Price Comparisons of Wireline, Wireless and Internet Services in Canada and with Foreign Jurisdictions - 2018 Edition

4.0 Mobile Wireless Service

4.1 Mobile Wireless Service Baskets

As in previous studies, the following mobile wireless service element charges, where applicable, are considered for price comparison purposes:

1. network access/airtime charges (taking into account defined amounts of daytime, evening and weekend minute volumes);
2. optional feature charges (e.g., voice mail, call display and others);
3. long distance charges for both domestic and international calls;
4. short message service (SMS) or text message charges;
5. data service charges; and
6. any other applicable monthly service charges such as emergency, universal service and/or other regulatory fees.

There are several notable charges or costs that are excluded from the calculation of mobile service prices in this study, which include:  one-time charges (such as activation fees), upfront handset or device costs and roaming charges.  However, a separate comparative analysis of Canadian and U.S. roaming charges is provided in Section 4.4 below.

Six mobile wireless service baskets are included in the study.  Each basket consists of the following main elements:

• Level 1: 150 incoming & outgoing minutes per month, with 10% of outgoing minutes treated as long distance.
• Level 2: 450 incoming & outgoing minutes per month, with 10% of outgoing minutes treated as long distance, two optional features (voice mail and call display), and 300 texts per month.^{Footnote 19}
• Level 3: 1,200 incoming & outgoing minutes per month, with 15% of outgoing minutes treated as long distance, more than two optional features, 300 texts and 1 GB data usage per month.
• Level 4: Unlimited nationwide talk and text (no international calling included), more than two optional features, and 2 GB data usage per month.
• Level 5: Unlimited nationwide talk and text (no international calling included), more than two optional features, and 5 GB targeted data usage per month. 
• Level 6: Family Basket - Unlimited nationwide talk and text (no international calling included), more than two optional features, 10 to 49 GB data usage per month and three lines.

Table A1.2 in Attachment 1 provides a more detailed summary of each of the service elements and usage assumptions included in all six mobile wireless service baskets.

Prices are measured for each of the mobile wireless service baskets based on a TSP’s standard mobile service plan rates.  Where applicable, both “pre-paid” and “post-paid” service options are considered.  The less expensive of the two options is used to determine the service basket price.

Post-paid plans can be offered on a no-contract or term-contract basis (the most common term being 24 months in the latter case).^{Footnote 20} Term-contract service plans typically provide a means for subscribers to purchase a new handset or device at a discounted price.  Such plans generally include an implicit or explicit handset cost recovery component in the service plan price.  No-contract term, bring-your-own-device or SIM card only, service plans are also often available at lower price points given they do not include a handset cost recovery component.  Consistent with previous years' studies, as applicable, the post-paid service plan prices collected for this study are based on term-contract service plans.^{Footnote 21}

4.2 Canadian Mobile Wireless Prices

Figure 2 provides a summary of 2018 Canadian prices for all six mobile wireless service baskets.  Weighted average prices range from $25.73 per month for a Level 1 limited talk-only plan to $227.87 per month for a Level 6 Canada-wide unlimited talk and text family plan with up to 50 GB of data.

Figure 4 provides a summary of Canadian weighted average mobile wireless prices for each service basket Levels 1 through 6 for the five-year period 2014 to 2018. More detailed historical mobile wireless price information by service basket and city is provided in Table A2.2 in Attachment 2.

