Montreal Economic Institute: Canada’s Wireless Market is Doing Fine

by Jordan Richardson on September 12, 2012

In what may come as a surprise to the average Canadian wireless consumer, a research note published by the Montreal Economic Institute claims that the industry in Canada in “globally competitive” and “functioning well.” Anyone looking at recent history in the industry, from Bell’s prepaid wireless services class action suit to “cell phone bill shock” to the media encroachment of major providers, will perhaps discover a different vision to that favoured by the think tank.

According to Yves Rabeau, an associate management professor at Université du Quebéc à Montréal who is also an associate researcher at MEI, Canada is in the middle in terms of prices charged among developed countries.

For the Montreal Economic Institute, it’s all a matter of looking at the right numbers.

According to the research note, the price of a “basic wireless plan” is comparable to what is paid in American cities and somewhat higher than “other cities examined.” Citing a report by Wall Communications, the institute claims that Canada’s prices are “lower than those in the U.S. in four out of six usage scenarios.”

The research note then admits that Canada’s prices are “higher than the OECD average.”

From there, the MEI goes on to claim that Canada’s roaming situation isn’t so bad. Media reports have used an “unrealistic situation” in suggesting a comparison based on downloading one megabyte without a roaming plan, so a more “accurate” comparison can be gleaned by drawing on “the cost of 20 MB in 20 sessions over a period of one month in the least expensive destination.”

Looking at it this way reveals that Canada sits as the seventh least expensive of 34 countries.

When Rabeau reaches the apex of the research note, the point emerges: “Canadians therefore have every reason to want to maintain the approach put in place nearly two decades ago, namely refraining from imposing specific regulation on this important sector of our economy (emphasis added).”

The statement and the cherry-picked research will doubtlessly become pillars of the argument against regulating Canada’s wireless industry, as the same big companies attempt to wriggle free of anything that keeps them from imposing their business model on the customers. To their credit, however, the companies do seem to favour some sort of national standard with respect to wireless contracts – something MEI advises against.

The Montreal Economic Institute is “funded by the voluntary donations of individuals, businesses and foundations that support its mission.” The MEI does not disclose the specifics of its donors, however, for fears that “organizations similar to the MEI” would have an opportunity to solicit funds. The foundation of the MEI’s mission statement is couched in basic free market ideology, such as the Randian conception that “people who make money are creating wealth.”

Michel Kelly-Gagnon, the president and CEO of MEI, has written a number of personal opinion pieces that perhaps further illuminate the mission statement of the organization. Included among them are articles that suggest “True entrepreneurs…deserve our gratitude” and pieces decrying a “tax the rich” mentality. There’s even a bit about the “dangers” of so-called “Soviet imagery,” citing the “intellectual and moral recklessness” in a pair of teens audacious enough to wear red T-shirts featuring USSR emblems.

In the minds of many Canadian wireless consumers, the industry is far from fair. Here at The Telecom Blog, we’ve published countless stories that discuss just how dissatisfied customers are with the current scenario and just how beneficial some regulatory oversight could be if enacted equitably. Most people seem to agree (see poll) that letting the usual suspects have free, unfettered reign can’t possibly improve fortunes for average Canadians.

Did you like this post ? TheTelecomBlog.com publishes daily news, editorial, thoughts, and controversial opinion – you can subscribe by: RSS (click here), or email (click here).

Written by: Jordan Richardson. www.digitcom.ca. Follow TheTelecomBlog.com by: RSSTwitterFacebook, or YouTube.

{ 1 trackback }

Rogers CEO Self-Servingly Declares Canada Can’t Handle Four Wireless Competitors | Stop the Cap!
May 28, 2014 at 1:10 pm

Comments on this entry are closed.

Previous post:

Next post: