July 20, 2013
How Telus is misrepresenting figures to justify price-gouging
And we can help out with that effort. Telus is crowing about the high levels of investment that Canadian service providers made into their networks in 2011, arguing that this is necessary because of Canada’s size and how spread out our population is. But we’ve debunked this argument pretty thoroughly in the past (see this article for details). Let’s take a moment to break down this new version of Telus spin.
We know that Canada’s service providers have been lagging behind in terms of investment in their networks; in fact Big Telecom’s own lobby group, the CWTA, notes that compared to Canada, the UK has four times the number of cell phone towers. Big Telecom has been able to get away with this lack of investment in the past, because Canada has such low cell phone usage rates compared to other developed countries. As the latest OECD report highlights, Canada is still dead-last in terms of number of cell phones per 100 people.
But even if we’re doing worse than other countries, that number is rising. And as more of us use our cell phones, that’s going to put pressure on the networks, and Big Telecom will have to invest more to improve them. So this high investment that Telus is trumpeting about makes complete sense- Big Telecom is playing catchup. Other countries already have these networks established to support their high numbers of cell phone users, but we don’t, so comparatively we have to invest more.
The thing is, Telus wants us to believe that they have a much tougher time because Canada is such a big country. But we know that while Canada is physically large, the majority of Canadians live in a handful of cities. We also know that the more people there are using a network, the more robust the network has to be, and that takes investment. So the biggest drain on a network will occur in the places where the most people live, i.e. densely populated cities. And as Big Telecom’s lobby group helpfully points out, the cheapest place to build is in a city.
So how is it that Big Telecom is apparently spending all this money improving its networks, and it takes the highest revenue per user compared to any other country in the industrialized world, and it offers fair prices? Scratch the surface of Big Telecom’s spin and it’s clear that something doesn’t add up. Maybe Telus should check its math.