• The Level 1 mobile wireless service basket price decreased from $30.53 in 2017 to $25.73 in 2018, a decrease of 16%.  Average 2018 Level 1 prices varied by city, from a low of between $24.98 in Toronto to a high of $30.24 in Winnipeg.  While Level 1 prices increased between 2013 and 2016, they have fallen the last two years to their lowest level since the Telecom Price Comparisons were initiated in 2008. 
• The Level 2 price decreased from $40.95 in 2017 to $39.43 in 2018.  Average 2018 Level 2 mobile wireless prices varied from $36.71 in Regina to $42.39 in Halifax.  Level 2 prices remain at their lowest levels over the period from 2008 to 2018. 
• The Level 3 service basket price was essentially unchanged, increasing nominally from $70.70 in 2017 to $70.99 in 2018.  Average 2018 Level 3 mobile wireless prices varied widely by city, from a low of $45.91 in Montreal to $83.67 in Vancouver.  Again, despite the slight price increase this year, Level 3 prices in 2018 are historically low, just slightly higher than in 2017 and considerably lower than the 2008 average price of $112. 
• The Level 4 service basket price decreased from $81.61 in 2017 to $75.44 in 2018, a drop of 8%.  Average 2018 Level 4 mobile wireless prices also varied widely by city, from a low of $52.77 in Winnipeg to $86.48 in Halifax.  Level 4 basket prices have been declining on average over the last four years. 
• Level 5 service basket prices dropped from the 2017 level of $104.49 to $87.32 in 2018, a decrease of about 16%.  The 2018 average price of $87.32 is the lowest tracked price since this basket was first introduced in 2015. 
•  Level 6 “Family Basket” service basket prices also dropped significantly from the 2017 level of $264.65 to $227.87 in 2018, a decrease of 14%.   While Level 6 prices have only been tracked for three years, the 2018 prices are lower than the initial year (2016) average price of $231.99.  The lowest city price was found in Winnipeg at $123.60 while the highest price was in Halifax at $280.81. 

The lowest average mobile wireless prices were generally found in Winnipeg, Regina and Montreal for most mobile wireless service baskets – consistent with the past several years.

Since 2008, when the first Telecom Pricing Study was undertaken, mobile wireless prices in Canada have generally trended downwards with CAGRs over the relevant period between roughly 2% and 7% (with the exception of Level 6 at just under 1% annual decrease).

Comparison of Incumbent and Regional Providers Prices 

A comparison of average mobile wireless rates for the incumbent carriers and the regional carriers is provided in Table 3 below.  The comparison is provided for six cities:  Vancouver and Toronto (where Freedom operates), Montreal (where Videotron operates), Winnipeg (MTS), Regina (SaskTel) and Halifax (where Eastlink operates).^{Footnote 22} For each of the cities, the incumbent carriers include Rogers, Bell and TELUS.

Unweighted averages used for incumbents and regionals. Unweighted prices can vary significantly from the weighted prices used in calculating national averages but are suitable for comparing incumbents and regionals.

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As shown in the table, for the Level 1 mobile wireless service basket, the prices offered by regional carriers are 6% lower on average for the six cities combined.  This is the lowest price differential of all categories levels.  The relative price discounts (on average) available from the regionals in the case of the Level 2 service basket through Level 6 (for all cites combined) are 27%, 15%, 33%, 25% and 15% respectively.  

Compared to last year's study, the differentials between the incumbents' and Regionals’ mobile wireless prices have generally been stable or moved upwards.

Incumbent Flanker Brand Prices

Incumbent flanker brand services Bell Virgin, Rogers Fido, and TELUS Koodo are available across the country. 

Table 4 below provides a summary of incumbent primary brand, incumbent flanker brand and regional mobile wireless service prices for 2018 in Halifax, Montreal, Toronto, Winnipeg, Regina and Vancouver for each of the mobile wireless service baskets.  It also provides percentage rate differentials between the incumbents' primary and flanker brands as well as the incumbents' flanker brands and the regionals.  Except for Levels 1 and 6, Flanker prices are consistently lower than incumbent prices. The most dramatic differences are found in Levels 4 and 5, where flanker prices are 23% and 21% lower (respectively) than incumbent prices.

Compared to last year's study, the differentials between the incumbents' flanker and primary brand service prices have no discernable trend – some are higher and some are lower.  Flankers still tend to be lower than incumbent prices (except for Levels 1 and 6), both on a national average basis and in most individual city/basket prices as well.

Unweighted averages used for incumbents and regionals. 

