PRICE SIGNALS

Wireless is pricier, but Canadians getting more bang for the buck, study says.

TORONTO • A new study has found that while the cost of using a cellphone in Canada has jumped as much as eight per cent this year, Canadians are getting a better bang for their buck for higher-volume packages.

According to an analysis of telecom pricing in a six major Canadian cities during a two-month period early this year, the average cost of unlimited nationwide talk-and-text packages that include two gigabytes of monthly data usage declined by 11 per cent compared to last year. Further, the variance in rates between upstarts and the pricier incumbents, which ranges from 25 to as much as 65 per cent, is generally at its widest in these higher-volume baskets.

“We see the technology offerings changing over time and you get more for your buck at virtually every price level,” said Gerry Wall, president of Wall Communications Inc., an Ot- tawa-based economics research and consulting firm that was commissioned by the country’s two industry watchdogs to complete the report. “The average consumption has grown over time and so a mid-level basket of cell service is better today because

You get more for your buck at virtually every price level

you’re getting more even though we’re putting it in the same category.”

The study, which assessed prices in Halifax, Montreal, Toronto, Winnipeg, Regina and Vancouver, found users in Manitoba and Saskatchewan enjoy the lowest mobile prices, especially for higher-volume usage. The spread between what the Big Three telcos and Vidéotron charge in Montreal is quite narrow, as Quebecor Inc. has employed an aggressive approach to sell subscribers a suite of services rather than just one.

“People say Quebec is a different market for a lot of reasons. But the strategy Vidéotron has used is to try to bundle,” said Wall. “On a stand-alone basis, just for the cell service, they’re not cutting their legs off.”

The study considered 500 separate Canadian standalone and bundled service packages, a number that continues to soar as telcos adjust their mobile offerings to address the explosion of consumer demand.

Despite the average year-over-over price increase, the cost for domestic wireless plans — ranging from talk only, talk-and-text, and talk-and-text and data — is still lower today than it was in 2008, the study concludes. But Canada’s cellphone prices continue to rank “on the high side” compared to other countries.

For the past several years, the federal government has tweaked rules governing the sector and introduced incentives for a crop of new players to try to inject more competition and choice into the Canadian market. Still, Rogers Communications Inc., BCE Inc. and Telus Corp. serve about 90 per cent of mobile subscribers.

The report also found that the price of broadband Internet services fell between an average of one and seven per cent, which Wall referred to as “probably the best story for Canadian consumers.”