High fees prompt Canadians to leave cellphones on hold

[go leafs]

http://www.theglobeandmail.com/servl...echnology/home

We are getting ripped off!

High fees prompt Canadians to leave cellphones on hold

SIMON AVERY

From Monday's Globe and 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.

While Canada can boast to pioneering such technology as Research In Motion Ltd.'s BlackBerry wireless device, the country's adoption rate for cellphones puts it on par with Tunisia (average per capita income of $8,600 U.S.) and slightly behind Turkey.

“Being the rump of the wireless world should not be our national dream,” said the report's co-authors, Iain Grant, based in Montreal, and Kevin Restivo, of Toronto.

The report breaks the market into three categories of users. The high-end business user, who uses 1,200 minutes of voice plus data monthly, pays 150 per cent more than a subscriber in the United States.

The average user, defined as someone using 500 minutes a month, pays a 33-per-cent premium. And the light user, someone who keeps the phone packed away most of the month and spurns add-on features such as voice mail and call display, actually comes out ahead, paying 27 per cent less.

However, Canadians pay more in all three categories when compared with Europeans, the report said.

“Canadians aren't tech laggards, as has been suggested in recent discussions on the country's state of wireless phone competition. Instead, they are rational economic beings. Canadians hesitate to buy cellphones or to hit the send button on a cellphone knowing full well the cost at the end of the month will be breathtaking,” it said.

Seaboard suggests the government take several steps to improve the situation for Canadians, including allocating wireless spectrum for one or more new competitors. The spectrum could be awarded to a new national carrier or one or more regional operators. In the United States, regional phone companies such as Dallas-based MetroPCS Wireless Inc. have helped promote national competition. In addition, the report recommends that regulators consider minority foreign ownership in a new carrier.

Competition over wireless pricing in Canada has stalled since major operators swallowed the two independent companies; Vancouver-based Telus Corp. bought Clearnet Communications Inc. in 2000 for $6.6-billion (Canadian) and Toronto-based Rogers Wireless Communications Inc. purchased Microcell Telecommunications Inc. in 2004 for $1.4-billion. The government has an opportunity in its upcoming radio spectrum auction to fix that, and inject more competition in the market, the report said.

To give new entrants a fair chance, Seaboard also suggests the government require incumbents to share their tower space for a fee.

Among recommendations made to the industry itself, the report advised mobile phone companies to target new demographics, such as seniors, with appropriate pricing; eliminate long-distance charges; and focus on adding new customers rather than just trying to increase average revenue per user.

A report from the Canadian Radio-television and Telecommunications Commission last summer said phone companies for the first time generated more revenue in 2005 from wireless products than from local service, their traditional bread and butter. The Canadian Wireless Telecommunications Association says 47 per cent of all phone connections in Canada are wireless.

[UrbanPoet]

i think we get raped b/c we can...
we can afford to pay extra so they charge extra.
if they charged canadian rates in tunsinia no1 will ever have a cell phone

[hyperion]

Good, this reinforces my belief all cellphone companies in this country are crooks. Knowing what I know now, I probably would not have bought a cellphone...but renewal time is coming up (finally).

[hyperion]

i think we get raped b/c we can...
we can afford to pay extra so they charge extra.
if they charged canadian rates in tunsinia no1 will ever have a cell phone

I don't understand your argument. Are you saying that Canadians get charged more because we're richer?? In that case, Americans should be charged more than Canadians, but they're not.

[Evil Baby]

It's pretty sad considering Canada is one of the cheapest places in the world for local calls. You'd think that would continue over into the cell phone industry but I guess not. I wonder if that 1/3rd more comes from all those extra fee's that bring a $25 plan to $42 in mere seconds.

I guess it also has something to do with what little competition we have.

[UrbanPoet]

I don't understand your argument. Are you saying that Canadians get charged more because we're richer?? In that case, Americans should be charged more than Canadians, but they're not.

oh yes.. and theres market differences too.
Stuff is cheaper in the states b/c theres more people and its more competitive.

[Gee]

The US has more carriers and more competition. In fact in some cases, it is cheaper to get a cell phone over a landline. Some of their packages offer free State to State calling for a flat fee. Free calls within the network etc. It is very competitive there.

Some of these offerings are starting to appear in Canada. But it is slowly being adopted. Rogers offers free calls within network and unlimited incoming. But it is still expensive.

[konfusion666]

what is the "true cost" of a modern GSM handset anyways?

because in India, i see every tom, dick, and harry running around with a GSM cell.
a manual laborer who probably makes a few bucks a day, might not be able to afford anything better than plain rice for his noon meal, but he's got a half-decent Samsung flip-phone...
and before you say "contract", no, that's not it, everyone over there seems to use prepaid cards.

[aquariaguy]

I don't understand your argument. Are you saying that Canadians get charged more because we're richer?? In that case, Americans should be charged more than Canadians, but they're not.

We have crazy ass plans in America. I mean its more expensive, but you get a better bang for the buck. The cheapest plan for Verizon is $39.99. I get 450 DAYtime minutes, unlimited nights/weekends, caller ID, voice mail, shitload of text messages for $5 (comes out to 2 cents a text), free verizon to verizon. Also theres absolutely NO roaming ANYWHERE in the US. Also I can send texts to anyone in Canada with no long distance fees. I wish Canada had someting like that, with no roaming across Canada. For example, I can drive from Philly to Buffalo and talk on my phone. No roaming when I change states. People send picture messages here just like a text in Canada. It's wonderful. However, its $40, plus $6 fee. Only 5% tax on certain things like the cell. On clothes, shoes, food, no tax

With my plan, as a student, I don't need a landline. And 450 minutes is sufficient enough, since more than 50% of my friends have Verizon.

[jm20]

Its simply because we have a larger land mass that is less dense than any other country basically. It costs the carriers more to provide better coverage for a population that is relatively small. It's the same deal with the lack of fibre optic cable being pushed for internet use in canada, while other countries have enjoyed FTTN for almost a decade now.

[cipher]

It's that damned "System Access Fee" that really ticks me off. It's just collusion that every cellular provider in Canada charges the same fee. Why isn't the feds going after them for this?!?!

[Dano76]

I understand all of the arguments (productivity, etc.), but I don't personally see anything wrong with the fact that every Tom, Dick, and Harriet doesn't have a cel. If I didn't need one for work, I wouldn't have one either! The article sounds a bit too much like someone trying to convince me we should have them ("they have it so we should too") rather than an argument about it's cost.

[UrbanPoet]

what is the "true cost" of a modern GSM handset anyways?

because in India, i see every tom, dick, and harry running around with a GSM cell.
a manual laborer who probably makes a few bucks a day, might not be able to afford anything better than plain rice for his noon meal, but he's got a half-decent Samsung flip-phone...
and before you say "contract", no, that's not it, everyone over there seems to use prepaid cards.

i know in many countries with a lack of telecommunication infrastructure use cell phones. It makes it easier.

[kitbor]

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

ROFL,

When was the last time, the wireless adoption was used to dignify nation's pride? The attitude of Seaboard Group was very repulsive. Excuse me, I'm going to throw up. What’s a sour loser! Give Canadian some credit, we aren’t going pay for your vacation in Bahamas. Want to sell more? Then offer the better price and services!

[mhayer10]

we canadians get ripped off in everything, always have to pay more