Incumbent flanker brands are given equal weights.

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Table 4 also includes the regionals’ average prices for the same cities and provides percentage-based price differentials between the regionals’ and incumbents' flanker brand prices.  The regionals’ prices are consistently lower than the incumbents' flanker brand prices nationally, but can be higher in specific regions and baskets.  In particular, incumbent prices tend to be lower than regional prices in Saskatchewan and Manitoba.

As was seen last year, the price differentials between regionals and incumbent flanker brand prices have generally widened, whereas the differentials between regional and incumbent primary brand prices have largely remained unchanged.  In other words, average prices offered by incumbent flanker brands rose and are now closer to those of the incumbents' primary brands, while the regionals’ price discounts relative to the incumbents' primary brands generally remained the same.

Reseller or MVNO Prices

Mobile wireless service prices offered by two resellers or mobile virtual network operators (MNVO) – i.e., Primus and PC Mobile – were also collected.  Table 5 provides a summary of the national-level price differentials between the incumbents' primary brands and MVNOs for each of the mobile service baskets.  Note that no reseller services were available for Level 6 baskets.

  Unweighted averages.

  Resellers/MVNOs include Primus and PC Mobile.

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Reseller services tend to be lower than incumbents’ prices in Nova Scotia, Ontario and BC and higher in Quebec, Saskatchewan and Manitoba.   On a national average basis, Reseller average prices are lower for Level 1, Level 3 and Level 4.  The differences in incumbent and reseller national average prices tend to e relatively small (with the exception of Level 2 where resellers are 16% higher).  However, price differentials in any given city/basket can exhibit extreme price differences – as much as a 50% or more difference in some cases (e.g. Manitoba Level 4 and Saskatchewan Level 5).

Discussion of the Canadian Market: Observations Relevant to High and Low Cost Service Provision

Table 6 below provides the highest and lowest available prices (by region) by specific provider.  We would note that Freedom Mobile in most cases offers the lowest price in regions where they offer service (i.e. BC and Ontario).

For Canada, the highest and lowest prices (offered by specific providers) are provided in Table 7 below.  We would note that Freedom Mobile has the lowest (or equal to lowest) price offering in three of the six baskets.

We would note that an individual vendor price that is considerably lower than the national average can be found in all baskets – as is also the case in each region.

4.3 International Mobile Wireless Service Prices

As noted in previous studies, there are a number of important pricing differences that should be borne in mind when comparing Canadian and foreign mobile wireless prices.

• Price Structure:  The pricing of mobile wireless service plans in the U.K., Germany, Italy, France, Australia and Japan differs significantly compared to Canada (as well as the U.S.).  Mobile wireless prices in Europe, Australia and Japan are set on a "calling party pays" basis, under which mobile customers pay only for outgoing calls.  In contrast, Canadian and U.S. pricing plans are based on a "receiving party pays" approach, under which customers pay for incoming and outgoing calls.  Unlike Canada and the U.S., some mobile wireless service plans in Europe, Australia and Japan also include per call setup charges and/or different per minute call rates to landline versus mobile customers, as well as potentially different per minute rates for on-net versus off-net mobile calls.  However, as in Canada, unlimited national calling plans and service add-ons that cover calls to both fixed and mobile and both on and off-net mobile lines are now commonly available.
• Regulatory Fees: Regulatory fees of one form or another apply in the cases of Canada, Japan and the U.S. In Canada, there is typically an explicit emergency 9-1-1 fee and, in some cases, universal service fees (as in the case of Japan).  In the U.S., there are a variety of regulatory fees, federal and state USF surcharges and other fees.^{Footnote 23} We have estimated these charges based on information collected in previous pricing studies and, where applicable, updated USF fees and carrier-specific regulatory cost recovery charges.

Figure 4 provides a comparison of current mobile wireless prices for Canada and the surveyed foreign jurisdictions for each of the seven wireless service baskets.  All prices are expressed in PPP-adjusted Canadian dollars and exclude retail sales taxes.  Table A3.2 and Figures A3.2 a, b and c in Attachment 3 provide more detailed historical international mobile wireless price information for the period 2014 to 2018, as applicable, for each country and basket.

