Wireless carriers gouging Canadians

From this morning’s Globe & Mail:

The average cellphone bill is one-third more in Canada than in the United States, and although the price gap is closing, it continues to hinder the adoption of wireless communications in this country, a report to be released on Monday says.

Just 56 per cent of Canadians have a mobile phone, compared with an average of about 90 per cent in the rest of the developed world. The discrepancy leaves the country at a competitive disadvantage when it comes to using a basic productivity tool that has become the world’s most common communications device.

“Canadian wireless adoption is a national disgrace,” concludes the telecommunications consultancy Seaboard Group, in a report entitled Lament for a Wireless Nation.

Twenty-four years after the federal government issued its first licences for cellphone service, only about one of every two Canadians has a device, compared with about three-quarters of the population in the United States, which began going mobile at the same time.

— Simon Avery,  “High fees prompt Canadians to leave cellphones on hold“, Globe & Mail, 05 March 2007.

On the other hand there is a certain school of thought which regards mobile phone usage as akin to driving an SUV, and they would no doubt interpret this low rate of adoption as a sign of Canadian superiority.

The best stuff is in the report highlights, some of which I will quote here from the SeaBoard Group themselves:

  • The average wireless customer in Canada pays 60% more than if they had used a U.S. plan. The average Canadian wireless customer also pays a 19% premium when compared with customers of European carriers when identical profiles are priced and adjusted for purchasing power parity.
  • While Canada offers plans at parity rates for prepaid and low-end user profiles, Canada is significantly more expensive than the U.S. for plans that cover more than just ‘glove compartment usage’.
  • Rogers, with its Fido brand, has the most compelling Canadian strategy of having both the least expensive prepaid product in the market, while the primary Rogers brand, with its broader access reach, remains a higher price, higher value product.

wireless_pricing

(Chart courtesy of the SeaBoard Group)

One big obstacle to Canadian wireless adoption is the ridiculous pricing of wireless data plans.  Many US carriers offer flat-rate unlimited data use — which is handy for anybody who transmits or receives a lot of messages with their BlackBerry or Treo.  Rogers’ BlackBerry plans aren’t too bad, but for other GPRS devices the data charges are ridiculous.

If you look at the Rogers data plans, they claim that 1.5MB is sufficient for 25 e-mails per day.  This may be true for non-encrypted protocols with a minimum of file attachments, but it is not at all true for a Treo 650 utilising BlackBerry Connect (which requires 3DES encryption) within a corporate environment.  With that device and software, at 25 messages per day, the data usage is closer to 3-5 MB.  Since Rogers doesn’t have a  5MB plan you have to step up to the 7MB plan, which costs  CDN $40/month on top of your regular wireless voice charges (which is about CDN $35 for me).

On other hand, if I were a Cingular customer in the United States, I could sign up for the Smartphone Connect plan (5 MB/mo) for just USD $9.99 (CDN $11.79).  If I wanted unlimited data usage on Cingular, I could get the Smartphone Max plan for USD $29.99  (CDN $35.39).  Rogers has no unlimited data plan, but they’re happy to charge you CDN $100 (USD $84.73) for their top-end data plan which includes 200MB of data usage.

Seeing a bit of a pricing disconnect there?  That’s why I don’t use the data capabilities of the Treo very much.  Is it any wonder that we’re reluctant to use these things to their full potential?

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