July 13, 2013
OpenMedia original article
How Canadians are using the Internet to debunk Big Telecom Spin
Big Telecom’s ads rely heavily on a recent report on cell phone prices from Wall Communications that was commissioned by the government and the CRTC. Other reports on cell phone prices differ, with the well-respected J.D. Power Report concluding that Canadian cell phone bills rose by 13% in the last year - that’s thirteen times the rate of inflation!
We all know how Big Telecom loves to cherry-pick information. Here’s what you need to know about the Wall Report:
- Telecoms expert Michael Geist responded to the report by pointing out that “Canada is described as being "on the high side" for virtually every key category, with only the U.S. faring consistently worse.”
- Why does the U.S. seemingly fare worse in the report? Expert Peter Nowak has the answer, explaining that “On the wireless side, the new Canadian entrants are included, yet down in the United States, only AT&T, Verizon and Sprint are counted.” - no wonder Canada seems to fare better, when cheaper U.S. providers were excluded from the comparison entirely. This is a bit like comparing the cost of a Ford or Toyota in Canada to the cost of a BMW or Mercedes in the U.S., and concluding that cars cost cheaper in Canada!
- There were similar issues with the comparisons to cell phone providers in the UK, with expensive providers like BT and Vodafone being included in the comparison, while much cheaper providers such as Tesco and GiffGaff were not.
- Nowak also points out that the Wall Report compares just six countries, three of which (Canada, Japan, and the U.S.) are among the most expensive in the world for wireless. Nowak explains that “When additional countries are included in comparison – the Wireless Matrix compares 50, including 19 developed nations – Canada’s standing isn’t so middle-of-the-pack.”
- Where there has been a price decrease, it’s because our more affordable, independent providers are finally making their presence felt. The report found that new independent providers such as Mobilicity, Public Mobile and Wind Mobile were between 14% and 39% less expensive than the Big Three depending on the level of service. (Wall Report, page ii). Data plans from independent providers are 39% cheaper than the Big Three. (Wall Report, page ii). These indie providers are are in a precarious position because while we have made some progress, the government has yet to undo regulatory protections for Big Telecom incumbents, and level the playing field.
As noted earlier, it's important to put the Wall report in the context of other reports, as it has a track record of rating Canada’s cell phone prices more favourably than others. We’ve already seen how J.D. Power’s report released in May found that Canadian cell phone bills jumped 13% in just the last year.
The gold standard report for comparing wireless carriers around the world is the BofA Merrill Lynch Global Wireless Matrix - this showed that Canadian carriers make more revenue off cell phone users than carriers in any other country in the world - 16% more than the U.S., 32% more than the industrialized world average, and 76% more than in Europe. That means that while the cost of providing communications services is dropping and some of those savings are being passed on to customers - Canadians are being price-gouged more than our global counterparts - as those who have done some travelling abroad will attest.
Big Telecom’s cherry-picking and spin is ridiculous - but it’s great to see how Canadian Internet users are fighting back:
- Jellicle on reddit says: “The stat you're looking for ARPU, which is how much revenue the telecom companies get per customer per month. For Canada it's something like $58/month, for the U.S. it's something like $50. Overall, Canada is extracting more money from wireless customers while providing less service.”
- BestMedic on reddit says: For reference the CWTA [who sponsored the ad] is basically a lobby group for Rogers/Bell/Telus. It's like asking Marlboro in the 1970s if their product gives cancer.”
- An OpenMedia.ca Facebook community member said: “So I was reading the free newspaper this morning... and what the heck is this that I found? And it's on both Metro and 24H newspapers. This is ridicolous! [sic]This public brainwashing at best.”
Big Telecom’s spin may be totally ineffective - but advertising campaigns like this don’t come cheap. Canadians will be asking why the Big Three don’t put that money instead towards addressing their systematic mistreatment of cell phone users.
Again and again, we see Big Telecom’s sense of entitlement revealed. Instead of addressing their high prices, mistreatment of customers, and outdated service model, they keep trying to pull the wool over the eyes of hard-pressed Canadians who pay some of the highest prices for some of the worst cell phone service in the world.
It’s time for change. We need clear action from the government to open up our communications networks to all Canadians and new service providers. This is the only way to move beyond Big Telecom’s old-fashioned high-cost model towards an open, 21st century model with lower prices and improved choice.
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