• In the case of the Level 1 mobile wireless service basket, the Canadian average price of $25.73 is the second highest in the group of surveyed countries, surpassed only by the U.S.  The Canadian Level 1 basket price is also well above the average price for the group of surveyed foreign jurisdictions of $15.  The substantially lower prices found in Europe are generally due to the availability of exceptionally low-priced prepaid voice services.
• For the Level 2 service basket, the Canadian average price of $39.43 falls well above the average price for the group of surveyed foreign jurisdictions as a whole of $22.  Canada is only lower than the US price.
• For the Level 3 wireless service basket, the average Canadian monthly rate of $70.99 is well above the average for the group of surveyed foreign jurisdictions of roughly $36.  Canada ranks highest among the surveyed countries.
• In the case of the Level 4 basket, which includes unlimited nationwide talk and text along with 2 GB of monthly data usage, the Canadian average price of $74.22 is similarly positioned.  It is considerably above the Level 4 basket average price for the surveyed foreign jurisdictions of just over $40. Canada ranks seventh among the group of countries, below only the measured average price for Japan. 
• For the Level 5 basket, which includes unlimited nationwide talk and text along with 5 GB (target) of monthly data usage, the Canadian average price of $87.32 is well above the Level 5 basket average price for the surveyed foreign jurisdictions of roughly $55.  Both Japan and the US have higher average PPP adjusted prices.
• The Level 6 (Family) Basket price in Canada is $223.32, higher than all other countries.   However, the US (at $206.57) and Japan (at $222.66) are not far off the Canadian price.  Prices in Europe and Australia are significantly less.

The Level 1 to 3 mobile wireless service baskets have been included in this study since the outset in 2008.  Canada's relative mobile wireless service price ranking for these three baskets has not changed significantly between 2008 and 2014.  Canada has tended to be on the high side of the group, but generally below the U.S. and, since its introduction to the study in 2010, Japan for Level 3 (and in part Level 2).  The Level 4 basket was introduced to the study in 2014 and the Level 5 basket was included in 2015.  Canada's Level 4 and 5 rankings are similar to the Level 1 to 3 baskets – i.e. it falls on the high side of the group. 

Level 6 (Family Basket) was introduced in 2016 and once again Canada is on the high side of the price range. 

It is worth noting that surveyed average prices for European countries included in the study have consistently fallen below the prices in Canada for all defined mobile wireless service baskets – generally considerably lower than in Canada.

In sum, average Canadian mobile wireless prices are consistently at the upper-end of the group of surveyed countries.

4.4 Canada-U.S. Roaming Prices

As a separate price comparison exercise, rate information on voice, text and data roaming services available to Canadian and American mobile wireless service consumers when traveling to the U.S. and Canada, respectively, has been collected as part of this study.

The wireless service providers surveyed for this study generally offer two types of international roaming services.  The first is a "pay-as-you-go" roaming service option under which users pay per-use rates for any voice, text or data usage they incur while traveling abroad.  The second is a travel or roaming add-on package option under which users can choose to pay a fixed fee for defined amounts of call minutes, texts, and/or data.  Typically, roaming add-on packages remain in effect for a 30 day period of time.  With an add-on package, per unit usage rates are typically discounted significantly relative to base pay-as-you-go rates.  When the usage allowance under an add-on plan is consumed, then either specific overage rates or base rates apply for any additional usage, or the service charge is capped (equal to a specified number of days).  

Roaming from Canadian Providers

Canadian incumbent and, to a somewhat lesser degree, incumbent flanker brand wireless service providers offer a wide range of stand-alone U.S.-specific voice, text or data roaming add-on packages as well as bundled talk & text and talk, text & data roaming add-on packages.  The Regionals now offer daily/periodic plans that directly compete with the incumbents, as well as Pay as You Go options. 

