Over the years, it has become an article of faith among Canadians that this country had some of the most expensive wireless voice and data rates in the world.
This belief was confirmed by two reports in the last two years: a 2009 OECD report which ranked Canada as the third-most expensive OECD country with respect to medium mobile phone usage; and a Fall 2010 report from The New America Foundation, a Washington based public policy institute, which concluded that Canada had some of the most expensive voice and data rates among eleven major countries.
Wading into the debate is a new report by Nordicity which concludes that Canada's wireless rates are very competitive when measured against OECD countries. The report, which looked at rates in twenty-seven countries, concludes that Canada’s average per-minute wireless costs are the 11th-lowest in the OECD, two cents below the OECD average. Not the lowest but certainly not the highest. In addition, the report says that based on average income, Canadian wireless voice costs are 10% lower than the OECD average and total wireless (voice and data) costs are 12% lower than the OECD average.
The 25 page Nordicity report refutes the OECD findings saying they are flawed for four reasons:
- Are based on wireless plans serving a small minority of subscribers per country, and
- the choice of plan types is inconsistent;
- Only somewhat account for vastly different mobile usage patterns per country;
- Do not reflect the fact that nearly half of all residents of OECD countries outside of North America pay for two cell phone plans; and
- Do not fully compare wireless costs in relation to average income
Nordicity says that its 2011 report addresses the omissions of the OECD wireless price rankings in its analysis of twenty-seven OECD countries for which there is significant available public wireless data.
Digital Home took a look at the report and on the surface, the report appears to be thorough, however, there are two factors that makes this writer sceptical of its findings.
- First the Nordicity report has been paid for by Telus so any reader will immediately question whether the report’s conclusions were baked in before the analysis was undertaken.
- Secondly, and more importantly, the report authors converted all rates to Canadian dollars on a purchasing power parity (PPP) basis when making price comparisons. The problem with this is that earlier this year the Canadian dollar was at or near all-time highs in comparison to the U.S. dollar and the Euro. Had the conversion rate been the one in effect in 2008 and 2009 then even Nordicity would likely have had no choice but to conclude that Canadian wireless rates were much higher than other OECD countries.
Simply speaking, the report’s findings may be skewed because of an unsustainably strong Canadian dollar.
Read the report (.pdf file) and come to your own conclusions then discuss in Digital Home's Canadian Wireless forum .