Canada’s wireless prices justified even if high by world standards, think tank says

TORONTO — A new report challenges the belief that Canadians pay too much for their wireless communications services.

The Montreal Economic Institute says it’s too simplistic to say Canadians pay some of the highest wireless prices in the world.

The private-sector think tank says Canada’s relatively high prices are justified by the quality of the networks, the size of the country and the investments that carriers are making in fifth-generation wireless technology.

The study comes as the Canadian Radio-television and Telecommunications Commission is in the midst of requiring Rogers, Bell and Telus to add a basic, data-only wireless service to their product lineup.

Hundreds of consumers making submissions to the CRTC’s public consultations have generally rejected the pricing proposals submitted recently by Canada’s three main carriers as too expensive.

Study author Martin Masse says Canada’s telecom industry is now competitive enough that there’s no need for government and regulatory attempts to force down consumer prices.

Masse says the public tends not to realize that one of the CRTC’s widely cited annual price comparisons between Canada and other advanced economies doesn’t take into account quality of service.

He says the price comparison also doesn’t acknowledge that “nobody is forced to pay for the most expensive high-end services offered by the primary brands. Several more affordable options exist.”

For instance, Rogers operates Fido and Chatr; Bell operates Virgin Mobile and Lucky Mobile; and Telus operates Koodo and Public Mobile.

In short, the CRTC’s price comparison done by the Nordicity consulting group “ignores most factors that explain how these products and the markets where they are produced and sold are different,” Masse writes in the report.

“This amounts to comparing what two people have to pay to lease a car, without informing us that the first is a highly-paid executive leasing a Lexus that she uses every day, while the second is a low-income retiree leasing a Yaris that he uses once a week. The raw numbers simply do not tell us much.”

Companies in this story: (TSX:RCI.B, TSX:BCE and TSX:T)