The three Canadian national mobile wireless carriers generally have similar roaming plans, charging $7 per day for US/Canada roaming.  Rogers and TELUS allow you to use the amount of voice minutes and texts that are included in your domestic Smartphone plan, while Bell allows unlimited minutes and texts.  All three also allow the use of the data allotment in your domestic plan.  All three national providers cap the monthly roaming expenditure in their plans ($100, $105 and $140 respectively for TELUS, Rogers and Bell).  TELUS also offers a Monthly Roaming Pass that is $30 for 30 days, but limits voice minutes to 300.

The Regionals also offer daily plans ranging from $5 to $6 per day.  The Freedom roaming plans are based on terms of 5, 10 or 20 days while Eastlink has no term.  Videotron caps its monthly maximum roaming plan charge at $60, considerably lower than any of the national carrier plans.

The Flanker (Fido, Koodo and Virgin) plans are virtually the same as those provided by their associated primary brand national carrier plans, with the exception of the Koodo rate of $8 per day ($1 higher than the TELUS plan).  Public Mobile also offers unlimited talk and text at $10 for 10 days, the lowest talk and text roaming plan option available in Canada.

Primus offers an unlimited Talk (no text) plan of $30 for 30 days.

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The national mobile wireless providers, two Regionals and two Flankers also offer Pay as You Go roaming.  Prices are once again very similar across the nationals, ranging from $1.45 to $1.50.   Rogers and Bell both charge $0.75 per text while TELUS charges $0.60 per text.  Bell and TELUS charge $6.00 and $5.00 per MB of data respectively while Rogers has a package of 50 MB for $7.99.

Freedom and Videotron have much lower per minute rates than the nationals, at $0.15 and $0.30 respectively.  Similarly text and data charges are also much lower at $0.05 per text or MB for Freedom and $0.15 per text or MB for Videotron.

The Flanker (Virgin and Fido) rates match those of their owners’ primary brand service.

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Roaming From US Providers

In the US, the national carriers all offer no charge roaming to Canada in their unlimited Smartphone plans.  These unlimited data Smartphone plans are priced at US$70 to US$75 per month.  They provide a full Smartphone telephone, text and unlimited data service with US/Canada roaming included in the regular monthly price.

For customers that are not on an unlimited plan from one of the four US national carriers, daily (or periodic) roaming plans are available from three of the carriers.  Verizon offers an unlimited calling plan for $5.00 per month, AT&T offers a $10 a day plan^{Footnote 24} and Sprint offers a $2.00 per day plan. 

Two regional carriers offer roaming plans.  US Cellular offers a $5.00 a month unlimited Talk plan as well as a $10.00 per month unlimited talk and text plan.  C-Spire offers a $5.00 month unlimited talk and text plan that is limited to 10 telephone numbers.

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Pay as You Go roaming (post paid) is only available form two US carriers: Verizon and AT&T. Both providers charge the same rate of $1 per minute, with data at $2.05 MB and texts at $0.50 each.

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Canada/US Roaming Comparison 

A striking feature differentiating Canadian and US services is the “no charge” roaming provided by the national US providers in their unlimited Smartphone plans.  These plans provide a full mobile phone service (voice, texts and unlimited data) plus (generally) unlimited roaming to Canada.  There is no counterpart service in Canada. 

The periodic roaming plans (including voice, texts and data) offered by Canadian national carriers, if used to their maximum allowances, have an average price of $115 per month.  US carriers offer an average PPP-adjusted price of $50.50 per month.  

If only a calling (voice) roaming service is required, US plans can be found for unlimited calling at US$5.00 per month (e.g. Verizon, U. S. Cellular).  In Canada, Primus offers a voice only service for $30 per month while Public Mobile offers a similar service for about $30 per month.

Wall Communications Inc. 2018

“Pay as You Go” rates are fairly comparable between the two countries, although data charges are 25% lower in the US.   

Wall Communications Inc. 2018