This wireless pricing study is a follow up to a study conducted by the SeaBoard Group 18 months ago.
Our 2007 study is a comparison of cell phone prices offered by service providers in different 10 cities across Canada, the U.S. and Europe.
Our conclusions? Heavy users in Canada pay, on average 1.5x more than a customer with similar usage, opting for equivalent plans, in the United States.
Other major findings are as follows:
* A heavy cell phone user (he or she who uses approx. 1,200 minutes a month & certain data services) in Canada pays roughly 56% more than the same user in the United States. Average users pay about 33% more than his American counterpart.
* If you are a light user of cell phone services, what we refer to as a ‘survival user’, you pay 27% less per month than the average American. The news for the light user isn’t all good – that same user would pay 42% less if he or she lived in Stockholm.
* If you are a heavy cell phone user and are searching the continent for the best deal, consider moving to Athens, Georgia – there you can sign up for an unlimited North American calling plan for approximately US$95/month – about half the cost of a Canadian plan which doesn’t include the benefit of unlimited long-distance calls.
Canadian wireless penetration rests at 58%, second last in the OECD. It's a full 20 percentage points behind the United States, the country's main trading partner.
SeaBoard believes relatively high cell phone prices in Canada suppress demand for wireless services.
We suggest that the government has the necessary tool at hand with which it could fashion a more competitive, more dynamic market – the forthcoming spectral auctions.
We propose some measures that might increase the market’s dynamism and thereby propel Canadian’s adoption of wireless services to the benefit of the providers and the nation.