The federal government has put Canada’s largest national cellphone networks on notice that they have two years to lower their prices for mid-range services by 25 per cent or face regulatory changes to steepen competition.
Minister of Innovation, Science and Industry Navdeep Bains announced March 5 that the 2019 price comparison study showed the average prices from regional providers were up to 45 per cent lower than plans provided by the three large national carriers: Bell Canada, Rogers Communications Canada and Telus Communications. Bains noted progress towards reducing prices, but said research showed the prices for mid-range plans have not moved.
The 2019 price comparison study found Canadians have paid more overall for telecom services than consumers in other G7 nations and Australia. That study compared the pricing of different bands of service across wireless, broadband and wireless internet. Canada had the highest or second-highest adjusted prices in all five levels of wireless service studied. The average monthly cost of a standalone roaming plan is about $50 per month in the United States and about $115 in Canada, and U.S. national providers commonly include Canada/U.S. roaming at no additional charge in their unlimited smartphone plans.
Bains’ release announced that the “next steps to lower prices for telecom services and promote competition” would be a requirement that if the three large carriers fail to lower prices by 25 per cent in two years on their plans that offer 2 GB to 6 GB of data, the government would “take action with other regulatory tools to further increase competition and help reduce prices.”
The government also announced rules for the 3500 MHz spectrum auction. These bands are key spectrum bands for 5G technologies, which enables higher speeds and greater data usage. This auction will reserve 50 MHz for small and regional telecom companies to create more competition by placing them on a more equal footing with the national carriers.
Bains noted that wireless services have become a necessity of Canadian life rather than a luxury, and said the federal government is acting on its pledge to make them more affordable.
“Canadians shouldn’t have to choose between having a cellphone or heating their home,” the minister said in a news release. “These new tools build on a number of initiatives we already set in place to help lower prices.”