

60.38

206.26

9. New Zealand

248.12

6.46

1.44

256.02

10. Switzerland

7.21

225.27

34.60

267.08

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28. Canada

461.66

35.28

3.69

500.63

29. Spain

9.60

364.51

134.15

508.26

30. United States

635.85

0.00

0.00

635.85