Canadians paid over $1.22B for extra wireless usage in 2017
Nothing irritates wireless customers quite like data overage fees, yet Canadians still spent more than $1.22 billion in extra charges for surpassing their data limits last year.
Data overage fees accounted for five per cent of the nearly $24.5 billion in total mobile retail revenue carriers earned in 2017, according to data published last week by the federal telecom regulator.
That’s a drop from about $1.39 billion the year prior, when six per cent of the $23.2-billion mobile retail revenue stemmed from data overage fees, according to the Canadian Radio-television and Telecommunications Commission.
The regulator also reported a drop in spending on internet overage fees, which fell to $94 million, or one per cent of internet revenue, from roughly $100 million in 2017.
The decrease in extra wireless usage charges followed the widespread introduction of data management tools such as text messages that warn customers when they’re about to blow past their limits. It also comes amid competitive pressures on service providers to increase the amount of data offered in plans.
“Data allowances offered are growing fast, affecting revenue coming from data overages,” Desjardins analyst Maher Yaghi noted last week in a 2019 outlook report.
Desjardins estimated that data overage revenue fell after Shaw Communications Inc.’s Freedom Mobile started offering higher-end plans last holiday season. Its plans with 10 gigabyte for $60 prompted the Big Three players to match the unprecedented offer.
“Moreover, we believe offering additional data management tools such as shared data plans and data consumption notifications contributed to lowering the total amount of data overage fees,” Yaghi wrote.
There’s no doubt consumers continued to demand more data. Wireless providers reported $11.83 billion in data revenue in 2017, up 7.8 per cent from $10.98 billion in 2016, according to the CRTC.
In just five years, revenue from wireless data has jumped by nearly 57 per cent to account for nearly half (48 per cent) of total mobile revenue. Over the same period, basic voice revenue remained relatively stable and long distance revenue plummeted nearly 60 per cent.