I have written previously about the House Committee on Industry's ongoing study into the Accessibility and Affordability of Wireless and Broadband Services. The last meeting occurred on March 18, 2024 with the appearances of the three CEOs of the largest providers in Canada, Bell, Rogers and TELUS.
The CEOs each gave a number of undertakings to provide further information to the Committee and the first of those answers appeared on the Committee web site yesterday from TELUS. I thought it would be worthwhile to take a closer look at those responses for my readers and hopefully the Committee members. You can find the TELUS document here:
The TELUS document is an excellent primer for those who are interested but do not follow this as closely as I do. TELUS begins by pointing out that wireless prices are declining rapidly, against a backdrop of historic and persistent inflation. It states that wireless prices declined 26.5% from February 2023 to February 2024, while economy-wide inflation rose by 2.8% and points to Statistics Canada for the data proving it. (https://www150.statcan.gc.ca/n1/daily-quotidien/240319/dq240319a-eng.htm
Importantly, TELUS notes that if the wireless declines were excluded from the broader CPI calculation, Canada’s rate of inflation would have been 3.3% (an increase of 19.1%). TELUS then broadens the view to a five year study period and finds that wireless prices declined 50.4% and again points to Statistics Canada as the source. This is against a backdrop of historic economy-wide inflation of 18.1% during the period. https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1810000401
TELUS points out that despite what Committee members and others seem to believe, Canada has among the lowest prices across advanced economies when taking into account network quality and cost factors. TELUS cites ISED data that demonstrates that across eight pricing baskets, wireless prices in Canada are lower than in the United States and Japan. https://ised-isde.canada.ca/site/strategic-policy-sector/en/telecommunications-policy/price-comparisons-wireline-wireless-and-internet-services-canada-and-foreign-jurisdictions-2022#s3.2
Accounting for network quality and cost factors, when compared to the G7 countries and Australia, Canada offers a superior mobile wireless value proposition, with prices that are almost 5% lower than the average price that foreign carriers would charge for the same plan and quality of service. https://api.ctia.org/wp-content/uploads/2020/03/Final-Study.pdf
TELUS notes that Canadian households spend less of their income on wireless services than their American counterparts, with Canadians allocating 1.4% compared to 1.5% in the US. This trend holds across all income levels and is particularly pronounced in the four lowest income quintiles, underscoring Canada's more affordable wireless services. http://media-cmi.com/downloads/Cell_phones_and_smartphones_become_ubiquitous_032724.pdf
TELUS points to Statistics Canada which shows high-speed Internet prices declined 13.2% from February 2023 to February 2024. https://www150.statcan.gc.ca/n1/daily-quotidien/240319/dq240319a-eng.htm
High-speed Internet prices declined 21.5% over the last five years. This is against a backdrop of historic economy-wide inflation of 18.1% during the period. https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1810000401
TELUS notes that high-speed internet prices are lower in Canada than in most advanced economies. Canada ranks as the third most affordable country for high-speed Internet services when compared to eight countries (United States, United Kingdom, Germany, France, Italy, Australia, New Zealand). https://www.nera.com/content/dam/nera/publications/2023/Dippon_Helleloid_Broadband_Prices_Canada_07_20_2023.pdf
In terms of usage, across wireless and high-speed Internet, Canadians have the second highest data consumption per capita among G7 countries and Australia. https://www.pwc.com/ca/en/industries/telecommunications/understanding-affordability-of-wireless-services-en.pdfhttps://www.pwc.com/ca/en/industries/telecommunications/understanding-affordability-of-wireless-services-en.pdf
Along with the UK, Canada was the only country where consumers use more than 400 GB of data per month on average, with Canadians using 447 GB per month across both wireless and high-speed Internet. https://canadatelecoms.ca/industry_data/high-speed-internet-downloaded-uploaded-monthly-on-average-per-sub/. Moreover, Canadians consume more than twice as much data and almost twice as much data as France and Germany, respectively. https://www.pwc.com/ca/en/industries/telecommunications/understanding-affordability-of-wireless-services-en.pdf
TELUS notes that the industry is drastically cutting prices while absorbing historically high costs and diseconomies of scale and scope. TELUS states that prior to the historic inflation of 2022, cost factors of production (including capital, labour, materials, and spectrum) were 103% higher than in the other G7 countries and Australia. https://www.caenergy.com/wp-content/uploads/2022/12/Christensen_Associates_Cost_factors_2022_Update.pdf
Despite higher costs, Canada has the 3rd highest level of capital investment per capita in the OECD, with operators in Canada investing 84% more than average among OECD countries across wireless and wireline technologies. https://stats.oecd.org/viewhtml.aspx?datasetcode=TEL&lang=en#
TELUS reinforced that impressive result by contrasting that in the UK and EU, excessive price regulation has led to substantial investment gaps of £25B and €200B, detrimentally impacting the economy and consumer services. Government interventions are underway to address these deficiencies, offering a cautionary tale for Canada's regulatory approach. https://www.mobileuk.org/news/budget-2024-improving-mobile-connectivity---the-importance-of-a-positive-investment-environment and https://digital-strategy.ec.europa.eu/en/library/investment-and-funding-needs-digital-decade-connectivity-targets
The TELUS document included two infographics that I found quite instructive. I include them here.
