Techvibes: Study shows Canada's cell phone market is overpriced and anti-competitive
Yet another report has recently come out to demonstrate just how closed our cell phone market truly is. We've improved in the last four years, but we're still seeing a situation where about 94% of the wireless market is dominated by only three large companies. Canada's industry minister has yet to make a bold move to fix this, and until that happens we need to keep the pressure on: http://StopTheSqueeze.ca/
Article by Louis Rheaume for Techvibes:
In a recent report called Long Term Evolutionary Challenge: Limiting Wireless Carrier Gluttony, Seabord Group argues that Canada must stimulate competition in the mobile services sector. Consumers complain about high prices and the lack of choice in the Canadian mobile market, composed mainly of an oligopoly between Bell, Rogers, and Telus.
Seabord reports that there is an antipathetic movement toward big mobile telcos since consumers have few phone device choices. Thus, it translates into a lower penetration of mobiles services in Canada versus OECD countries and also many emergent countries.
Mobile operators suggest that Canada is the second largest country in the world for higher mobile prices. However, just 15% of the country is covered by mobile services, according to the report. For instance, in the USA where mobile prices are lower and the area is around 90% the size of Canada, there are 27 times more wireless antennas than in Canada.
Seabord suggests that the implementation of mobile services in Canada cost around $196 per user from the beginning of operations until 2000 versus $292 per user in the US. In 2008, mobile operators Bell and Telus indicated that they would invest around $500 million in a new HSPA network. However, in New Zealand, a country 37 times smaller than Canada, a similar network cost $400 million. Thus, the arguments of higher operating costs due to geography are not accurate.
Operating costs on revenue was 69% in 2002 in Canada versus 52% in 2007 and remains low. In the US, it was 67% in 2002 versus 63% in 2004 and remains high. Read more »
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