Canadians’ Cellphone Bills 13% Higher than Last Year

by Istvan Fekete on May 13, 2013

A J.D. Power study has revealed a couple interesting facts about the Canadian wireless market: Koodo topped its consumer satisfaction survey, followed by Virgin Mobile and Wind Mobile.

Don’t let yourself be mislead by the names: both Koodo and Virgin Mobile are owned by the incumbents. The only odd-one-out on the list is Wind Mobile, the struggling startup, which is reportedly up for sale, just like the other two wireless startups, Public Mobile and Mobilicity.

But even more has been uncovered by the J.D. Power study, which was omitted by the majority of headlines, but highlighted by OpenMedia.ca: Canadian cellphone bills are up 13% compared to last year. And this is happening while the country’s overall inflation rate has been holding steady at 1%.

In an interview with CBC’s Lang and O’Leary Exchange, Steve Anderson, the founder and executive director of OpenMedia.ca, a non-profit advocate for increased competition, shed light on the incumbents’ influence on prices and services. According to Anderson, Canadians pay some of the highest cellphone bills in the world for one of the worst services. And that’s happening because the government is really protecting these big telecom companies and may be the reason why they only compete in Canada and not abroad.

To back his claims, Anderson points to the Rogers–Shaw deal: the incumbent has a plan to grab wireless assets set aside for wireless startups by the government. Despite having clear guidelines for this scenario, the government won’t even enforce their own rules to stop the incumbent.

The above case is just one example of the government’s inconsistency, which recently made public — via Industry Minister Christian Paradis — that it needs foreign capital to boost cellphone market competition. As Kevin O’Leary highlights, these inconsistencies are keeping investors away from Canada, rather than encouraging them to put their money into a wireless market controlled by three, government-protected players.

And just highlight price gauging practices, O’Leary said it was 66% cheaper for him to roam in Canada on his Verizon phone, than using his cellular plan from an incumbent. I think there is a strong demand for a change.

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Written by: Istvan Fekete. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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