As the stress of inflation mounts, Canadians say they’re fed up with unjustifiably high wireless prices — and an overwhelming majority, 82 per cent, are calling on the government to do more to lower the cost of their cell phone bills, a new report shows.
The 2022 Canadian Telecom Sentiment Report, conducted by Pollara Strategic Insights for Globalive, paints a bleak picture of Canadians’ views on the telecom industry — one fraught with hidden fees, overage charges, upselling, billing errors and a palpable lack of political action, making telecom bills Canadians’ third-biggest cost-of-living concern after food and gas.
While the findings come during a period of widespread consumer frustration across numerous sectors, telecom takes the top spot for spawning the angriest Canadians of eight major industries, including airlines, banks and insurance companies.
“I’m not surprised Canadians are looking to Ottawa to step up,” said Anthony Lacavera, a prominent figure within the national telecom space. Lacavera currently serves as Chairman and Founder of telecom investment company Globalive. “Otherwise, telecom companies are just going to keep doing what any rational for-profit business would do: charge as much as the market can bear.”
Canadians pay some of the highest prices in the world for their Internet and cell phone services. A 2022 report by telecom research firm Rewheel ranked Canada as the most expensive wireless market among 50 counties, and a report by consumer comparison website WhistleOut found that Canadians pay 15 to 40 per cent more than Americans for cell phone plans.
This disparity is often attributed to a “telecom oligopoly” in which Canada’s “big three” wireless providers — Rogers, Bell and Telus — control 90 per cent of the market.
Though the expectation for change is low — just 14 per cent of Canadians surveyed think phone plans will come down in cost so they are on par or less expensive than the rest of the world — Lacavera said there is a clear pathway: “the government must ensure there is an independent pure-play wireless company in Canada.”
The sole difference between the Canadian and U.S. market, he said, is the existence of a pure-play company, such as T-Mobile, which sells wireless service without also selling cable or phone home services. Instead of needing to protect and prop up its other arms of business – aka legacy cable and home phone operations – as many large telecom incumbents do, Lacavera said pure-plays’ wireless focus allows them to offer better rates to consumers by not needing to lean on ‘bundled’ offers. This allows for greater investments in cellular networks, including 5G, and a more concerted focus on driving innovation within the space.The lowering of prices by pure-plays also forces competitors to then match them, bringing greater affordability to the entire market.
Since pure-play T Mobile hit the U.S. market, Lacavera said competition has pushed prices down from an average of $50 a month in 2012 to around $37 a month today.
“If the big three face pressure from a real competitor, then suddenly there are more promotions and better packages. Suddenly, the contact centre answers faster. Suddenly, they care about your business,” Lacavera said.
As Lacavera pointed out, Canadians’ telecom woes aren’t strictly financially driven. The summer’s historic 19-hour Rogers outage, which halted millions of people’s personal and business activities, raised questions around the quality of service customers are getting in return for their investment.
With a possible Rogers-Shaw merger in progress that could see more power land in the hands of the big three, this report highlights Canadians’ growing exasperation with the telecom industry and pressing desire for government-led change.
But the feds would need to move quickly to keep Canadians afloat: the survey says 66 per cent of Canadians would deem their cell phone bill unaffordable if it rose a mere 10 percent.
By Ilana Belfer
